The world’s labor markets are changing. Across the world, the supply of freelancers and the demand for them increases. As most people know, the freelancing business is exploding in America. It might though come as a surprise that the freelancing business is on the rise in Europe.
Everything suggests that freelancing has come to stay. Within just five years, it is even expected to be “the new normal” in America. In other words, there will be more freelancers, of some kind, than regular workers in the US. Read more about The rapid development of freelancers here.
We are still extremely far from that in Europe, but the question is if it is only a matter of time. According to Future working, a growing number of Europeans prefer self-employment to full-time employment. In addition, more people see freelancing as a viable and profitable choice of working (30 %).
Data from the last decade also shows that the number of independent professionals has grown faster within every major work sector compared to the total number of employed people.
If these trends continue, the world’s labor market will change dramatically. Our entire worldview of working will change. In fact, in 25 years from now, we are likely to live in a society with an unrecognizable labour market compared to how we know it today.
So what changes can we expect to see the next 25 years?
1. More jobs, fewer full-time jobs and less security
With an increasing demand for freelancers, there is going to be a high increase in short terms jobs. A result of this will though be fewer full-time positions.
More jobs will make it easier to find a job, nevertheless harder to find a steady and reliable source of income. It is no doubt easier to find a full-time job now that it will be in the future. It should, however, encourage people to go freelancing, or start up small businesses.
However, it will be important to remember that as a freelancer you usually have multiple clients. This also means that you don’t risk losing all of your income from one day to another. Lossing a client is not the same as being fired from you job because one client is just one source of income.
2. Work portfolios instead of work experience
Work experience is probably the most important aspect of any CV today. It is usually the first thing that employers look at. But in the future, this will be different.
Employers will instead start to look at work portfolios. A portfolio of assignments will be what is known as experience today. Candidates experience will be made up of a vast amount of projects from a variety of small and big companies
Experience will not come from a long employment history in a few firms. A normal employee with 10 years of experience from one company, 5 years in a second company and 10 years in a third company is going to be a thing of the past.
3. Increase of small businesses
We will no doubt experience a boom of small businesses. This boom will come as a direct result of the increase of freelancers. Skilled freelancers will experience workloads beyond their capacity. Therefore, they will move on from being independent freelancers to become small business owners with a few employees. Or they will start to hire in freelancers themselves to scale their business.
In fact, 37,5 % of American freelancers expect to create a new business in next few years. Almost 25 % considers to become a self-employed freelancer whereas only 8,1 % of freelancers considers going back to their regular 9-5 job (truelancer.com).
With a growing number of small businesses, these will become an increasingly large part of the economy. They will be a valuable resource for both larger companies and freelancers.
Large companies are going to use these small businesses as freelance resources. On the other hand, the small businesses will hire in other freelancers to scale their business. This way be able to take on larger projects than their own capacity allows.
4. Higher wages
Freelancers earn more money on average than regular full-time employees do. Check out how much a freelancer earn in this article.
With a rise of freelancers, the wages will therefore increase. This will happen for the simple reason that freelancers must earn higher salaries than regular employees, as freelancers have much higher costs to cover.
However, employers will not regard the high wages of freelancers as too high. They will be happy to pay more for freelancers. Companies will realise that by hiring freelancers, they can limit other significant costs. Today, significant fringe benefits and overhead costs are connected with full-time employees, but not associated with freelancers.
5. Opportunities to help freelancers and manage them
Entrepreneurs in the US have already realized that there is a huge market for those who want to help freelancers and make their life easier. Tools that helps freelancers balance and control their freelance life will therefore become increasingly popular.
The life as a freelancer may be nice, but it is also difficult. Freelancers have to manage a variety of tasks and basically have the role of an octopus. Therefore, there will no doubt be great opportunities to serve these freelancers.
Also, there will be great opportunities for those who manage to help small business deal with freelancers. Services or platforms that make it easier for small companies will also be popular. They will need intermediaries to put them in contact with freelancers in no time. This way enabling them to tap into the world of talent and scale their business from day to day.
Large enterprises will also need help to manage the thousands of freelancers they might be using a year. Freelancer Management systems already exist in the US. But we can no doubt expect great developments within this area.
This blog post was created with inspiration from a new American report published by the Kauffman Foundation and the Roosevelt Institute, where leading experts from a variety of industries speculate about the future.