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The word flexibility is now unfailingly associated with remote and hybrid working when really it means so much more when it comes to employment. Whether removing the commute, more family time, or greater control over working hours, boils down to independence. Pandemic restrictions gave the working population a taste of this independence. But the trend has evolved, and workers are now taking flexibility a step further by embracing freelance careers.
The record number of UK vacancies is indicative of a significant talent gap. When weighing this up alongside the rising unemployment rate, this naturally poses a question: where are all these potential employees going? Many are looking for employers that align with their values – with a particular focus on working from anywhere they like. But there’s an untold story there: a growing proportion of these people are going freelance.
Even before the pandemic, Payoneer’s Global Gig Economy Index found that the UK had the second fastest growing freelancer market, behind only the US. Since then, further research has shown that huge swathes of staff, often from the tech industry, are leaving permanent jobs in search of careers that will provide greater independence.
In fact, 11.2 per cent of software developers were freelancing in 2021, up from 9.5 per cent in 2020. In most cases, this means a full shift from permanent to self-employment. Yet as the cost-of-living crisis continues to bite, more and more professionals are seeking side jobs to supplement full-time work – going freelance in their spare time.
How are businesses reacting? Many sectors – particularly the likes of technology and the creative industries – are well versed in using freelancers. Many have regulars they know well and use often. But such is the talent shortfall that the competition for skilled workers is extending into the freelance arena, with businesses now competing for the best temporary staff. This demand for skilled freelancers is reflected in the expansion of the freelance platform industry, which is expected to grow by 15.3 per cent by 2026.
On the one hand, this is a business opportunity. Particularly in turbulent economic periods, hiring freelancers can ease short-term demand and allow organizations to be more agile – hiring specific skills for specific projects, rather than spending time recruiting full-time employees and asking them to cover multiple bases as generalists.
On the other hand, integrating skilled freelancers into an existing workforce can be challenging. The rise of hybrid work means that businesses are already managing a dual workforce in one sense, so adding another cross-section of employees has the potential to complicate matters.
Organizations need to think strategically about how to get the best and brightest out there in the freelance pool. That might mean offering tailored benefits packages or establishing structured career development options. Ultimately, it’s about allaying the concerns that have, for so long, represented the drawbacks of freelance life.
The rush to self-employment is a strong theme among the skilled UK workforce right now, but the freedom synonymous with freelancing is good for businesses too. Primarily, it’s a sure-fire way to secure on-demand access to the skills they need. As the momentum behind freelancing gathers pace, businesses need to understand the drivers behind the growing proportion of the workforce seeking independent careers. Their ability to mitigate the impact of the skills shortage may well depend on it.