In the labor market, companies are struggling to recruit and retain employees. In 2021, the layoff rate began to rise, especially in technology and health care.
Why is there an outflow? People are used to working from home and are realizing that working for themselves as a freelancer is ideal for them.
Companies are helping these employees by doing it by themselves. The percentage of companies that use hiring people through freelance platforms has increased from 5% in 2015 to 47% in 2020. A paradigm shift in the labor market is taking place around the world.
A report from the World Economic Forum indicated that the future of the labor market is to accelerate the adoption of new technologies. However, the transition to automation of systems has shown a growing shortage of skills in artificial intelligence, encryption, big data processing, the Internet of Things, and robotics. Having trouble with finding candidates, companies are expanding the field of contractors to hire on freelance platforms.
In 2020, 36% of employees in the U.S. reported freelancing as their full-time job, up from 28% in 2019. In 2020, freelance revenues rose 22% to $1.2 trillion. According to Upwork research, one in four Americans will work remotely in 2021 and one in three by 2025. Statista expects the number of freelancers to grow to more than 50% of the total U.S. workforce by 2027.
In recent years, more and more digital work has moved to Asia. While the demand for work through digital platforms tends to come from the U.S., most of the work is being done in low- and middle-income countries. This trend will continue as services are increasingly subdivided into smaller tasks. For example, the Online Labor Index (OLI) tracks how standard employment is increasingly being supplemented and replaced by temporary work through digital platforms. The use of digital labor has increased 63% since May 2016, when systematic data collection began.
According to the iLabour Project and Oxford Internet Institute, more than 70% of online work as of April 2021 is done in Asia, where most “virtual migrants” do software development and creative work. India, Pakistan and Bangladesh are the most common geographic locations for freelance work.
Freelance hiring in India is up 22% year-over-year in January 2021. The top five highest-paying freelance jobs in India were PHP developer, recruiter, business development executive, content writer and digital marketer.
The pandemic was a catalyst for increased demand for freelance work, satisfying two requests at once-an earning opportunity for people who lost their jobs because of the pandemic, and a reduction in staffing costs for companies.
This has been an exceptional year for both businesses and employees around the world. While the pandemic has accelerated the shift in the marketplace toward freelancing, it won’t slow down when the vaccination is over. The question is when today’s companies will understand where the workforce is headed and make the necessary changes to adapt to the new rules of the game by using freelancers to build their businesses.
