Contingent Workforce programs may be experiencing an increase in population. According to the Census Bureau the number of Federal Tax Identification Numbers (FEIN) has increased over 50% since 2019. Typically, workers new to project-based work environments that partner with larger corporations form an entity to help with tax and compliance liabilities. his points to the Next Rush of Contingent Workers.
Data from the Labor department backs up this trend by reporting that self-employed workers have increased 6% to 5.9% of the total U.S. workforce since 2020, while formal employment has decreased by 3% since the start of the pandemic. The shift is a welcome change for contingent workforce programs searching for contract talent. Contingent Workforce recruiters (internally and externally) generally rely on acquiring talent that are already contractors and rarely lure employed workers.
Piling it on for corporate America, the labor department reported that workers employed by companies with a minimum of 1000 employees recorded a workforce deficit for the first time since 2004. This reinforces the labor department’s Sept. data indicating a record 4.4 million workers resigned their positions. Maneuvering corporate politics, people reassessing their work/life balance, and those embracing remote work permanently are contributing factors to these shifts.
It is important to note that this new crop of self-employed workers may enter into businesses that do not support the fortune 1000, such as opening a restaurant or flower shop. Future data should point to where these new non-employees land, whether it’s opening a restaurant or supporting a corporation utilizing skills learned when employed and then transferring their work process to a project-based environment. We’ll look for signs pointing to Next Rush of Contingent Workers.
Age may also be a contributing factor. On a recent investor call, UpWork CEO Hayden Brown citing data from a company survey said, “A new type of career path has emerged, with half of the Gen Z [age 18 to 22] talent pool actually choosing to start their careers in freelance rather than full-time employment.”