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Over the last 4 years, the workforce has undergone seismic changes.
Spurred on by the pandemic, the great cancellation, and the immediate adoption of distant work, the “freelance economy” looked promising as the future workforce.
But then 2024 happened. Massive layoffs replaced the great resignation. Amazon and Dell’s return-to-office policies have replaced widespread acceptance of distant work. The combination of inflation and economic uncertainty has severely undermined workers’ confidence that freelancing is safer than full-time work.
State of Independence of MBO 2024 Partners report clearly shows that residents, even in the face of a difficult economic situation, overwhelmingly select independence over full-time employment. What does this mean for entrepreneurs and managers who want to acquire their company’s most significant asset: people? Let’s dive in.
A bit context: I’ll use the words “independent” and “freelance” interchangeably here. In this discussion, “freelancer” specifically refers to selecting to work under a 1099 contract relatively than full-time W2 employment.
In a remote-first world, employees proceed to select freelance work over full-time work
The number of individuals selecting to work independently full-time increased from 13.6 million in 2020 to 27.7 million in 2024, with continued year-on-year growth, while in 2024 the variety of independent people working in part-time or occasionally dropped. These findings are consistent with Deloitte findings that 55% of employees have already or are likely to change their working method from full-time employment to freelance projects.
So why do people remain independent workers?
Data shows that being self-employed makes people happier, healthier and safer. 84% of individuals say they are happier working alone, 79% say being self-employed is higher for their health, and 65% say they feel safer working independently. Moreover, the variety of independents earning greater than $100,000 increased by 2% from 2023 to 2024 – a total of 4.7 million Americans.
Freelancing is also becoming easier. For the most significant challenges of predictable income, retirement, advantages and job security, all 4 challenges have decreased significantly from 2012 to the present. For example, 20% fewer independent people now find retirement a challenge.
Why entrepreneurs and executives should embrace an independent workforce
The independent independent workforce definitely challenges conventional wisdom around leadership, management and talent norms. For example, the traditional way HR, talent acquisition, and external talent leadership operate creates suboptimal conditions for an independent workforce. However, as an alternative of focusing on the potential negatives, the report highlights two huge advantages for every entrepreneur and executive.
The first is globalization.
In today’s economy, you would like a global footprint. 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 a way to access these markets? The traditional method of building a everlasting entity and attracting full-time talent could also be too slow or expensive. Instead, there are over 435 million freelancers worldwide, according to the World Bankand in every region there is a suitable platform for freelance talent.
The second is the approach to technology. Whether it’s artificial intelligence, blockchain, or whatever recent technology emerges tomorrow, freelancers have higher upskilling and adoption rates than their full-time colleagues.
According to Deloitte data, freelancers have a higher upskilling rate than full-time workers. 60% of freelancers have updated their skills in the last 6 months, compared to 49% of traditional workers who have updated their skills in the last 12 months.
The MBO report shows that in 2024, 65% of independent workers are using Gen AI in their workflow, a 28% increase compared to 2023. The business impact is also clear, with 95% of independents saying that artificial intelligence increases their competitiveness.
How to start
As with most points of business, what has worked in your talent strategy for the last 75 years probably won’t work for the next 5 years. Talent development is disrupted by each technology and individuals’ expectations of labor. The State of Independence MBO clearly shows that talent will persist. Even in the face of layoffs, opposition to distant work, and an uncertain economy, top talent will proceed to select freelance work.
The query for you is: How will you embrace an independent workforce?
Start by finding your first pool of suitable freelance talent.
How to find the right independent pool? The first port of call is LinkedIn. However, successfully scaling your freelance talent pools requires a strong partnership with your freelance talent platform. There are over 800 global talent platforms, increasingly specialized across skills, industries and regions. They are experts in finding, organizing and mobilizing independent talent.
The selection is yours. Do you would like to grow your future workforce or reduce the variety of everlasting employees? Follow my channel to make sure you are ready for your skilled future.