The modern workforce is quickly evolving into a model where many more employees are choosing to work as independent contractors (freelancers) versus full-time employees. And many organizations are realizing the benefits of this. There will always be full-time, salaried employees, but the tide is turning. Job openings hit rock bottom at 8.7M in October 2023, a tide not seen since March 2021. This means many folks are out of work, with few full-time open roles available.
One of the reasons is that full time employees are sticking around like the captain of their own ship. This is interesting because job satisfaction is on a rollercoaster, dropping 10% this year. In this workstorm, we’re all grappling with change, risking the unknown, and holding onto the “devil we know.” Blame it on inflation, munching on paychecks, and RTO plans to remind us why we don’t miss the nightmares of commuting in most major cities.
To say that 2023 was rough is an understatement. Close to 40% of Americans have waved goodbye to their pandemic savings, student loan repayments are back on the scene, and credit card debt has skyrocketed to a jaw-dropping $1T+. Combine that with a ton of layoffs, especially in the tech world due to pandemic-binge hiring, and there are a lot of folks looking for work.
Amid these massive impacts, 2024 is emerging as a pivotal and critical moment for reshaping the landscape of work. We’re calling the “Chaos vs. Certainty” trend a shift that underscores the importance of navigating the transition from uncertainty into a new paradigm characterized by well-defined work norms. TL: DR, we are never returning to the way things were.
That doesn’t mean companies won’t be hiring again in the New Year, especially as interest rates hopefully decrease and inflation stabilizes. The contingent workforce, comprising freelancers, consultants, and contractors, is projected to grow by 53 percent globally in 2023. The expansion of the contingent workforce is seen as a solution to talent shortages, layoffs, and hiring freezes in certain industries. Utilizing contingent workers offers advantages such as closing skill gaps without committing to full-time hires.
Workers are increasingly gravitating toward freelance work due to a desire for autonomy and flexibility. The perception of gig work has evolved positively, with freelancers reporting richer lives despite the challenges. Many independent workers have found alternative healthcare coverage and benefits such as 401K and insurance outside of the traditional full-time work benefits. What was once a major benefit and draw of full-time employment has been waning with many new self-service options on the market.
Contingent hiring allows employers to observe employee performance without long-term commitments, particularly in the face of skill shortages. Likewise, employees can “try before they buy,” as a temp to perm is sometimes an option. In addition, Retention has become a challenge for talent leaders, with high turnover possibly correlating with increased hiring of contingent workers to fill skill gaps. Economic issues and labor shortages contribute to the persistence of the contingent work trend, as employers seek strategic roles without increasing permanent headcount.
Contingent workers are distributed across generations and experience levels, with an even distribution among different experience groups. The trend also has implications for diversity, equity, and inclusion (DEI) efforts, allowing more opportunities for marginalized groups. The flexibility offered by contingent work makes it an attractive option for re-entering the workforce, especially for those who may have taken time off from their careers. In 2024, contingent workers are expected to be hired even for more experienced positions, aligning with uncertain economic conditions.
Employers are advised to adopt an elastic talent strategy to meet their needs in the evolving contingent work landscape effectively. Despite some of the statistics, I am optimistic that there will be a good number of net new roles plus a bump in the usual New Year turnover where folks have already set their eyes on new jobs and waited until the calendar page turned. As a recruiter and career coach, I am excited to see how more workers take control of their career trajectories and redefine the modern workforce.
