Are Freelancers the Future of Work?

by / ⠀Startup Advice / October 26, 2011

A recent article in MSN’s Business on Main discusses how small business are not hiring like they used and never will hire that way again because of freelancers. Freelancers have become an integral part of every business and provide businesses with talented help but with greatly reduced costs. It’s also easier than ever to work with freelancers because of the online tools that are available today to collaborate on projects from anywhere.

The article cites a recent report from the Kauffman Foundation suggests the job deficit is actually not recession-related. In fact, Kauffman’s study, “Starting Smaller; Staying Smaller: America’s Slow Leak in Job Creation,” shows that new employer businesses have declined 27 percent since 2006. However, when newly self-employed workers are added to the mix, the level of startups hasn’t declined, but instead has “held steady or even edged up since the recession.”

Is this the future?

“To put this in perspective, in the 1990s, new businesses opened their doors with about eight employees; today, that’s down to five. The culprit? The traditional business model doesn’t apply anymore, due to a number of factors, including technology and a globalized market.”

So is this trend here to stay and will we never see small businesses hire as aggressively as the old days?

Accoridng to the article “It seems likely. Swart (CEO of oDesk) predicts more people will choose freelancing as a career path, helping businesses create a balanced and blended workforce. (Blended workforces use both full-time and contingent workers.) Zaino (founder MBO Parnters) agrees: “The genie has left the bottle. The millennials saw their parents get fired and have a different mindset about work. We live in a ‘project economy.’” Rosati (CEO makes it unanimous, adding that [unemployed] baby boomers are also driving this “megatrend.”

“So are we doomed to little or no job growth? It would help if the U.S. Department of Labor counted each new freelance entrepreneur as representing a newly created job, but it doesn’t.”

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