In the ‘90s, casual Fridays brought about the slow death of formal business attire in the office. In the new millennium, mobile devices effectively eliminated the 9-to-5 workday and erased the line between personal and professional. Now, the gig economy is about to kill the concept of a company employee.
The freelance workforce is growing three times faster than the U.S workforce. At this rate, according to a recent survey by Upwork and the Freelancers Union, independent workers will be the majority by 2027. Yes, more people will work for themselves than for corporations, and they will be doing it because the want to — not because they have to.
The work is not what you would think of as typical gig economy jobs, like being an Uber driver. According to the survey of close to 6,000 adults, this group is preparing for the future more swiftly than traditional employees. Nearly half of the freelancers surveyed told researchers that their work is being affected by AI and robotics, as compared to only 18% of the traditional workforce. As a result, 65% of freelance workers are putting time aside to learn new skills, compared to 45% of traditional corporate employees.
This specialized workforce is finding independence because it is developing high-demand skill sets, creating an opportunity for them to offer their time to the highest bidder. Rather than work on projects dictated by an organization for a set salary, they can choose to work on various projects based on their interest for multiple companies, selecting projects that advance or refine their skill sets, deepening their experience — which increases their market value. This practice, commonly seen among IT workers, is now making its way into other areas like marketing and HR where there’s now more use of digital tools and platforms.
It’s not only employees who are driving this trend. Employers see this as an opportunity to optimize their staff cost. The open talent economy described by Deloitte is expected to grow significantly in the next three to five years. According to Deloitte research, the number of off-balance-sheet employees will grow 66% over that time period. While only 6% of the C-Suite rated this trend a priority in 2017, 26% believe it will be important in the next three to five years, an increase of 400%, one of the largest increases seen in the company’s annual “Global Human Capital Trends” report.
Enabling these trends are digital platforms like Upwork, BTG and Carbon Design. A McKinsey Global Institute report, “A labor market that works: Connecting talent with opportunity in the digital age,” states that these platforms could boost global GDP by $2.7 trillion by optimizing the match between work and employees, and by pulling 47 million inactive people (globally) into the workforce.
As the U.S. reaches full employment these inactive workers will be a critical source of labor capacity.
Unemployment fell to its lowest rate since 2000 — 4.1% — in Q4 of 2017, as reported by The Wall Street Journal. A tight labor market will increase competition and opportunity for employees with specialized, in-demand skill sets.
Talent now has leverage, though certain issues may slow this revolution in the workplace. Obtaining healthcare is the primary challenge; retooling and training of inactive workers is another. Look for these talent platforms and AI to play a role in resolving those challenges in the future. Additionally, changes to regulatory frameworks, corporate practices and individual mindsets may be required, according to McKinsey’s research.
One thing is certain: The forces behind this transformation are accelerating, driven by recent tax changes. Apple and Amazon have announced they will be creating tens of thousands of jobs in the U.S. Adding that number of new positions to an already tight labor will force us to think about how work is done, and who does it. The jobs may be here, but that may not be where the work gets done. We may not only see the death of the company employee, but also an end to the concept of a domestic workforce.
by Scott Gillum
Appeared first in Media Village