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The workforce has undergone seismic shifts in the past 4 years.
Spurred by the pandemic, the great resignation and immediate remote work adoption, the "freelance economy" has looked promising as the future workforce.
But then 2024 happened. Widespread layoffs replaced the great resignation. Return-to-office policies from Amazon to Dell replaced broad remote work acceptance. The combination of inflation with an uncertain economy strongly challenged employees' confidence that freelancing is safer than a full-time job.
The MBO Partners State of Independence 2024 report clearly shows that individuals, even amidst a trying economy, are overwhelmingly choosing independence over full-time employment. What does this mean for entrepreneurs and executives as they look to acquire their company's most important asset: people? Let's dive in.
Quick context: I'll be using "independence" and "freelance" interchangeably here. In this discussion, "freelance" refers specifically to the choice to work under a 1099 contract rather than in full-time W2 employment.
In a remote-first world, workers continue to choose independent freelancing over full-time
Individuals choosing full-time independent freelancing grew from 13.6 million in 2020 to 27.7 million in 2024, consistently growing year after year, whereas part-time or occasional independents declined in 2024. These findings are consistent with Deloitte's findings that 55% of workers already have or are likely to switch their method of work from full-time employment to freelance projects.
So, why are individuals staying freelance?
The data shows that working for themselves makes individuals happier, healthier and more secure. 84% of individuals say they are happier working independently, 79% say it's better for their health to work for themselves, and 65% say they feel more secure working independently. Further, the number of independents making over $100,000 grew by 2% from 2023 to 2024 – a combined 4.7 million Americans.
Freelancing is also becoming easier. Across the top challenges of predictable income, retirement, benefits and job security, all four have significantly reduced from 2012 to now. For example, 20% fewer independents cited retirement as a challenge today.
Related: The Rise of Self-Employed in the Global Workforce and What Business Owners Need to Know
Why entrepreneurs and executives need to embrace the independent workforce
An independent freelance workforce certainly challenges conventional wisdom around leadership, management and talent-related norms. For example, how HR, talent acquisition and external talent-related leadership have traditionally operated creates suboptimal conditions for a freelance workforce. But instead of focusing on the potential negative, the report highlights two massive benefits for every entrepreneur and executive.
The first is globalization.
You need a global footprint in today's economy. For example, the Q2 Airbnb earnings report asserts that "Latin America and Asia-Pacific continue to be our fastest-growing regions." Do you have a way to access these markets? The traditional method of a permanent entity and attracting full-time talent might be too slow or costly. Instead, there are over 435 million freelancers globally, according to the World Bank, and there is a relevant freelance talent platform in each region.
The second is embracing technology. Whether AI, blockchain or whatever new technology comes tomorrow, freelancers have a higher rate of upskilling and adoption than their full-time peers.
According to Deloitte data, freelancers have a higher rate of upskilling than full-time employees. 60% of freelancers updated their skills in the past 6 months, compared to 49% of traditional employees who have updated their skills in the past 12 months.
In MBO's report, 65% of independents in 2024 are using Gen AI in their workflow, a 28% increase from 2023. The business impact is also clear, as 95% of independents say AI makes them more competitive.
Related: How to Run a 6-Figure Freelance Business in 20 Hours a Week
How to get started
Like most aspects of business, what worked for your talent strategy over the past 75 years will likely not work for the next 5 years. Talent is being disrupted by both technology and individuals' expectations of work. MBO's State of Independence clearly shows that talent won't budge. Even amidst layoffs, remote work pushback and an uncertain economy, top talent will continue choosing to work independently.
The question for you becomes: How will you embrace the independent workforce?
A start is to find your first pool of relevant freelance talent.
How will you find the right freelance pool? LinkedIn is the first port of call. However, effectively scaling your freelance talent pools requires a strong partnership with a freelance talent platform. There are over 800 global talent platforms, increasingly specialized across skills, industries and regions and they're the experts in finding, organizing and mobilizing freelance talent.
The choice is yours. Do you want an increasing future workforce or a declining permanent workforce? Follow my channel to ensure you're ready for the future of work.
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