The Rising Role of Contingent Workers in the Future of Work

As we approach the third anniversary of the emergence of COVID-19, it is evident that the pandemic has significantly impacted the future of work. As we look ahead to the year 2023, organizations are confronted with unprecedented challenges, such as a highly competitive talent market, a workforce that is fatigued and overworked, and the need to manage costs effectively. Against this backdrop, it is crucial for organizations to proactively address nine critical trends as they set out to establish strategic workforce and talent objectives. These trends represent key areas that companies must focus on to succeed in the new world of work. By staying abreast of these trends, organizations can remain competitive, attract top talent, and build a sustainable workforce for the future.

How the Gig Economy is Shaping the New World of Work

One of the most significant trends in this new landscape is the rise of contingent workers – freelancers, independent contractors, and temporary staff. As businesses increasingly rely on these flexible workers to meet their needs, it is essential to understand the role contingent workers will play in the future of work.

Today there are already approximately 1.6 billion Contingent workers worldwide (all incl), some of them do have a permanent job and do work freelance on the side. There are bout 72 million freelancers in the US, expected to be 87 million by 2027 and 30 million in the EU expected to be 34 million by 2027. In Denmark we have around 180.000 freelancers equivalent to 6% of the entire workforce.

September ’21, Google had employed more freelancers than full-time employees (150,000 vs. 144,000)!

What is a Contingent Worker

 A contingent worker, also known as a freelancer /independent contractor and even temporary worker, is hired by organizations to provide specialized services on a temporary or project basis. Unlike traditional employees, contingent workers are not hired for ongoing employment, but rather for specific projects or tasks. This means that they are not guaranteed continuous work unless there is a need for their services in another project.

As independent contractors, contingent workers have control over their work schedule and methods of completing tasks. They can work on-site or remotely and choose when and how to complete their assigned tasks if they meet the agreed-upon deadlines.

Organizations do not include contingent workers on their payroll, and they do not receive employee benefits such as health insurance or retirement plans. Instead, they are compensated on a project-by-project basis, without receiving a salary.

Gig, contract freelance, and temporary workers make up 36% of the entire US workforce!

Flexible Workforce Meets Business Needs

In today's fast-paced, competitive business environment, companies must adapt quickly to changing market conditions and customer demands. This has led to an increased reliance on contingent workers to fill skills gaps, address project needs, and adapt to fluctuations in demand. By leveraging a flexible workforce, organizations can scale their teams up or down as needed, reduce overhead costs, and access specialized skills on a project-by-project basis.

A true corporate meritocracy can only exist when the best person for the job is hired for every role.

Also, businesses constantly strive to maintain a competitive edge in this highly competitive and volatile global market. Resources being the most expensive investment, companies try to achieve maximum efficiency. However, challenges like skill shortages and unplanned attrition are causing project delays and budget overruns, adversely impacting business profitability and sustainability.

An on-demand workforce can be a saving grace to overcome these resourcing challenges amid the rapidly evolving business dynamics. They come with no extra frills, like lead time or overhead costs, and are viable for project-centric organizations.

Technology Drives Contingent Work

Advancements in technology have made it easier than ever for contingent workers to find and secure assignments. Online platforms, such as VMS (Vender Management Systems) solutions, connect businesses with a diverse pool of high-quality contingent workers, streamlining the talent acquisition process. These platforms also offer tools and resources to help contingent workers manage their careers, track projects, and invoice clients, empowering them to thrive in the gig economy.

Emerging Industries Demand New Skills

As the global economy shifts towards emerging industries like green energy, artificial intelligence, and advanced manufacturing, the demand for specialized skills and expertise is on the rise. Contingent workers play a crucial role in meeting this demand, as they can quickly upskill or reskill to stay relevant in the job market. This agility allows companies to tap into the contingent workforce to access the specialized talent they need to stay competitive.

 Every organisation in every industry needs a Contingent workforce strategy; Not having one is like missing the internet revolution in the 1990s or the mobile revolution in 2020 - Paul Estes, Google

The Evolving Nature of Work

 The concept of a traditional 9-to-5 job is being redefined by the gig economy. More people are seeking flexibility, autonomy, and work-life balance, and contingent work offers an attractive alternative to traditional employment. As the gig economy grows, businesses and workers alike will need to adapt to this new world of work, embracing the opportunities and challenges that come with it.

Regulatory Changes and the Future of Contingent Work

As the role of contingent workers continues to grow, regulatory bodies are taking notice. Governments worldwide are examining how to adapt labor laws and social security systems to protect the rights and benefits of contingent workers. The future of work will likely see a continued evolution in these regulations, which will impact both businesses and contingent workers alike.

 7 out of 10 workers in the Nordics are thinking about freelancing in the future.

Conclusion

 The rise of contingent workers is reshaping the future of work, offering businesses the flexibility and specialized talent they need to thrive in an ever-changing business landscape. As technology advances and the demand for specialized skills grows, the gig economy will continue to play a significant role in the global workforce. Businesses and workers must adapt to this new reality, embracing the opportunities and challenges that come with it, to remain competitive and successful in the future.