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Final fall, we polled startups on their views of the flexible workforce. We saved the questions open-ended to keep away from biasing the information set however anticipated a usually optimistic sentiment.
What we discovered is that versatile expertise is now not simply another hiring technique. It’s a basic driver for profitability, development, and innovation. Startups persistently cited three core advantages:
- Entry new markets and not using a headquarters or full in-house workforce
- Achieve executive-level experience in gross sales, product, operations, finance and advertising and marketing at a fraction of the price
- Scale effectively, investing solely when demand is validated
The advantages are clear, however are mature companies embracing this shift?
Latest information from contractor-of-record Mellow says completely. Their latest report exhibits a 260% improve in U.S. companies hiring freelancers from 2022 to 2024. Their report additionally exhibits the place U.S. companies are hiring freelancers, what abilities are in demand, and the broader implications for entrepreneurs, executives and enterprise house owners.
Associated: Why Side Hustles Are Reshaping Careers in the Future of Work
Freelance did not simply survive, it thrived by way of two troublesome years
The previous two years have been difficult. Waves of layoffs, rising inflation and widespread hiring freezes. If the versatile workforce had been a fad, it will have pale away like different short-lived enterprise fads. NFTs, quiet quitting and the great resignation — ring a bell?
As an alternative, corporations are doubling down on their versatile workforce. Resume Builder confirmed that 40% of corporations had been hiring contractors to exchange laid-off employees, whereas 53% moved full-time employees to contract positions in 2023. Mellow’s information exhibits this pattern continued into 2024.
Later on this article, I am going to clarify why freelancers aren’t only a short-term repair however as an alternative a strategic benefit in immediately’s layoff-prone surroundings.
Associated: Why Good People Are Really Quitting (and How to Keep Them)
Firms are hiring extra freelancers
Firms averaged hiring 15 freelancers on this two-year span, making up 8% of their whole workforce.
8% is critical. The freelance economic system continues to be comparatively younger. Though Grand View Partners estimates that world freelance platforms have a 17.7% CAGR for 2025 to 2030, freelancers sometimes make up lower than 1% of an organization’s workforce. Freelancers are generally hidden and coded as short-term employees, part-time consultants or vendor names to keep away from confusion or purple flags.
Sure industries are main the best way and supply a blueprint that others can observe. Edtech corporations averaged 108 freelancers, whereas promoting corporations averaged 34 contractors. The analysis reviews that “it wasn’t uncommon to search out extra freelancers than full time workers.”
Will Edtech and promoting sign what’s in retailer for different industries?
A Rising tide lifts all boats (geographically)
Each freelancer employed in Mellow’s information was primarily based outdoors the U.S.
For many People, this in all probability appears alarming, feeling eerily just like the gutting of the Rust Belt in manufacturing.
However that is only a portion of the story. Mellow is a contractor-of-record for U.S. corporations hiring from rising areas. And once we take a look at the broader freelance information, we see the larger image. As an alternative of concern, we see freelance as a world pattern, with versatile working fashions as a world commonplace that People can profit from reasonably than get replaced by.
Reasonably than changing U.S. employees, the shift to versatile work fashions is creating new alternatives for each companies and people.
This turns into obvious whenever you take a look at latest information.
- Main freelancer finance platform Collective exhibits an 8.27% YoY increase in income for U.S. solopreneurs from 2023 to 2024.
- MBO Partners confirmed a 103.6% improve in U.S. full-time impartial employees from 2020 to 2024 and a 56.6% improve in U.S. independents making over $100,000 USD.
- MBO additionally confirmed a 5.45% greater CAGR for the U.S. impartial workforce in comparison with conventional employment. Evaluate this to full-time stats, and the distinction is clear.
Freelance is not about offshoring; it is about decentralizing work and enabling companies to be extra agile.
Associated: How Flexible Talent Is Transforming Consulting
Hiring in Japanese Europe is hovering whereas Western Europe declines
The largest winner was Japanese Europe. There was a 106% improve in North American Firms hiring from Poland, Romania and Hungary. When you’ve seen your entrepreneurial buddies reserving flights to Poland to go to their improvement workforce, because of this.
Based on Alex Norovyatkin, Head of Development for Mellow, “As you possibly can see, increasingly corporations are hiring Japanese European contractors. There’s a good steadiness of workforce price and abilities. This inhabitants actually needs to work for U.S. corporations.”
Different key insights from Mellow’s information:
- MENA noticed a 60% improve in hiring from North American corporations
- Asia skilled a 39% improve
- Freelancer hiring within the EU dropped by 40%. Norovyatkin cited strict contractor laws as a purpose for the drop.
Return-to-office (RTO) and layoffs will probably improve the freelance workforce
2025 presents an attention-grabbing set of challenges for the freelance workforce. A latest Washington Submit headline states, “Layoffs hit contractors,” in reference to the U.S. Authorities. Layoffs additionally occurred throughout Salesforce, Workday and Walmart this 12 months.
In the meantime, main companies like Dell, Amazon, and JPMorgan are imposing strict RTO mandates.
In each instances, I predict hiring freelancers will improve.
Concerning layoffs, alongside the Resume Builder information above, freelancers are uniquely positioned to achieve a layoff-prone surroundings since they’re sometimes embedded inside groups, 30 to 60% cheaper than comparable exterior expertise options, and have fewer strings connected, enabling leaders to scale down reasonably than lay off.
Concerning RTO mandates, freelance is not solely distant. The truth is, in-person freelance fashions are a fast-growing phase. Spurred by front-line workforce expertise platforms specialised in retail, hospitality, and even manufacturing facility employees, in-person freelance fashions are fixing large challenges for a historically excessive churn, excessive burnout, and high-cost workforce.
AI accelerates the necessity for fractional expertise
Gen AI drives demand for fractional AI expertise alongside complementary roles reminiscent of net design and analysis evaluation. Mellow’s information signifies a 130% improve in freelance net developer hiring, a 52% improve in programmers, a 50% improve in analysts, and a 28% improve in designers.
AI can also be pushing the shift from role-based hiring to skills-based hiring, and expertise platforms are perfect for this. Expertise Platforms are to recruiting what Uber was to taxi’s. As an alternative of prolonged resumes and armies of recruiters, expertise platforms use tagging, digital networks, and human-in-the-loop recruiters to match precise ability units with the hiring supervisor’s precise wants. On common, discovering the proper candidate in 2 to five days, at 30-60% price financial savings, with expectations met greater than 90% of the time.
In each instances, the influence is that reasonably than sustaining a big, bureaucratic, full time core, corporations can function with a lean workforce of full-time workers supported by an in depth freelance community.
Embrace freelance to keep away from disruption
Expertise is now not simply an HR technique, it is a core business strategy that enterprise house owners, entrepreneurs, and executives should embrace.
The info makes it clear that corporations are already embracing versatile work, and the shift is not nearly price financial savings; it is about responding to digital advances like Agentic AI.
However what if that is not you? What for those who’re an entrepreneur who sticks with a full-time mindset?
Sadly, time is not in your facet, and in contrast to technological advances earlier than, being late doesn’t suggest decrease costs; it means being locked out from one of the best expertise. Opposite to the parable of freelancers bouncing from one consumer to the subsequent, freelancers keep on with two to 5 purchasers they like, adjusting their workload primarily based on demand. Which means that whereas there may be an abundance of freelancers immediately, there is likely to be a scarcity tomorrow, and when that scarcity comes, you may be locked out. And information exhibits that this scarcity would possibly come earlier than you suppose.
Have you ever heard Ernest Hemingway’s well-known quote in The Solar Additionally Rises? When Invoice was requested how we went bankrupt, he replied, “Two methods. Regularly, then immediately.“
Do not be Invoice. You’ve got had two years to take gradual steps. Now we’re within the “immediately,” and firms and not using a versatile workforce are simply ready for developments like DeepSeek, macro-economic occasions like tariffs, or one thing as random as a competitor product that will get the TikTok algorithm proper to be disrupted.
When you’re an entrepreneur, you are in a fortunate place. Reasonably than worrying about structural change and purple tape, you possibly can disrupt “immediately” by embracing a small full-time core with a big community of freelancers to unlock agility, flexibility, and scalability whenever you discover that hit.
