Does the growing freelance trend mean traditional employment models are all but dead, and the future of work belongs to independent contractors? Not in the slightest.
Constance Nevoret, CEO of LittleBIG Connection, explains why.
This article was published in French on Les Echos – 5 May 2021
For a long time, employees were the norm and a permanent contract was considered the Holy Grail of the job market. How did we get from there to 25% of Gen Zs wanting to be their own bosses? This is nothing short of a revolution.
We cannot but acknowledge that freelancing and other forms of independent work are perfectly in line with this new generation’s needs. Whether it’s about freedom, finding purpose, flexibility or the allure of ‘digital nomadism’, this trend has won over 3.6m young people in France alone: this is already 25% more than in 2003, a tenfold increase compared to that of their employed counterparts.
Businesses, it must be said, also benefit from this arrangement. One third of companies prefer working with independent providers on a fixed-term basis over hiring full-time employees – a profitable strategy to sustain ongoing projects, especially during a pandemic. In a so-called ‘VUCA’ world (volatile, uncertain, complex and ambiguous) businesses must pivot towards a fixed-term project-mode organization which freelancing is particularly suited to. It gives businesses access to a pool of experts whose skills represent a real catalyst for innovation and optimization, and it enables them to overcome the near-chronic talent shortages that certain sectors experience.
Has the job market changed for good then?
That is by no means certain, because there are a number of major contrasting factors.
First of all, outsourcing talent is only sustainable to bridge a gap in areas that lie outside a company’s core activities, which is where ‘talent economy’ experts can really add value. For key roles however, relying on external resources is simply not feasible, not least for reasons of confidentiality and competitiveness.
It’s really a matter of long-term strategy for businesses, whose vision must necessarily transcend the timeframes of individual projects – 18, 12, 6 months (even less sometimes). Freelancers are only invested in short-term project goals, and that’s the way it’s meant to be! What we call an ‘extended enterprise’ cannot function without a core set of people who are invested in its vison and long-term objectives – that is to say, employees. The same goes for company culture and team spirit (crucial factors for success), which cannot exist without a stable, close-knit community. How can you feel that you ‘belong’ in an organisation without a stable team?
Lastly, freelancing is more than a way of working – it’s a lifestyle choice that can have its downsides. Freelancers must be at ease with uncertainty, able to work independently, ‘sell’ themselves and manage all the financial and admin aspects too. Not to mention that without the almighty Permanent Contract, a young worker will still find it hard to get a mortgage for a new home, for instance. A form of inequality that requires advocating for the legal recognition of earning strategies other than stable employment, especially now that employees benefit from advantages such as remote working, relocating to a different company office, and collaborative management.
Extended Enterprise: a new organizational model
The old dichotomy opposing the ‘carefree’ freelancer to the ‘alienated’ employee is not only negated by these considerations, it also forces us to think in completely obsolete terms. If, on the contrary, we shift our perspective to encompass the whole organization, we quickly see how we can get the best of both worlds: businesses become an organic talent ecosystem capable of continuous innovation. This new approach is linked to the concept of ‘Extended Enterprise’ (Bandeira et al.). After attempting to do everything by themselves and then outsourcing everything, businesses are coming round to the idea of doing things together. Collaboration, shared resources, collective intelligence: these are the founding principles of this new model.
An Extended Enterprise boosts employee loyalty while also forging strong bonds with external talent so they can work together as partners. Many digital solutions are emerging to facilitate this, such as online marketplaces where businesses and freelancers can connect. Digital platforms simplify relationships without cutting out the human element, because recruitment professionals are in charge of contracting and onboarding external resources. Thanks to integrated talent management tools, procurement teams can easily monitor all external providers and align their onboarding strategy with the broader company policies set by HR. Freelancers and employees are thus integrated into a company in the exact same way.
This unprecedented job market revolution offers a glimpse into future organizations. So instead of trying to pigeonhole workers into this or that status, let’s imagine a new paradigm where everyone will be able to follow their own path, based on their own needs and aspirations. Businesses must enable this transformation, not hinder it.
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