The workforce as we know it has changed permanently. If economic conditions weren't enough to discourage bringing on full-time employees, the Affordable Healthcare Act (ACA) certainly is.
The way the ACA is applied discourages companies from ever exceeding 50 employees. The result is a strong incentive to outsource to freelancers and agencies, which is driving strong growth in freelance demand.
According to Due.com's new Freelancing Guide, "There are approximately 53 million freelancers in the U.S. contributing $715 billion in earnings to the national economy."
Companies and workers alike can benefit from reviewing that guide to better understand how the workplace is changing and how the new workforce operates.
Why not take advantage of downsized corporate employees with vast experience and early adopters who have digital, technical, and social media skills your organization may lack?
How Freelance Differs From Corporate Employment
Employees displaced from corporate work may find this new economic model a real shock. Where the corporate world values college degrees, many top contractors chose not to stay in college, opting instead for business experience.
While most journalists have college degrees, top writers and social media managers often do not. Even business strategists may or may not have obtained business degrees if they have sufficient management experience.
There are opportunities best suited for college-educated freelancers. More traditional fields including medicine, law, and accounting still require college degrees and industry certifications. The highly educated should also consider focusing on international opportunities.
Upper-Level Training Key to Reaching International Audiences
As more small businesses expand globally, they require specialized skills such as those trained through obtaining a Masters in Strategic Communications. Businesses new to international expansion should seek experience first, and then advanced education.
While many businesses have been highly successful through expansion into other countries, there are many major mistakes entrepreneurs must avoid when going global. Cultural differences and business environments can be significant.
China is of particular interest due to their large market. Hiring consultants familiar with operating in Asia is essential as is obtaining legal advice. Do your research starting with these 5 Key Factors Companies Should Consider When Establishing Operations in China.
Avoid Misclassifying Employees
When expanding through the use of consultants or freelancers, companies must be prepared to give up some control. Treating them as though they are employees can result in a business being charged with worker misclassification and may lead to ACA penalties.
Avoid expensive legal and tax issues and costly penalties by ensuring you do not misclassify employees. Determining whether someone is an independent contractor versus an employee can be a minefield for employers, so get legal and accounting advice.
Do not expect to dictate where, when, or how freelancers will perform work for your company. While many businesses can find this lack of control difficult to accept, failure to permit this freedom can eliminate the benefits and have your contractors and freelancers declared employees.
To be safe, non-employees should be hired for specific projects over a designated period of time. Unless the project is short term in nature, they will typically have clients other than your company.
Future Without Hiring Employees
BuzzFeed reported that Intuit and Emergent estimate that 40 percent of the U.S. workforce will be freelancers by 2020. Eighty percent of people surveyed indicated they were interested in doing freelance work on the side.
Any business can benefit from tapping the time and experience of people beyond their usual workforce. See 7 Types of Freelancers That Can Benefit Any Business for ideas.
As with all things in life, there are Pros and Cons of Hiring a Freelancer. But with the current economy, operating entirely with employees is likely to make remaining competitive a challenge.
