The Liquid Workforce is the Future of Work
The impact of the freelance economy is already significant, contributing nearly 5% of U.S. GDP. But beyond dollars, the liquid workforce is reshaping the future of work. Working with freelancers every day, Liquid’s Chief Experience Officer Yolanda Lau is continually looking at the changes in how we work and what we work on. These are her predictions of the key trends for the liquid workforce in the year ahead.
1. The professional workforce will continue to shift more from full-time employees toward the liquid workforce.
Skilled services represent the largest freelancing category, according to a joint study by Upwork and Freelancers Union, “Freelancing in America.” The same research found that 35% of U.S. workers freelance already, with over 60% starting in the last five years. Millennials and Gen Z are more likely to freelance as well as to hire freelancers.
This shift will require companies to approach and manage their liquid workforce strategically, rather than transactionally. HR leaders must develop new policies and processes to manage a blended workforce.
2. A global talent shortage will increase the pace at which companies engage the liquid workforce.
Deloitte reports that 45% of employers are having trouble filling open positions, a challenge that becomes even greater the larger the company. Tapping into the liquid workforce will help companies close their talent gaps and rapidly respond to business needs.
However, the war for talent will extend to the liquid workforce. Business leaders need to invest in processes, policies, and systems that will help them source, attract and retain the best liquid talent. Your onboarding process is just as crucial for building a relationship with a freelancer as with a new employee.
3. The expansion of the liquid workforce will create a workforce that is increasingly geographically distributed.
Over the next decade, an overwhelming number of companies will engage with remote workers — both in terms of traditional employees and freelancers. The growth in communication, project management, and collaboration technology options is accelerating the growth of virtual teams and the ease of integrating freelance workers.
Businesses need to take a strategic approach to build out and grow a virtual workforce. A study published by Harvard Business Review found that companies that prioritized working slowly and strategically averaged 40% higher sales and 52% higher operating profits over three years. Invest in training your managers to develop the skills required to manage a virtual and blended workforce successfully.
4. The liquid workforce is fueling a new skills-based economy.
The World Economic Forum’s “Future of Jobs” report notes that “by 2022, no less than 54% of all employees will require significant re and upskilling.” Freelancers recognize the importance of continually updating and expanding their skills. “Freelancing in America” found that over 60% of skilled freelancers have done skill training in the last six months, 1.6 times the rate of non-freelancers. Freelancers are investing time in developing both soft and hard skills.
Course offerings with marketplaces like Udemy, university courses through edX, vendor certifications, professional association classes, and more make it easy for freelancers to keep upskilling. Automation technology and AI may be disruptive, but for skilled freelance workers, these technologies offer the opportunity to be more effective and efficient, while honing their skill-based services.
5. Growth in the liquid workforce will reshape employee retention strategies.
Managing Freelancers and Vendors?
Our customers report saving 20 hours per month (on average) when they use Liquid’s complete contractor and vendor management system.
For highly skilled workers, freelancing offers the opportunity to make as much or more than they do in full-time jobs while enjoying more flexibility, greater control, and better work-life balance. The risk of losing top talent is even greater with millennials and Gen Z-ers.
Business leaders need to evolve their current policies, practices, and programs to retain employees. Consider incorporating elements based on the benefits of freelancing. For example, foster alternative work arrangements. Increase support for self-development, and structure more project-based work.
Download Liquid’s Independent Contractor Agreement Checklist as a handy reference guide.
6. Focus on the rights of freelance workers will continue.
With California’s AB5 law now in effect, other state legislatures are also considering new rules and regulations related to freelancers. However, any other legislation passed is not expected to be as extensive as AB5.
The continued focus on regulations related to freelance workers underlines the importance of ensuring your company has an onboarding process for freelancers, including all the necessary documentation to avoid any potential misclassification issues, and a detailed contract.
The liquid workforce is reshaping the future of work. Managers will need new skills to lead a blended workforce of employees and liquid workers successfully. Companies must adapt their cultures, processes, and systems to capitalize on the potential of the liquid workforce. Is your company ready for the liquid workforce?
Note, this article was originally published on Forbes and appears here under license by the author (Liquid’s CXO Yolanda Lau).