Highlighting the Trends and Realities of Contract Work.
The pivot from traditional work roles to independent contracting has become a defining trend, but the reasons why people seek contract work continue to evolve. As we enter the second half of 2024, direct selling companies should understand these reasons to better communicate to potential field distributors. We’ll dive into the state and direction of independent contract work, emphasizing key statistics and facts that shape this evolving terrain.
Larger Variety of Independent Contracting
The gig economy’s expansion has heralded a more flexible and autonomous workforce. Independent contractors, freelancers and consultants now permeate various sectors, from tech and creative industries to conventional fields like construction and education. Notably, recent federal data underscores this trend’s magnitude: nearly 8.4 million Americans held multiple jobs in October 2023, representing 5.2 percent of the workforce, the highest share since January 2020.
Technological Advancements Driving Freelancing
Technology stands as a primary catalyst in the rise of independent contractors. Digital platforms facilitate global connections between workers and potential employers, streamlining the search for projects aligned with skills and interests. From project management to creative platforms to communication channels, there’s never been a more opportune time to facilitate nearly all areas of work remotely. A University of Virginia economist highlights the correlation: since the pandemic’s onset, workers with remote-compatible occupations holding multiple jobs have surpassed pre-COVID levels, suggesting an expanding reliance on freelancing.
Desire for Work-Life Balance
The quest for work-life equilibrium propels many toward independent contracting. With 5.9 percent of women and 4.7 percent of men juggling multiple jobs by last October, the appeal of flexible schedules and environments is evident. Millennials and Gen Z workers, in particular, seek autonomy and fulfillment, contributing to the surge: an estimated 59 million Americans embraced independent contracting by 2020, collectively earning approximately $1.2 trillion.
Contractors See More Meaningful Work
Independent contracting offers professionals the autonomy to select opportunities resonating with their skills and values. Research from Payroll reinforces this with 80 percent of independent contractors saying they are very or somewhat satisfied with their work situation, surpassing the national rate among traditional employees by a significant margin. The quest for purposeful endeavors parallels the ability to choose the type of work contractors want to do.
Navigating Regulatory Frameworks
In response to evolving dynamics, legislative changes have emerged. New York’s Freelance Isn’t Free Act, effective May 2024, mandates written contracts for service agreements exceeding $800. Such initiatives reflect a broader push for fair treatment and equitable working conditions, amidst a backdrop of growing gig economy influence. Regulations and pushes from the US Labor Department could require businesses that currently classify workers as independent contractors to pay them as employees. The stated goal is to broaden the definition of “employee” to ensure more workers receive benefits like overtime pay. Opponents say it could limit contract opportunities.
Embracing Independent Contracting Strategically
Even companies outside of the direct selling industry wield independent contracting as a strategic tool, capitalizing on flexibility, specialized skills and cost efficiencies. Clear, comprehensive contracts define expectations, avoiding risks of misclassification and fostering positive collaborations. According to a 2023 ResumeBuilder.com survey, 80 percent of companies hiring contract workers after layoffs say contractors will do work that had been done by those employees. Fifty-three companies surveyed say they have asked full-time employees to move to a contract position. So, not only are workers seeking more contract work, companies are also realizing the benefits of this option.
Challenges Amidst the Freelance Boom
Despite its allure, independent contracting presents challenges. Multiple states continue to change laws and requirements. Many people adding contract work to their schedules tend to not have experience understanding and dealing with expenses and tax implications. Some companies are providing training and resources to educate their contract workers in efforts to ease concerns and hesitations for taking on this type of work.
From the July/August 2024 issue of Direct Selling News magazine.
