The number of freelancers in the U.S. is expected to rise from roughly 57 million in 2019 to 86.5 million by 2027, according to Statista, which specializes in market and consumer data. That represents an increase from 36% to more than half—50.9%—of the total U.S. workforce within the next six years.
Although freelancers or gig workers are among the fastest-growing segment of the American workforce, they’re often hidden on spreadsheets and not tracked or properly managed, says Shahar Erez, CEO of Stoke Talent, which provides a flexible workforce management platform.
“Almost every organization we talk to has no idea how many freelancers they have working for them,” he says. “The reason is because freelancers work in the shadows. They slip between hiring managers, the finance team, the HR team, the procurement team. Companies lack control over them.”
Erez says HR professionals need to set expectations for those who oversee freelancers. That involves retraining leaders and internal teams on how to work with gig workers, humanize their experience, source them, assign tasks, recognize or reward those who excel and let them go when things don’t work out.
However, some organizations unintentionally blur the lines between freelancers and employees, which can be a costly mistake. By treating them the same, they may give them performance reviews when they should instead be delivering constructive feedback, for example. He also points to HR professionals who manage freelancers in their HR system, which can result in breached classifications and federal penalties.
He says freelancers should be tracked in a designated system monitored by project managers or others who directly supervise them. Likewise, the entire process of working with freelancers, ranging from onboarding to payments, needs to be automated and streamlined, which will also help create a more positive and consumer-grade experience for gig workers.
Erez tells the recent story of a vice president of HR who had no idea how many freelancers her employer supported. She believed they were the responsibility of finance, not HR.
Not really. He explains that freelancers may already be a significant portion of your workforce, which can represent a huge opportunity for HR and strategic challenges for an organization. This would require HR to develop effective ways to evaluate and leverage freelancers, as well as offer them operational support and keep them happy so they will continue working for your company.
“Prepare your organization for this change,” Erez says, adding that the future of work—populated largely by freelancers and gig workers—is happening now. “Recognize this opportunity and empower your organization with processes and toolsets to be able to grow [and manage] your flexible workforce.”