Discover insights for freelancers entering the gig economy space amid the Great Resignation.
You see the signs everywhere you go. In some businesses, the labor shortage is so significant that it impacts business operations. For example, some restaurants are open on certain days or open later/close earlier because they lack the staff to run at full capacity.
The past two years have not been kind to the labor market. As COVID-19 swept across the U.S. in early 2020, all industries felt the impact as lockdowns caused office closures, jumpstarted work from home initiatives, and resulted in nationwide supply line disruptions. Many service-industry businesses remained closed for several months. The result was an April 2020 U.S. unemployment rate of 14.8%, the highest since data collection began in 1948.
However, leap ahead a year and a half, and while down considerably from the lockdown highs, the unemployment rate remains above pre-COVID-19 levels. However, millions of jobs remain open, and workers are quitting jobs in record numbers. According to CNBC, “55% of Americans anticipate looking for a new job before the end of the year. 73% of them cite the ability to work remotely and gain more flexibility as a reason why.”
“COVID forced many businesses to move online – when they didn’t necessarily want to – and enabled many employees to work virtually for the first time,” said Elizabeth Eiss, Founder and CEO of the talent curation and freelance recruiting platform ResultsResourcing. “The extended pandemic period enabled workers to form new habits, people moved further away from offices, and many discovered a work/life balance that favored ‘life’ over ‘work.’ Now, workers are questioning ‘going back’ to the old ways.
“Companies are finding that fewer people are willing to commute to offices to work full-time. As we’re seeing, it is especially hard on businesses that are dependent on physical locations, such as hotels, construction, healthcare, and restaurants.”
In addition, some industries are losing workers for another reason: burnout. There’s a domino effect to the Great Resignation because, as collegues leave and those positions remain unfilled, the strain is greater for the workers who remain.
So, as people quit and jobs remain open, where are all these workers going?
According to a study by Upwork, 20% of Americans looking for work are considering freelancing. These findings corollate with the MBO Partners 2021 State of Independence research that found the number of independent workers (freelancers, independent contractors, gig workers, etc.) rose to 51.1 million in 2021, a 34% increase from 2020. The number of full-time independent workers increased by 25% (an enormous rise by labor market standards), while the number of part-time independent workers increased 51%.
“The notion of independent work is very alluring,” said Eiss. “You’re your own boss; you set your own hours; your commute is a few steps out of your bedroom. Plus, it is easier than ever for workers to turn to freelancing because there’s an infrastructure in place that wasn’t there before COVID.
“However, entrepreneurship is hard. A shift to contracting isn’t the same as working a full-time job remotely – you’re now running a business yourself. People are accustomed to an employer’s steady, organized demand for their services, support of other employee experts, as well as office supplies, marketing, technical tools or IT assistance. Medical insurance, and retirement programs are yet other factors.”
Before moving to full-time or part-time freelancing, start a business plan by addressing these questions:
Full-time work is structured to take advantage of employees’ strengths while minimizing their weaknesses. For example, a copywriter writes the text for an infographic, a graphic artist designs it, and a fact-checker verifies it. For freelancers, that support structure is missing unless they build it.
“Freelancers can team up to expand their combined value proposition. This approach allows each contractor to do what they love – and what they do best – while collaborating on business development and other functions,” said Eiss.
One of the most efficient ways for freelancers to find work is through an online job platform. There are hundreds of job platforms that cater to contract workers. To identify the right platform, freelancers should look for ones that specialize in their field, review the value of the work available through the site, fees and limitations, and determine what metrics the platform uses to measure success (i.e., how many jobs are awarded, average value of a job, etc.).
"For example, at ResultsResourcing, our clients hire us to find, vet, and match them with skilled freelancers," said Eiss. “They are actively invested in our talent curation service. The jobs we offer tend to be long-term and pay well, and job seekers can propose on every job that matches their skillsets.
“Also, we don’t rely strictly on algorithms. We have humans who help! Our recruiters go beyond resumes to find the best matches and do a video interview with those candidates. The top qualifiers then interview with the client. ResultsResourcing merges tried-and-true traditional staffing approaches with everything great about online job board platforms to best-match client jobs with talented freelance professionals.”
“Full-time independent work is not for everyone," said Eiss. “Many people entering the contracting market will find it challenging and may decide that traditional work models are a better trade-off. Others will succeed to a point but may struggle to replace their full-time compensation package.”
“The most successful contractors have an entrepreneurial or business mindset and the resilience and discipline to build a profitable, sustainable business. Those who provide services in keeping with market needs and who can create real value in their customers' eyes will succeed as freelancers.”
The Great Resignation has created more opportunities for freelancers and businesses alike. If you’re a contract professional and understand the value you deliver, we want to help you succeed. Register for ResultsResourcing, and discover how our platform can assist you in achieving your goals. If you’re a business that is ready to take advantage of the influx of skilled, quality talent entering the freelance space, visit our page to learn more about our vetting process or schedule your free consultation today!
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