Downturn boosts freelance opportunities in U.S.

As the effects of the economic downturn continue to impact the hiring budgets of firms worldwide, some workers are finding a bright spot: rising opportunities for freelance and contract work.

Data from the Human Capital Institute suggests that at least one-third of the American workforce is "non-traditional," a category that includes independent contractors, consultants and other freelance professional services. Furthermore, growth of this type of employment is proceeding far more quickly than conventional jobs, the institute says.

Experts say the recession will accelerate this trend, as companies look for flexible ways to meet their staffing needs. Businesses have always called upon freelance employees to help them with short-term projects – particularly in creative fields such as graphic design or content writing. But with organizations in virtually every sector carefully monitoring their bottom line, the potential for cost savings could be an even stronger incentive to seek out independent talent.

How do companies financially benefit from tapping the freelance market? For one thing, when a business hires a contract worker, they are able to avoid the burden of certain employment costs, such as health insurance and retirement plans. According to the most recent data from the Bureau of Labor Statistics, employers spent an average of $29.39 per hour on workers’ compensation in March 2009 – with employee benefits comprising nearly one-third (30.3 percent) of these costs.

Meanwhile, some employers say they are better able to find qualified workers – who may specialize in a particular niche – when they turn to freelancers. This sensation may be even more pronounced in the current economy, as more experienced workers may be searching for a new role.

Finally, an additional employer benefit from hiring a contractor is that is can permit the company more flexible control over their spending, since these types of arrangement cover a fixed period of time.

Employers are not the only ones who benefit from non-traditional work relationships. Many freelance and contract employees often appreciate the variety, flexibility and high wages of such work.

But recent evidence suggests that the fastest-growing segment of contract workers is comprised of those who have lost their permanent jobs. May employment figures showed that more than 9 million Americans are working part-time for economic reasons, compared to 5 million who were doing so a year ago.

"More and more people are taking up part-time roles, project jobs, freelancing positions – a lot of them in fact want to find full-time work, but they are willing to do these during this very difficult time," employment consultant John Challenger told WCPO-TV, Cincinnati, Ohio’s ABC affiliate.

While the prospect of re-entering the workforce with less of a safety net may initially be intimidating, some people who succeed in completing a number of freelance jobs wind up preferring their new arrangement – and opting to continue on a path of non-traditional employment.

Which areas are seeing the strongest growth in terms of recessionary hiring? According to June 2009 statistics from oDesk, the popularity of social networking and blogging is having an explosive effect on the creation of contract jobs related to these websites’ underlying technology.