10 midyear macro-trends in contingent workforce – looking at trends and data so far in 2024, and exploring what’s around the corner.

1. Remote and Hybrid Work Models?

• Hybrid Work: A 麦肯锡 study found that 42% of contingent workers report having flexible working arrangements compared to 35% of traditional employees.?

• Hybrid Workforce Solutions: Gartner reports that 50% of large enterprises are adopting hybrid workforce models that combine permanent and contingent workers.?

• Sustained Remote Work: A report by Upwork indicated that 22% of the American workforce, including contingent workers, will be remote by 2025, up from 16.8% before the pandemic.??

2. Technology and Automation?

• AI and Machine Learning: According to a recent 德勤 survey, 60% of organizations employing contingent workers are integrating AI and machine learning to manage and optimize their contingent workforce.?

• Vendor Adoption: VMS providers including Flextrack Inc , Beeline , and Workday VNDLY have deployed advanced AI tools and capabilities to enhance the experience for both hiring manager and talent. Candidate matching, analytics and workflow process automation are among some of the key advancements. ?

3. Employee Well-being and Mental Health?

• Focus on Well-being: According to a Staffing Industry Analysts report, 70% of companies are expanding wellness programs to include contingent workers, recognizing the importance of their well-being for overall productivity. Further, a Gallup survey found that 68% of contingent workers prioritize mental health support when choosing assignments, leading companies to enhance their well-being programs.?

• Burnout Prevention: The American Psychological Association found that 64% of contingent workers experience burnout, leading companies to implement more robust mental health support systems. Adding to this, HBR found that 61% of contingent workers reported feeling isolated or disconnected, prompting employers to implement better support systems and team integration practices.?

4. Diversity, Equity, and Inclusion (DEI)?

• DEI Initiatives: The Institute for Supply Management found that companies with comprehensive DEI policies report a 20% increase in the engagement of their contingent workforce, and SIA found that number to be 30% when considering increase in satisfaction and retention of contingent workers.?

• Transparency and Accountability: A survey by Glassdoor found that 72% of contingent workers consider a company’s DEI efforts important when accepting a job. DEI has become more integral to CWPs in 2024, who have tapped into the growing sub-segment of DEI professionals to build and grow their programs. The emergence and growth of the Chief Diversity Officer?and supporting personnel is a great example of this in larger companies.

5. Skill Development and Lifelong Learning?

• Reskilling and Upskilling: The World Economic Forum predicts that 40% of contingent workers will require reskilling by 2025 due to technological advancements. This is supported by LinkedIn data revealing that 35% of contingent workers participated in online courses in 2023 to improve their skills, reflecting the importance of continuous learning.?

• Digital Literacy: LinkedIn’s 2023 Workplace Learning Report highlighted that 45% of learning and development budgets are being allocated to reskilling contingent workers, focusing on digital literacy and new technologies in 2024 and beyond.?

6. Gig Economy and Contingent Workforce?

• Growth of Gig Work: The Bureau of Labor Statistics reported that the gig economy, including freelancers and contract workers, grew by 15% in 2023 and is projected to encompass 50% of the U.S. workforce by 2030. As part of this growth, MBO Partners very own research projects that the number of independent professionals in the U.S. will have grown from 41 million in 2022 to 51 million by 2025.?

• Not Going Away: According to SIA, 52% of companies are increasing their use of contingent workers to remain agile and responsive to market changes. The global gig economy reached $455 billion last year and is expected to grow to $920 billion within the next seven years. ?

7. Workplace Flexibility?

• Flexible Work Hours: FlexJobs found that 80% of contingent workers prefer jobs with flexible hours, and Upwork found that 74% of contingent workers prefer jobs with flexible schedules, pushing companies to offer more adaptable working conditions?

• Work from Anywhere: Data from SHRM indicates that 62% of contingent workers seek the ability to work from various locations. MBOs research on this matter indicated that 76% of independent workers prefer the ability to work from various locations, influencing companies to adopt more flexible work-from-anywhere policies.?

8. Direct Sourcing Continues to Take Roots?

• Increased Adoption: According to a report by Staffing Industry Analysts, 60% of large enterprises are expected to use direct sourcing platforms by the end of 2024, up from 40% in 2022. ?

• Solution Maturation: Direct sourcing platforms have matured rapidly in the last 12 months.?Many of these are integrating AI and machine learning for sourcing talent. For example, Eightfold AI reported a 30% improvement in candidate matching accuracy due to AI enhancements.?

• Leading Lights: Firms including Cisco, J&J, KPMG, PwC, PepsiCo., and P&G continue to mature their direct sourcing programs with tools and processes to enhance talent pooling, candidate experience, and integrations & automations. ?

9. Regulatory Changes?

• Federal Regulations: 2024 has seen some impactful regulatory changes notably including the DOLs?introduction of a final rule aimed at redefining and tightening the criteria for classifying workers as independent contractors. This rule came into effect a couple of months ago, and replaces the 2021 guidelines making it more difficult for companies to classify workers as independent contractors rather than employees. The new rule emphasizes the economic realities test, considering factors such as the worker's degree of control over their work, opportunities for profit or loss, and the permanence of the working relationship. This change is expected to increase the number of workers eligible for employee benefits and protections, potentially raising operational costs for companies relying heavily on contingent labor.?

• Local Changes: Several States have introduced new laws and regulations around sick time, overtime, and classification requirements. These add to new federal regulations such as that for overtime pay under the FLSA, effective from July 1st. ?

• Outside of the US: Of course, every country has new laws and regulations constantly rolling out to keep up with the continued growth of the contingent workforce.?Big changes have also been introduced by the European Commission proposing new rules to address remote work, including tax considerations and employee rights for cross-border contingent workers. Additionally, the EU Platform Directive came into effect. It is currently assumed that there are more than 5 million workers in the platform economy who are wrongly categorized as self-employed, so the directive was brought into ensure proper classification worker protections. ?

10. Broadening Horizons??

• Expanded Services: MSPs are broadening their offerings to include strategic workforce planning. Allegis Global Solutions reported a 20% increase in client adoption of these extended services last year. With many companies bringing their CWP internally, MSPs will need to continue to adapt and provide new solutions to their customers. ??

• VMS Market Growth: The global market for VMS’s is expected to grow from $3.6 billion in 2021 to $4.5 billion by the end of this year, driven by increased demand for efficient contingent workforce management solutions (MarketsandMarkets).?

• Enhanced Analytics: The prominent VMS providers are offering advanced analytics capabilities that are driving cost savings and efficiency. For example, Beeline reports that their data analytics tools have already helped clients reduce contingent labor costs by 10-15%.?

• Topping up Talent Pools: According to Ardent Partners , 70% of companies reported using direct sourcing to tap into private talent pools in 2024, up from 55% in 2022. This growth doesn’t show signs of abating any time soon. ?

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What are some of the midyear macro-trends and shifts that I’ve missed? I’d love to hear some other perspectives on what the rest of the year holds, and what to be on the lookout for in 2025 and beyond.?