Upwork Finds Companies Relying More on Freelancers for Specialized Skills

Gone are the days when freelancers were considered lazy, unreliable, or risky. As the very nature of work changes, companies are finding that a mix of standard employees and freelancers may be the most efficient path to success. In addition, freelancers can also be used to fill skilled labor gaps, reducing strain on existing workforces.

"Businesses are scrambling to adapt and keep up with the rapid pace of change in our world," says Stephane Kasriel, CEO of global freelancing platform Upwork. "In just a few years, a third of the skills needed in the workforce will be brand new. Traditional models of hiring no longer provide the agility businesses need to access in-demand skills when and where they're needed. With 55 million Americans freelancing, businesses are thinking beyond archaic Industrial Era approaches and turning toward flexible hiring to get work done."

Why Companies Need Freelancers

According to Upwork's recent study, "Future Workforce: How Companies Embrace Flexible Teams to Get Work Done," freelancers are becoming more valuable solutions for businesses as work in general becomes more flexible.

"We're seeing four key trends driving businesses' adoption of freelancers: persistent hiring difficulties, local talent shortages, technology empowering flexible work, and professionals increasingly choosing to be independent," Kasriel says. "These combined trends are putting pressure on businesses to evolve their hiring strategies. The job market is making it challenging to attract top talent ... and at the same time, the most talented professionals may never take traditional jobs because they value their independence."

As a result of these changing dynamics, businesses are looking beyond traditional hiring approaches and embracing more flexible teams to support their needs and fill skills gaps.

"As technology further enables new ways of work and freelancing continues to grow, businesses will restructure their workforces in favor of more agile, flexible teams," Kasriel adds.

Can't Get No Satisfaction

Nearly half of companies used some form of flexible workers in 2016, and 9 out of 10 hiring managers reported more satisfaction with the skills of the freelancers they hired than with the skills of their most recent full-time hire, according to the Upwork study.

"When it comes down to comparing the performance of freelancers versus employees, it's really apples to oranges," Kasriel says. "Freelancers empower businesses to scale quickly and gain access to specialized skills they don't have in house. As a result, freelancers are able to make a bigger impact faster, which leads to greater client satisfaction. Once companies see the impact freelancers have on their business, they're inclined to want to hire more."

The data supports Kasriel's conclusion: 55 percent of respondents who used freelancers last year expect to increase their usage in 2017. Still, hiring managers prefer standard employees in some cases for a number of reasons.

"For hiring managers, the success of a new hire comes down to their ability to perform their job and their work ethic, not location and ability to meet in person," Kasriel says. "Skills are what truly matter. The reason companies make hires in the first place is to get work done."

Many hiring managers worry that freelancers are less accountable than traditional employees or that they won't interact well with team members. According to Kasriel, however, most companies that have worked with freelancers before see this common concern for what it is: a total misconception.

"Employees are smart hires to make when a generalist is needed long term, but when it really comes to getting work done that requires specific skills, freelancers are invaluable – especially when that work needs to happen fast," Kasriel says.

If you're wondering whether you should hire a few freelancers or bring in more staff, it's important to remember what Kasriel said: comparing the two is a matter of apples and oranges. Operating fully with nothing but freelancers is impractical, but keeping every staff member up to date on all of the latest trends and technologies is also difficult. Upwork's survey data suggests that the best answer is usually a solid mixture of both.