The freelance industry is flourishing: more than a million people in the UK identify themselves as freelance workers, and a large proportion of our top graduates say they plan to freelance at least some of the time in their chosen career path. Contingent workers are another workforce category that are being used more frequently, in large part due to the financial crisis that saw many companies struggling to meet rising operating costs.
The freelance worker
According to the Professional Contractors Group, there are around 1.4 million freelance workers in the UK. Currently, most freelance workers are writers, designers, and coders: in article and content writing, blogging and copywriting, translation services, graphic design, PHP, and HTML design. A recent report from eLance on the state of the freelance industry notes that in 2013, 46% more businesses hired freelancers than in the previous year, and made 37% more payments to freelance workers. As well as this, the average hourly rate for freelance work increased by 6.7%. In the UK, therefore, freelancers are in high demand, although the industry sectors in which they're a desirable source of labour are still somewhat restricted.
For graduates, freelancing seems to be a particularly attractive option. According to eLance's survey, 87% of the UK's top graduates look at freelancing as a good career option. Of graduates with first class honours, 21% say they've already decided to make freelancing a career, and 29% of all graduates say their career plan includes at least some freelancing over the next five years. This is likely to be connected to the different aspirations of the new Millennial generation and it is something that companies will need to consider if they want to attract the best graduates. Lifestyle is, in many cases, the main concern of this generation.
Contingent workers are non-permanent employees, people like contractors and consultants, out-sourced workers, and people hired to temporarily fill vacant positions. Depending on the requirements of the position they might be highly-skilled specialists, or people with a wide set of general skills.
The use of contingent workers increased over the past decade in part as a cost-cutting measure to combat the rising costs of labour, but there's another factor driving this change: baby-boomer retirement, and the tendency of many companies to replace retiring workers with contingent hires rather than permanent employees. For some large companies, up to 30% of the hiring budget is allocated to contingent workers. It's a strategy that many companies find useful, because it makes it easy to scale the workforce up and down as needed.
How can employers adapt?
As the size of the freelance and contingent worker pools increase, the size of the permanent labour pool decreases proportionately. Given that such a large proportion of the UK's top graduates are looking on freelancing as an attractive career prospect, it's worthwhile for companies to start thinking about how they can either attract candidates who might otherwise go into freelancing, or how they can adapt to working with freelancers. For example, one strategy might be to hire 'generalist' full-time employees, and hire freelancers and contingent workers when specialists are needed for short-term projects.
The eLance survey points out that 69% of all graduates say that freelance work is attractive because it has the potential to improve work-life balance, and for 38% of graduates, work variety is another advantage. To attract those people, companies may need to adapt by offering graduates more flexible hours, or the possibility of working from home for part of the working week.