The beginning of a new year traditionally serves as the time to speculate on the year ahead. For 2020, the economy, technology, and Millennials will be the driving factors behind five of the year’s most crucial small business employment trends.
#1: Employers will brace for a potential recession.
Despite 2019 marking the longest economic expansion in U.S. history, a 2020 recession weighs heavy on the minds of the C-suite. Key growth metrics (including revenue, earnings, and hiring) were at or near multi-year lows in the fourth quarter of last year, and 97 percent of CFOs queried by Deloitte reported expectations of a 2020 recession or economic downturn. Headcounts also are expected to fall, with 60 percent of CFOs surveyed by CNBC expecting a reduction in the months ahead. With the right talent strategy, however, a downturn or reduction needn’t come at the cost of growth.
“In 2020, smart companies will employ a talent strategy that balances traditional employees with appropriate use of flexible, skilled freelancers,” said Elizabeth Eiss, founder and CEO of the talent curation platform ResultsResourcing. “Hiring specialized freelance talent helps small businesses address their number one hiring issue: finding and competing for quality talent. While a business should invest in W2 employees to perform the essential work of the firm, freelance workers can be added and subtracted with less disruption than employees for non-core but important work. Adding freelance professionals to the talent roster enables an organization to quickly respond to changing market conditions and expand its ability to compete on a variable cost basis.”
#2: Remote work will become ubiquitous.
In 2019, approximately two-thirds of companies employed remote workers and 4.7 million employees worked remotely at least halftime. With 80 to 90 percent of U.S. workers reporting the desire to telework at least part-time, those numbers are expected to climb. To succeed in 2020, small businesses should embrace a flexible-work culture.
“Working with freelancers is a great place to start,” advised Eiss. “Since most contract professionals work remotely, developing policies and procedures to work with freelancers can be a way to pilot or ‘wade into’ the remote-work waters. It’s also a way for core employees and leaders to develop valuable virtual team skills.”
#3: Millennial managers will change the workplace.
In 2020, more than 20 percent of the 53 million Millennials in the workforce will be in management. Cultural changes to expect from the transition include more flexible working arrangements for team members and a significantly larger use of freelance talent (more than twice that of baby boomer managers). To prepare, companies with younger managers should focus on formalizing policy, said Eiss.
“At ResultsResourcing, we recommend organizations formalize when and how freelance talent should be used appropriately,” she explained. “Communicate the policy and work with your core team to align and embrace it. Millennial managers can help lead the way.”
#4: Skills specialization will create challenges for the unprepared.
Over the past three years, workplace skills have become increasingly specialized, and that trend is expected to continue throughout the coming decade. A nimble 2020 talent strategy will utilize innovative employment practices, such as hiring project-based or temporary freelancers, to address skill and talent shortages.
“Expand the skill set of your existing team when its core to the value proposition of your business,” advised Eiss. “Investing in building skills that are not core, or essential to your business, is a questionable use of finite resources. Instead, focus your core team on what you/they do best, and outsource the rest. When you have a specialized assignment or you want to try something new, hire a freelancer with the skill and experience you need. That way, you get immediate value added to your team, avoid the opportunity cost of a learning curve, and your new idea or project is more likely to succeed or fail on its merits – not because of team inexperience or ineffective execution.”
#5: The gig economy will continue to evolve.
Freelancers have been a staple of the U.S. economy since at least 2014, consistently making up about 35 percent of the country’s workforce. Economic conditions, generational differences, and technological advances, however, mean the hows (e.g. on-site vs. remote) and whys (e.g. choice vs. necessity) of freelancing are constantly in flux. (California’s recent attempt at legislating the gig economy is one example.) Such constant changes needn’t discourage small business employers from investing in freelance talent, though.
“Business practices, politics, and regulation will continue to shift to keep up with company and worker demand for more flexible work structure,” Eiss explained. “At ResultsResourcing, we recommend organizations make appropriate use of freelancers for the non-core work of the firm and hire professional contractors who are incorporated and run a true business.”
“The real issue isn’t about whether to use freelancers. It’s about being clear on your business requirements upfront and then evaluating matches from a deep pool of quality freelance candidates. Just because you trust your neighbor does not mean that the freelancer he/she knows is the best fit for your company. Make the time investment to find and vet the best choices of freelance talent – or hire someone to help you source quality freelancers. That’s how you reap the true benefits of the gig economy and save money while reducing risk.”
