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The workforce has undergone seismic shifts in the last 4 years.
Driven by the pandemic, big resignation and the rapid adoption of remote work, the “freelance economy” has looked promising as the future workforce.
But then 2024 happened. Mass layoffs replaced mass resignation. Office return policies from Amazon THE vein replaced the widespread acceptance of remote work. The combination of inflation with an uncertain economy strongly challenged employees' belief that freelancing is more secure than a full-time job.
State of Independence MBO 2024 Partners REPORT clearly shows that individuals, even in a difficult economy, are overwhelmingly choosing independence over full-time employment. What does this mean for entrepreneurs and executives as they seek to buy into their company's most important asset: people? Let's dive in.
Quick context: I'll use “independence” and “independent” interchangeably here. In this discussion, “self-employed” refers specifically to choosing to work under a 1099 contract rather than full-time W2 employment.
In a distant first world, workers continue to choose freelancing over full-time
Individuals choosing full-time freelancing rose from 13.6 million in 2020 to 27.7 million in 2024, steadily increasing year over year, while part-time or casual freelancers fell in 2024. These findings are in accordance with Deloitte's findings that 55% of workers already have or are likely to change their working method from full-time employment to freelance projects.
So why are individuals staying? independent?
Evidence shows that working for themselves makes individuals happier, healthier and more confident. 84% of individuals say they are happier working independently, 79% say it is better for their health to work for themselves, and 65% say they feel safer working independently. Further, the number of freelancers earning over $100,000 grew by 2% from 2023 to 2024 – a total of 4.7 million Americans.
Freelancing is also becoming easier. Among the main challenges of predictable income, retirement, benefits and job security, all four have decreased significantly from 2012 to now. For example, 20% fewer independents cited retirement as a challenge today.
Related: The rise of the self-employed in the global workforce and what business owners need to know
Why entrepreneurs and executives should embrace the freelance workforce
A freelance independent workforce certainly challenges conventional wisdom about leadership, management, and talent-related norms. For example, the way HR, talent acquisition, and outsourced talent management have traditionally operated creates suboptimal conditions for an independent workforce. But instead of focusing on the potential downside, the report highlights two massive benefits for every entrepreneur and executive.
The first is globalization.
You need a global footprint in today's economy. For example, Airbnb's second quarter earnings report states that “Latin America and Asia-Pacific continue to be our fastest growing regions.” Do you have any way to access these markets? The traditional method of a permanent entity and attracting full-time talent can be very slow or costly. Instead, there are over 435 million freelancers worldwide, according to the World Bankand there is a corresponding independent talent platform in each region.
The second is embracing technology. Whether it's AI, blockchain or whatever new technology comes tomorrow, freelancers have a higher rate of improvement and adoption than their full-time counterparts.
According to Deloitte data, freelancers have a higher degree of qualification than full-time employees. 60% of freelancers have updated their skills in the past 6 months, compared to 49% of traditional employees who have updated their skills in the past 12 months.
In the MBO report, 65% of freelancers in 2024 are using Gen AI in their workflow, an increase of 28% from 2023. The business impact is also clear, as 95% of freelancers say AI it makes them more competitive.
Related: How to Run a 6 Figure Freelance Business in 20 Hours a Week
How to start
Like most aspects of business, what worked for your talent strategy over the past 75 years likely won't work for the next 5 years. Talent is being disrupted by both technology and individuals' expectations of work. The state of MBO's Independence makes it clear that the talent will not move. Even in the midst of layoffs, the push for remote work, and an uncertain economy, top talent will continue to choose to freelance.
The question for you is: How will you embrace the freelance workforce?
A start is to find your first pool of relevant freelance talent.
How do you find the right pool for freelancers? LinkedIn is the first port of call. However, effectively scaling your freelance talent pools requires a strong partnership with a freelance talent platform. There are over 800 global talent platforms, more and more specializing in all skills, industries and regions and they are the experts in finding, organizing and mobilizing independent talent.
The choice is yours. Do you want a growing future workforce or a permanently shrinking workforce? Follow my channel to make sure you are ready for the future of work.