IES Blog

Engaging Independent Contractors in a Complex World

Posted on December 18th, 2019 Read time: 2 minutes

Today, companies are turning toward an agile business structure to ensure they’re meeting the needs of their customers and the entire business marketplace. As a result, they’re searching for talent to meet shifting demands.

More and more, they’re finding that talent in independent contractors. In fact, a survey by Upwork and the Freelancers Union projects that over half of the labor force will be independent workers by 2027.

The workforce of the future demands that companies hire more independent contractors to stay competitive and maintain profitability. Because they’re under increasing pressure to vet and comply with continually shifting and complicated employment classifications, they’ll have to evolve their workforce strategies as they do.

Contingent Workforce Trends for a Stronger Future

According to Gallup, 36% of the workforce today consists of gig economy workers in some capacity, and the number of freelancers in the U.S. is 62.2 million. But even with the contingent workforce growing at such a fast pace, it will take companies some time to catch up.

As more people than ever start entering the contingent workforce and more businesses than ever start making that workforce a key part of what they do, take note of some present trends that are shaping the future:

1. Shifting workforce skills
Automation, artificial intelligence, and machine learning are replacing repetitive, manual jobs and driving demand for advanced cognitive reasoning skills to develop and adapt the technology. McKinsey’s “Skill Shift: Automation and the Future of the Workforce” report predicts that the most substantial need will be IT and programming skills in industries ranging from banking to energy to retail.

Current AI adopters are already anticipating shifts in the workplace, as 96% believe it will impact organizational structure. Many highly educated workers are already seeking engagements as independent technology contractors and freelancers to help meet that demand.

2. Agile business structure
Speed and flexibility are vital for maintaining a competitive advantage in business, and many companies are turning toward agile business models to better adapt to ever-changing landscapes. Agile businesses replace traditional hierarchy with flexible networks of teams, a model ideally suited to engaging independent contractors and freelancers. Independent workers can be tapped quickly to support groups or organizations, like seasonal businesses, with specialized skills at specific times. Further, agile teams are project-focused and can incorporate contractors seamlessly into operations with minimal disruption to workflow and company culture.

3. Evolving legal regulation
With more than half of workers projected to identify as independent contractors by 2027, it’s imperative that businesses understand the risks associated with hiring them. Worker classification, which involves technicalities like understanding independent contractor vs. employee differences, is critical to contingent workforce planning.

States are increasingly changing those classifications — or at least the rights associated with them. For example, the state of California signed Assembly Bill No. 5 (AB5) into law earlier this year to grant more rights and protections to gig workers. Keep an eye on legal regulations associated with independent contractors to avoid hefty fines or more serious consequences.

The contingent workforce is evolving as more companies adopt an agile business structure. Watch for trends to ensure you’re not only compliant with regulations, but also finding the right talent at the right time. As you do this, you’ll see your organization grow and transform into an organization of the future rather than a relic from the past.

Learn how IES can partner with your business to create customized solutions to help you with your contingent workforce needs. Connect with us today!


Related Articles