Traditional office work and 9-5 jobs are becoming less popular every year. Businesses are beginning to adapt, but the workforce is driving the movement.

of The covid-19 pandemic accelerated distaste for travel and offices – citing wasted time, fuel costs and office hassles. Who wants to wear a sweater all day because the air conditioner won't stop blowing? Small annoyances like this add up, affecting well-being, job satisfaction and productivity.

Those burdens compel workers infer that their home is a much better work environment than an office.

However, not all employers are happy with this change. Right now, many companies are avoiding a back-to-office (RTO) mandate, noting how RTO mandates increase employee attrition and hinder recruitment.

The big question they're asking is: why pay expensive salaries and benefits if employees aren't in the office?

Some companies are choosing not to do this.

The trend of layoffs continues

As the demand for remote work increases, another trend has emerged: layoffs.

But this labor market is interesting because many of these layoffs are not caused by a lack of work for workers, but by replacing those workers with tools or contractors.

For example, a growing marketing agency I consult with laid off 3 of its 20 employees in the last nine weeks. These roles included a copywriter, content writer and PPC specialist.

All three of these employees were replaced by AI tools.

The CEO and COO decided to replace these employees because of the high cost – $300,000 per year versus $10,000 for tools. But tools are not the only thing that replaces workers. The overall wage structure of workers is also changing.

Companies more often choose independent contractors. They also outsource work to small agencies instead of hiring full-time employees, cutting costs while maintaining the human touch.

This is another method to reduce overall costs. Many skilled workers have embraced this trend and are preparing for the future of work. Survey data supports this claim.

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McKinsey Survey of Freelancers

According to one survey completed by consulting firm McKinsey, freelance work is booming.

58 million Americans now identify as independent workers. Historically, freelancers were mostly seen as “nuisance” jobs, such as teaching, driving a taxi or delivering food. Now, it's becoming more common for knowledge-based positions to become freelancers as well.

I've seen agencies and firms hire data analysts, graphic designers, software developers, and other contract or retainer roles. This template replaces a W-2 employee claiming fringe benefits.

Because if a company can't force employees into an office, they might as well cut some of those costs. In America, health insurance, matching 401k and other standard benefits are expensive. Typical markup costs range from 35% to 60% above base salary.

A salary of $100,000 a year becomes a $150,000 expense for any firm that offers good benefits. This significant cost makes full-time employees less attractive compared to modern alternatives. Workers adapting to the market or struggling to find work are creating a different kind of career path. Many are turning to small-scale entrepreneurship.

If companies won't hire you full-time, that doesn't mean your skills aren't valuable. It means that you have to position yourself a little differently to secure your income.

Here's how businesses and workers are positioning and adapting to this future of work.

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How to prepare for the independent worker economy

Businesses and workers must prepare – differently – for the future of work. This future of work is leaner companies relying on outsourcing more than ever before.

How businesses should prepare

As a business owner, you need to adapt to the modern recruitment challenges. The trend of workers who dislike commuting, offices and low wages is not going to fade away. This requires diversifying the way you employ staff and complete client work.

Here are four tips to optimize hiring freelancers.

1. Create a template for contracts and NDAs. This will simplify onboarding and protect your company in terms of legality.
2. Create accounts and familiarize yourself with popular freelance marketplaces, including UpWork and Fiverr. This will help you find talent faster.
3. Build a list of experts for the type of work you need. A great way to do this is to network on professional platforms like LinkedIn. Currently, I exclusively hire people I have met locally or through social media.
4. Review and improve Standard Operating Procedures (SOP). More outsourced work means more training needed. With proper SOPs in place, this becomes faster and more asynchronous.

How workers should be prepared

As a knowledge worker, you need to adapt to this tough job market. The number one way to do this is to make yourself readily available for projects without asking for a full-time offer.

Companies will continue to choose cheaper methods over full-time employees, especially as AI tools improve – and they improve quickly.

Here are four tips to help you adjust to a freelance work economy.

• Optimize your online presence, including your personal website and social media profiles. This makes it easier to find your specific skill set when a company needs it.
• Create a portfolio of your work. Traditional resumes won't do the trick anymore. Make it easy for someone who comes across your name to check out your best projects.
• Create content around your skill set. Post on social media once or twice a week about what you're learning or a project you've completed. This will help you attract opportunities.
• Set your price ahead of time. This will help you negotiate wage rates for contracts. If you're not sure where to start, a simple formula you can use is Desired Hourly Rate + 50%. Multiply that number by the hours you are expected to work on the project for your total price.

If there's one overarching theme that holds true, the freelance economy is trending upward. Companies need to be agile and cost-effective; workers must position themselves as experts to secure income.

Ultimately, everyone can benefit from this new approach to work – companies cutting costs and workers positioning themselves as indispensable.

But only if both parties prepare.