The New Free Agent Nation

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While rarely a star on the field, the utility player is an essential member of any baseball team. Able to play multiple positions, the best utility players provide teams with depth and flexibility on the diamond — which often translates to a much-needed edge over the competition when a game is on the line.

In 2015, baseball teams aren’t the only organizations looking to have a deep bench of flexible talent. At an increasing rate, companies are collecting the names of talented freelancers who make up the ever-growing population of the workforce.

“Businesses are adopting a freelance work model in order to effectively share talent across the enterprise, filling gaps in supply or spikes in demand for specialized talent,” said Lauren Schulte, director of enterprise marketing for online freelancer community Elance-oDesk Inc. “By creating a bench of talented freelancers, businesses are able to close skill gaps faster by going direct-to-talent instead of through traditional channels, such as agencies, recruiters or full-time employees.”

One of the first mentions of the term “The Free Agent Nation” came by way of a now-famous 1997 Fast Company article by business author Dan Pink, who later expanded the concept into a book, “The Free Agent Nation: The Future of Working for Yourself,” published in 2001.

The book explored the rise of the freelancer in the business world, predicting that the nation of freelancers would continue to grow. So far, the prediction has been spot on.

In 1997, there were roughly 25 million free agents in the United States, whichrepresented about 16 percent of the country’s workforce, according to U.S. government data. Since, that number has more than doubled to 53 million Americans, according to a 2014 study by research firm Edelman Berland.

The notion of the free agent worker has not only changed the way people think about work. It has altered the employer-employee social contract.

“For generations, our culture has valued long-term, full-time employment,” Schulte said. “There was a time when it was a point of pride to work for a single company for a lifetime. These days are behind us.The average tenure of a job in the U.S. is 4.6 years. Pensions and retirement plans are a thing of the past.”

Tenure times, while decreasing, vary depending on age. Median employee tenure is generally higher among older workers. According to the U.S. Bureau of Labor Statistics, the median tenure of workers aged 55 to 64 is about 10½ years — more than three times that of workers aged 25 to 34 years, who tend to stick around for an average of three years.

Furthermore, among workers aged 60 to 64, 58 percent were employed for at least 10 years with their current employer in January 2014, compared with only 12 percent of those ages 30 to 34, government data showed.

To Teresa Carroll, special vice president and head of KellyOCG, a Kelly Services Inc. outsourcing and consulting group, these findings are not surprising.

“I’m a Gen Xer, and I sat there listening to my parents tell me, ‘Go find a good job with a company because it’ll afford you good benefits and you can work there for 30 years.’ That’s not what parents are telling their kids anymore,” Carroll said.

Embracing the Shift

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Specifically, Carroll calls this a “psychographic shift.” “If you have a high-demand skill set that’s in short supply, you have more options around how you want to work,” Carroll said.

Moreover, the workforce is increasingly made up of millennials, those born roughly between 1980 and 2000. This generation, now predicted to make up more than half of the workforce by 2020, got its first taste of the job market during 2009’s economic turmoil, when the job market was at a notable low.

“They quickly realized that the only secure job they could find would be the one they provided for themselves,” Schulte said.

Given Generation Y’s desire for flexibility at work, it’s easy to imagine a workforce increasingly made up of freelancers. Elance-oDesk predicts the workforce could be half freelance by 2020.

In the same way the economic turmoil brought as a result of the caused people to think differently about work, it also influenced businesses to seek new work models to protect themselves againstfuture downturns.

Many companies began building hybrid models composed of both full-time, core employees and a flexible workforce of freelancers. This hybrid model became an integral part of many company strategies, because it allowed organizations to scale their workforce up and down to meet demand.

“Companies are realizing there are options for how to get work done,” Carroll said. “And they’re realizing that more people wanting to work flexibly could afford them higher quality workers than a traditional full-time workforce.”

Although the wounds of the financial crisis may still be fresh, it has not had as important an influence on the growth of the free agent nation as technology. In fact, the increase in the freelance workforce would be nonexistent if advancements in technology never reached current levels, some experts say.

“Technology enables businesses to remove market inefficiencies by connecting supply and demand in real time,” Schulte said. “The technology-driven ‘match’ is what’s enabled the growth of every business in the ‘sharing economy.’”

Technology has also brought about many affordable workplace communication and collaboration tools, such as Google Hangout, Skype and Slack. These tools allow people to work efficiently with people in varying locations around the world. “More and more work is project-based, and there’s less of a requirement to be geographically bound to a single location,” Carroll said.  

By digitally connecting business and talent, demand for skill and ability increasingly drives work instead of the demand for physical proximity. “This is where we believe the true economic impact lies,” Schulte said. “We are moving toward a global meritocracy where the dynamics of a person’s local economy play a less important role in individual prosperity.”

With a workforce that isn’t bound to a specific location, businesses are likely to seek managers with the skills to handle a globally dispersed workforce. Elance-oDesk expects freelance management — people who manage and distribute freelancers — will become a core skill. Companies looking to stay competitive will likely find new approaches to attracting the top freelance labor available.

“To find and work with the best talent, companies must modernize their contingent workforce program to add the systems and processes that provide efficient access to great freelance talent, a user experience that makes it easy for the freelancer to work with the organization, and the controls and compliance that HR and procurement leaders require,” Schulte said. 

One way to get the best talent is to tap into job boards for distinct talent communities.

 “The pixie dust for recruiters is to find the niche talent communities that their clients want,” Carroll said. “Recruiters now are realizing they have to go in new directions to find them. … All this means for the recruiter is that they have to broaden their perspective on who they’re going to source from.”