The LandaJob Blog:
Expert Perspectives and Industry Trends

The Growing Impact of Freelancers and Temp Workers

Decades ago, our workplace model looked like this: you went to college, accepted a job at a company, worked there for the next forty or fifty years, then retired. That has obviously changed.

People are changing jobs more frequently; sometimes out of necessity, sometimes out of desire for variety, flexibility, or growth. And the role of freelancers or independent contractors, as well as temporary employees, is increasing. Some sources say that by 2020, our work force may be fifty-percent freelance and temp.

A couple of definitions: Freelancers or independent contractors, manage their own time, work independently for their clients, and are paid directly by their clients. Temp workers are employed by a staffing firm which manages their assignments, manages their time, and pays them.

There are good things about this trend and there are bad things about this trend.

First the positive. Some workers love the flexibility. They can pick and choose what they want to do. They can do a wide variety of things as opposed to working in a fixed job description. They manage their own time commitment; they decide just how much and where they want to work.

Companies benefit from both freelancers and temporary employees. They can increase or decrease staff quickly and easily depending on internal work load. They can maintain relationships for just-in-time, on-call solutions. The company isn’t responsible for taxes or benefits, so it saves money and increases efficiency.

Now the negative. Freelance workers have to expend extra energy and worry to generate a consistent income stream. Freelancers and independent contractors have no worker protection – unless they’re working through a temp agency, in which case they have worker’s comp and sometimes some ancillary benefits for especially long assignments. And historically, some large companies have taken advantage of long-term temps by not transitioning them to full-time employment (and the IRS doesn’t approve of that).

In the big picture, the economic impact of temporary and freelance work is undeniable. The sources we checked varied, but right now it looks like freelancers contribute more than $700 billion of work to our $14 trillion economy. Not bad.

Some believe that our workforce is split now three ways: permanent staff, temp workers and freelancers. Most believe that temp and freelance will continue to grow exponentially.

At some point, with this mega trend towards freelancers, there will be a growing need to figure out how to provide some protection for workers. For example, the ACA is a perfect solution for freelancers who have no healthcare benefits. Whether that remains a solution for these workers is up in the air now, but let’s hope it continues to exist in some form.

Both employers and workers who need flexibility will continue to grow the use of temp and freelance solutions. Supply and demand will influence costs and rates, and smart companies will pay well to attract and retain the best talent!

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