Opinions expressed by Entrepreneur contributors are their very own.
Final fall, we polled startups on their views of the versatile workforce. We stored the questions open-ended to keep away from biasing the information set however anticipated a usually constructive sentiment.
What we discovered is that versatile expertise is not simply an alternate hiring technique. It’s a basic driver for profitability, development, and innovation. Startups persistently cited three core advantages:
- Entry new markets with no headquarters or full in-house crew
- Achieve executive-level experience in gross sales, product, operations, finance and advertising at a fraction of the price
- Scale effectively, investing solely when demand is validated
The advantages are clear, however are mature companies embracing this shift?
Latest information from contractor-of-record Mellow says completely. Their newest report exhibits a 260% improve in U.S. companies hiring freelancers from 2022 to 2024. Their report additionally exhibits the place U.S. companies are hiring freelancers, what abilities are in demand, and the broader implications for entrepreneurs, executives and enterprise homeowners.
Associated: Why Facet Hustles Are Reshaping Careers within the Way forward for Work
Freelance did not simply survive, it thrived by way of two troublesome years
The previous two years have been difficult. Waves of layoffs, rising inflation and widespread hiring freezes. If the versatile workforce have been a fad, it could have pale away like different short-lived enterprise fads. NFTs, quiet quitting and the good resignation — ring a bell?
As a substitute, firms are doubling down on their versatile workforce. Resume Builder confirmed that 40% of firms have been hiring contractors to switch laid-off employees, whereas 53% moved full-time employees to contract positions in 2023. Mellow’s information exhibits this pattern continued into 2024.
Later on this article, I am going to clarify why freelancers aren’t only a short-term repair however as a substitute a strategic benefit in right this moment’s layoff-prone surroundings.
Associated: Why Good Individuals Are Actually Quitting (and The right way to Preserve Them)
Firms are hiring extra freelancers
Firms averaged hiring 15 freelancers on this two-year span, making up 8% of their complete workforce.
8% is critical. The freelance financial system remains to be comparatively younger. Though Grand View Companions estimates that world freelance platforms have a 17.7% CAGR for 2025 to 2030, freelancers usually make up lower than 1% of an organization’s workforce. Freelancers are generally hidden and coded as short-term employees, part-time consultants or vendor names to keep away from confusion or pink flags.
Sure industries are main the way in which and supply a blueprint that others can comply with. Edtech firms averaged 108 freelancers, whereas promoting firms averaged 34 contractors. The analysis stories that “it wasn’t uncommon to seek out extra freelancers than full time workers.”
Will Edtech and promoting sign what’s in retailer for different industries?
A Rising tide lifts all boats (geographically)
Each freelancer employed in Mellow’s information was based mostly exterior the U.S.
For many Individuals, this in all probability appears alarming, feeling eerily much like the gutting of the Rust Belt in manufacturing.
However that is only a portion of the story. Mellow is a contractor-of-record for U.S. firms hiring from rising areas. And after we take a look at the broader freelance information, we see the larger image. As a substitute of worry, we see freelance as a worldwide pattern, with versatile working fashions as a worldwide customary that Individuals can profit from reasonably than get replaced by.
Relatively than changing U.S. employees, the shift to versatile work fashions is creating new alternatives for each companies and people.
This turns into obvious whenever you take a look at latest information.
- Main freelancer finance platform Collective exhibits an 8.27% YoY improve in income for U.S. solopreneurs from 2023 to 2024.
- MBO Companions confirmed a 103.6% improve in U.S. full-time impartial employees from 2020 to 2024 and a 56.6% improve in U.S. independents making over $100,000 USD.
- MBO additionally confirmed a 5.45% larger CAGR for the U.S. impartial workforce in comparison with conventional employment. Evaluate this to full-time stats, and the distinction is clear.
Freelance is not about offshoring; it is about decentralizing work and enabling companies to be extra agile.
Associated: How Versatile Expertise Is Reworking Consulting
Hiring in Jap Europe is hovering whereas Western Europe declines
The most important winner was Jap Europe. There was a 106% improve in North American Firms hiring from Poland, Romania and Hungary. When you’ve observed your entrepreneurial mates reserving flights to Poland to go to their growth crew, because of this.
In keeping with Alex Norovyatkin, Head of Development for Mellow, “As you’ll be able to see, an increasing number of firms are hiring Jap European contractors. There’s a excellent steadiness of workforce value and abilities. This inhabitants actually needs to work for U.S. firms.”
Different key insights from Mellow’s information:
- MENA noticed a 60% improve in hiring from North American firms
- Asia skilled a 39% improve
- Freelancer hiring within the EU dropped by 40%. Norovyatkin cited strict contractor laws as a motive for the drop.
Return-to-office (RTO) and layoffs will probably improve the freelance workforce
2025 presents an fascinating set of challenges for the freelance workforce. A latest Washington Put up headline states, “Layoffs hit contractors,” in reference to the U.S. Authorities. Layoffs additionally occurred throughout Salesforce, Workday and Walmart this 12 months.
In the meantime, main companies like Dell, Amazon, and JPMorgan are imposing strict RTO mandates.
In each circumstances, I predict hiring freelancers will improve.
Relating to layoffs, alongside the Resume Builder information above, freelancers are uniquely positioned to reach a layoff-prone surroundings since they’re usually embedded inside groups, 30 to 60% cheaper than comparable exterior expertise options, and have fewer strings connected, enabling leaders to scale down reasonably than lay off.
Relating to RTO mandates, freelance is not solely distant. The truth is, in-person freelance fashions are a fast-growing section. Spurred by front-line workforce expertise platforms specialised in retail, hospitality, and even manufacturing unit employees, in-person freelance fashions are fixing large challenges for a historically excessive churn, excessive burnout, and high-cost workforce.
AI accelerates the necessity for fractional expertise
Gen AI drives demand for fractional AI experience alongside complementary roles akin to internet design and analysis evaluation. Mellow’s information signifies a 130% improve in freelance internet developer hiring, a 52% improve in programmers, a 50% improve in analysts, and a 28% improve in designers.
AI can also be pushing the shift from role-based hiring to skills-based hiring, and expertise platforms are perfect for this. Expertise Platforms are to recruiting what Uber was to taxi’s. As a substitute of prolonged resumes and armies of recruiters, expertise platforms use tagging, digital networks, and human-in-the-loop recruiters to match actual ability units with the hiring supervisor’s actual wants. On common, discovering the proper candidate in 2 to five days, at 30-60% value financial savings, with expectations met greater than 90% of the time.
In each circumstances, the impression is that reasonably than sustaining a big, bureaucratic, full time core, firms can function with a lean crew of full-time workers supported by an in depth freelance community.
Embrace freelance to keep away from disruption
Expertise is not simply an HR technique, it is a core enterprise technique that enterprise homeowners, entrepreneurs, and executives should embrace.
The information makes it clear that firms are already embracing versatile work, and the shift is not nearly value financial savings; it is about responding to digital advances like Agentic AI.
However what if that is not you? What in case you’re an entrepreneur who sticks with a full-time mindset?
Sadly, time is not in your facet, and in contrast to technological advances earlier than, being late does not imply decrease costs; it means being locked out from the perfect expertise. Opposite to the parable of freelancers bouncing from one shopper to the subsequent, freelancers stick to two to 5 purchasers they like, adjusting their workload based mostly on demand. Which means that whereas there’s an abundance of freelancers right this moment, there is likely to be a scarcity tomorrow, and when that scarcity comes, you will be locked out. And information exhibits that this scarcity would possibly come prior to you assume.
Have you ever heard Ernest Hemingway’s well-known quote in The Solar Additionally Rises? When Invoice was requested how we went bankrupt, he replied, “Two methods. Steadily, then abruptly.“
Do not be Invoice. You have had two years to take gradual steps. Now we’re within the “abruptly,” and firms with no versatile workforce are simply ready for developments like DeepSeek, macro-economic occasions like tariffs, or one thing as random as a competitor product that will get the TikTok algorithm proper to be disrupted.
When you’re an entrepreneur, you are in a fortunate place. Relatively than worrying about structural change and pink tape, you’ll be able to disrupt “abruptly” by embracing a small full-time core with a big community of freelancers to unlock agility, flexibility, and scalability whenever you discover that hit.
