The quickening pace of economic development as well as a growing diversity of business models and product ideas all call for a new kind of workforce.

This is part of a new series about global megatrends. Please read the introductory post.

Once upon a time, millions of people got up in the morning to brush their teeth, put on a blue or white collar, and go to work in factories and offices. It was common for an employee to stay with their employers for many years. Most people worked for the same company until they retired. Big companies were a safe haven. The work world was a stable and predictable place.

Not anymore.

RATIONALE

The traditional employment model is falling apart. Instead of a single career with a single company lasting from graduation to retirement, employees are increasingly on the move. For example, the U.S. Bureau of Labor Statistics reports that people born between 1957 and 1964 held, on average, 11 jobs from ages 18 to 44. That’s roughly one new job every 2.4 years. In today’s world, 5 to 7 careers during a lifetime are becoming commonplace.

There are a number of reasons to explain this trend. In a globalized business world that has become addicted to fast technologies and agile business models, companies simply cannot provide lifetime employment anymore. In order to survive, businesses must continuously reinvent themselves to provide competitive products and services. The faithful worker has become the victim of this development, while the caring employer is but a distant memory.

Meanwhile, due to increased legal limitations from strict labor laws, the hiring and firing process is becoming risky and expensive. Global outsourcing of entire business processes to large service providers is one strategy to mitigate this problem; on-demand hiring of individual experts is another.

Specialized freelance workers – such as web designers, software developers, project managers, etc. – offer what our increasingly short-sighted business world demands: a group of educated, self-motivated and highly-skilled mobile experts.

The good news is that this new situation is frequently a fair deal. While freelancers are easy to hire and to fire, they tend to be better paid than their traditional employee counterparts. They also enjoy the independence and flexibility that come from acting as individual entrepreneurs. While workforce globalization tends to depress local wages, highly-skilled experts can achieve good rates worldwide.

A huge market for freelancers has already developed. According to an Aberdeen Group report, about 26% of the workforce in the United States is contingent or contract-based. The contingent workforce has become a worldwide phenomenon and is expected to accelerate.

CONSEQUENCES

Individuals:

A different education profile is required for a freelance career. In addition to hard skills, freelancing requires selling and marketing abilities. Finding new clients is the number one challenge for every freelancer. Remaining visible to potential clients worldwide requires skill as an online marketer, website designer, and social network guru. Negotiating skills are also a necessity. All of these abilities must be acquired early on in a freelancer’s career.

To remain highly motivated, working in a field with passion is the only sustainable solution. Thus, education will have to be closely aligned with personal preferences and talents.

Continuous learning will become an important habit. Keeping up with rapidly changing industry trends must be an integral part of media consumption and social networking.

Freelance workers will increasingly face global competition. Thus, comprehensive English-language skills will become indispensable.

A different mindset is also required to endure the freelancer’s low level of job security. Instead of hoping to land a permanent position, confidence and the entrepreneurial spirit are vital to future success.

Traditional lobbies, consisting of welfare-oriented political parties and unions, will attempt to hinder the growing freelance trend. Bureaucratic rules and complicated tax codes, as well as strict audits and other limitations, will be imposed on freelancers in many countries. These already include “disguised employment” rules. Freelancers must be aware that they may suddenly find themselves in an existence-threatening legislative environment. Adjusting to dramatic changes may even include relocating to a different country.

Businesses:

Innovative companies will have to become project-oriented. Matrix organizations will be vigorously slimmed down. Middle management will suffer the most from this change.

Highly effective project management will become a top skill within an organization. The management style will change from corporate culture to a product-focused approach. This means successful organizations will focus on creating crystal-clear product visions instead of trying to maintain a feel-good factor with conventional employee perks and events.

For many projects, teams will consist of a mix of employees and freelancers. Managing these teams will be as important as it is challenging.

Finding the right talent on-demand will be crucial for successful operations. For that reason, the responsibility for hiring freelancers will be shifted from HR to technical teams with the necessary know-how to select the best-fitting team members.

Teams with a high share of freelance professionals are less likely to be collocated. The ability to develop, acquire, and implement efficient work distribution and collaboration (both tools and processes) will become essential success factors.

Since freelance experts will not be staying with their clients as long as an employee would, businesses will have to develop new knowledge-management strategies, such as development processes and improved information storage and management.

Due to the high turnover, it will be increasingly difficult to keep trade secrets a secret. Innovative ideas will become a globally available commodity. Thus, the ability to execute projects, especially systems development, with speed and quality will become more important than the ability to invent new products or develop new concepts.

Since freelancers have little time to look for new customers, there will be a growing need for agents who can bring freelancers and their clients together. This is already a quickly growing business model used by agencies and Internet platforms. However, for groups such as high-end experts, new kinds of highly specialized sales and marketing services will develop. These will likely include freelance agents and marketing-oriented professional associations.

CONCLUSIONS

There is little doubt that this global shift to freelancing will continue, radically altering the way we work and how business models operate. Businesses will undoubtedly benefit from this development, but so will be the experts, at least in the long run. While possible side-effects, such as declining job security, may cause social tensions, and though many may mourn the good-old corporate coziness, positive implications likely outweigh potential problems. For example, according to market research, the vast majority of employees are very unhappy with their jobs. Following their real passions, as well as gaining a sense of freedom and self-determination, makes professionals happier with their lives. A freelance-oriented economy is thus likely to produce generally happier societies.