Recessions are good times for adjustments and innovation. Since 2008 there has been sector-wide disruption in areas such as finance, law, and consulting. One emergent trend that seems here to stay is that of opting for flexibility, lower full-time headcount and keeping cash on the balance sheet. This has given rise to increasing numbers of part-time employees at all levels of the labor force, from tech talent to seasoned CFOs. Similarly, top professional talent is demonstrating increased interest for flexibility and agility.
More and more, talented business people are seeking combining personal pursuits (travel, family, and social engagement) with the ability to monetize their much sought-after skills as part-time freelancers. This has given rise to what is known as the “fractional worker.”
Fred Wilson of Union Square Ventures recently told a group of entrepreneurs at Wharton that he likes investing in technology focused on the labor market, specifically marketplaces. He argued the recession has fundamentally shifted the way we work and that there is data to prove it. While the US economy is climbing back uphill, jobs numbers have stagnated. The reason? People are engaging in part-time work that isn’t captured in conventional jobs data. The rise of fractional employment means unemployment numbers are consistently overstated.
Fractional Employment – a Growing Trend
Working remotely used to be unfamiliar, inefficient and costly. However, seismic shifts in technology and HR management have allowed companies to save on costs and employees to work from home or even farther afield. Even large corporations are now sharing files on Dropbox, making Skype calls and implementing flexible work programs (the backlash against Marissa Mayer shows everyone loves working in pajamas on Friday).
Companies face increasing volatility and have successfully adapted supply chains, manufacturing processes and financing to match uncertain times. At last, human capital management seems to be catching up. 6 percent of the US workforce was categorized as a freelancer in 1990, now the number of freelancers is anywhere between 20 percent -30 percent, according to Accenture. The freelance market is huge, and growing. According to the Economist, $300 billion is spent annually on part-time workers. While only $1 billion of this is done virtually, Staffing Industry Analysts expects this to grow to $5 billion by 2015. Even public policy is lending a helping hand. The Affordable Care Act makes it easier to work as a freelancer and still get great coverage.
The range of freelance services is also expanding rapidly. Elance, an early talent marketplace, has focused on low-end providers of technology and creative talent. Yet the biggest growth trends are in areas of financial planning and analysis, accounting, and legal strategy, where only behemoth white-shoe firms have dominated until now.
We founded Skillbridge while at Wharton because we tried to do freelance work and realized how high the search costs are as an independent professional going at it alone. Yet the top professionals we speak with consistently place great importance on more diverse personal and professional experiences. These extremely skilled individuals are increasingly transitioning jobs, starting families, and looking for ways to give back to their communities. Many of the Wharton grads we interviewed told stories of successful careers in finance and strategy derailed by taking a couple of years to start a family. The loss to individuals and the economy of this type of talent is wasteful and unnecessary.
Making Fractional Working Work for You
A question many professionals pose at one point or another in their career is how fractional working may pertain to them. The answer, of course, is particular to every person’s unique situation. The most straightforward indication is that you have a meaningful amount of time to engage in work, say 20 hours a week, but not so much that a full-time job makes the most sense. Furthermore, it is important to understand that some industries are farther along the fractional working adoption curve than others. Some industries, like graphic design and health services, have long been based on hourly or project fees and the access points to such opportunities are more obvious. Other industries, like those that Skillbridge is focused on, have long been relationship based and demand a more proactive maintenance of your network and presence in professional circles or on the web.
The decision to go at it alone is always a deeply personal choice. Luckily, with a little gusto and learned skills of working as a freelancer, the path is becoming increasingly attainable for skilled workers. We at Skillbridge are hopeful that companies and highly talented professionals increasingly see eye to eye, to lower overhead costs while providing the flexibility needed for careers to truly flourish. Onward and upward with the fractional worker!
Raj Jeyakumar is the co-founder and CEO of Skillbridge. Skillbridge connects companies and investors with high caliber professionals with expertise in finance, business strategy and marketing, on a flexible basis. Raj was born and raised in London. He began his career at Marakon where he worked extensively across Europe and the United States, as well as working in Africa with TechnoServe. He received a BA and Masters in Physics from Oxford University and an MBA from the Wharton School. Raj can be reached at firstname.lastname@example.org and on Twitter @SkillbridgeCo.