Years after the 2008 financial collapse changed the economic landscape, COVID-19 has shifted how companies see freelancers.
Prior to the COVID-19 pandemic, small business owners generally saw freelancers as a way to fill an occasional gap in staffing. Yet, as the economy has suffered due to business shutdowns, economic uncertainty and other pandemic-related factors, companies have had to pivot to accommodate a new normal. For many employers, those changes have meant shifting some or all of their workforce to include freelance workers. As we wrap up the maelstrom that's been 2020, here's a look at how the coronavirus pandemic has affected employers' use of freelancers and contract workers.
COVID-19 and the freelance boom
Since the start of the pandemic and the widespread closures and restrictions on businesses at the local level, entrepreneurs throughout the country have had stories of hardship as they've tried to keep the lights on through it all. With a major reduction in revenue and a lack of continued support from the federal government, companies have had to either shut down temporarily or cease operations for good.
One way companies have learned to cope with the unexpected and prolonged hardship has been to shift from traditional employees to a stable of freelancers. The Freelancer.com Fast 50 Report found that freelance job openings jumped by 25% from April to June 2020, and compared with the same time period in 2019, open freelance positions jumped by 41%.
Though part of that increase could be attributed to people with more time at home looking to learn new skills from freelance teachers, things shifted once it was evident that the country would be dealing with this issue for an extended period of time, Brent Messenger, vice president of public policy and community at freelance website Fiverr, told business.com.
"When the pandemic first hit and during the first wave of lockdowns, we saw an uptick in personal project-oriented services, such as music and crafting lessons, fitness plans, video game coaching and the like," he said. "However, after about a month, we began to see a jump in the demand for business-related services, particularly ones that were linked to bringing traditionally offline businesses online or those that help promote businesses online, like social media marketing and more."
Citing a reduction in overall business budgets as a result of the pandemic, Messenger said Fiverr has found that companies are seeing freelance help as essential to their survival. And during the holiday season, more companies are looking to take advantage of a remote workforce to try to keep up with increased demands.
The increased reliance on freelance talent could even outlast the virus, Messenger said, since the pandemic has profoundly altered how businesses think about their digital channels. He said Fiverr expects the uptick in businesses looking for freelance help to continue even after the pandemic.
"It will be imperative that [small businesses] adapt to new customer needs in order to survive," Messenger said. "It is clear to us that the global shift towards remote work and digital transformation will … become a long-term strategic investment for businesses of all sizes going forward."
How small business owners are using freelancers
With the figures supporting a freelancing boom in recent months and a glut of small businesses looking for help during a trying time, we reached out to entrepreneurs to see the role freelancing plays at their organizations. In nearly every case, qualified freelancers were seen as a cost-saving measure that has allowed these businesses to keep operating during the pandemic.
Alphabet City Beer Company
Early in the pandemic, the East Coast was hit particularly hard by the virus. For businesses like craft beer store and bar Alphabet City Beer (also known as ABC Beer Co.), located in the East Village of New York City, mandated shutdowns, followed by limited operating hours, meant having to rely on freelancers to switch to an increasingly online-based operation.
"This year was different than any other in so many ways, but it also brought a wave of suddenly unemployed or underemployed professionals who were ready, willing and able to take on all kinds of projects," said Zach Mack, co-owner of ABC Beer. "We were able to reposition and highlight our e-commerce launch thanks to the help of a bunch of freelancers and consultants we hired. And because of the change in work environments and arrangements broadly, things turned around so much faster than I was ever used to before."
Though the process of hiring freelancers was relatively new to Mack and his business partner, David Hitchner, Mack doesn't think he would change how the company responded to the pandemic.
"Working with a freelancer gives you so much more maneuverability," he said. "2020 specifically has shown us that being adaptable is key, and I think that using freelancers to keep up on the changes – some of which are coming literally by the day for us in the hospitality industry – will be one of the only ways we can cope and compete on the budgets we have."
Shepelsky Law Group
Though the pandemic caused disruptions to everyday life, law proceedings and litigation haven't stopped. For Shepelsky Law Group – a New York-based immigration, family law and personal injury law firm – the pandemic forced a shift in how the practice was run.
"During the pandemic, we shifted our strategy and created systems for working with both our own staff, as well as new, virtual staff in a remote work environment," said Marina Shepelsky, the firm's CEO and founder. "We began doing consultations and working on cases remotely. We strategized on advertising and marketing in a completely different way – with emphasis on social media advertising."
And while it was an adjustment to do hearings and consultations remotely, Shepelsky said her firm has relied on services such as Upwork to change who was performing some of the tasks to "support these new strategies and initiatives."
"My team has been working with external, freelance, virtual business coaches and partners to further develop our virtual skill set," she said. "There are many qualified workers who are experts in our field and available to work with us to support various aspects of our business practices, like marketing and administrative work, via Upwork."
As the senior e-commerce manager at Rooted, Olivia Claparols is intimately familiar with the company's shift from its business-to-business and retail operations to a larger e-commerce focus in the wake of the pandemic. The direct-to-consumer indoor plant company, based in both Los Angeles and New York City, had to reinvent how it did business and adapt to the online space.
"We're a lean team building a high-growth startup during a critical early stage, so as you can imagine, it's all hands on deck all the time," she said. "Working with freelancers allowed us to pursue creative and technological projects that had been on our to-do list for quite some time but would have otherwise remained on the back burner as we focused our efforts on more immediate fires."
Given that switching to freelancers in certain areas of the business has given the company the "freedom to adapt to a changing e-commerce landscape while making operational adjustments," Claparols said responsibilities were appropriately redistributed to help focus on the digital aspect of Rooted.
She anticipates the company will continue to use freelancers in the near future.
"We continue to work with freelancers to improve the user experience online and develop our website further," Claparols said. "In fact, we're in the process of refreshing our entire site and will be slowly rolling out new features throughout the next few weeks."
The rising tide of freelancing and the gig economy
Over a little more than a decade, the number of Americans relying on freelance work either as their main source of income or as a supplement to their weekly take-home pay has grown steadily. Though the gig economy's surging importance in the U.S. economy can be attributed to many factors, perhaps the largest contributor was the 2008-09 recession.
According to data from the U.S. Bureau of Labor Statistics, the gig economy made up 10.1% of the total U.S. workforce in 2005, and by 2015, it had grown to 15.8%. In 2019, the number of U.S. freelancers was approximately 57.3 million. Though the economy played a major role in the surge of freelance workers, Messenger said the use of ad hoc workers makes sense from a business standpoint.
"Freelancers allow small businesses to bring in specialized skills that enable them to do things outside of their core capabilities, like build an e-commerce site or create and maintain a social media presence," he said. "Additionally, freelancers are able to complete these projects in a very flexible and agile way, saving the small business owner time and money on bringing someone in full time and further allowing them to concentrate on their core business."