The freelance economy prompts the rise of a new kind of temp agency

“In one generation, there will be no employees. Everyone is going be a subcontractor”

A growing freelance economy allowed Angie Kramer to found her business, JobBliss.

A growing freelance economy allowed Angie Kramer to found her business, JobBliss. (Jaime Hogge)

What’s the minimum number of employees you need to get the job done? Companies that live from one big project to the next, such as event-management firms, and those tied to cyclical demand, like warehousing outfits, are constantly on the lookout for fresh talent to meet obligations. But fast-changing consumer preferences and the rapid rate at which businesses open and close their doors have made staffing a pressing subject for firms of all sizes and across all industries.

“Employers right now are dealing with the constant ebb and flow of client work,” explains Angie Kramer, founder of Toronto-based freelance facilitator JobBliss. That leads to an endless cycle of layoffs and hiring. Meanwhile, a growing skilled freelancer economy is taking shape to meet the temporary needs of employers. To connect these two groups, a new wave of nimble web-based employment services firms is arising, promising a higher standard of recruitment than traditional temp agencies provide.

Instead of relying on personal and professional recommendations, common among temporary recruiters, JobBliss vets freelancers who join the platform and matches them to employers based on their skills. Companies like JobBliss, which recently launched its service by invitation, account for just 3% of the $270-billion recruitment market today, but stand to grow as businesses outsource tasks like human resources, marketing, coding and design.

A large pool of skilled freelancers awaits to fill these roles. Part of the reason is that entrepreneurialism is celebrated as a viable way of life these days, prompting more millennials to consciously pursue it. MBO Partners, a management service for independent professionals, reports that 29% of generation Y respondents opted to go independent after school. By contrast, a quarter of those surveyed went solo because there were few permanent positions to be had, and some freelancers were forced into contract work by layoffs.

The startups rushing to take advantage of these trends are tailoring their platforms to specific industries, job types and geographies. Workhoppers, a Montreal-based firm, focuses on connecting companies with local freelancers. “There’s a huge benefit when you’re outsourcing to have someone that’s close by,” says co-founder Linda Singer. “Even being able to meet once a week to ensure you’re on the same page in terms of the project really helps.”

HiretheWorld takes an international approach. Companies with design needs hold contests that attract submissions from across the globe, with logos being the most popular project. Designers frequently use the platform to get noticed and secure longer-term freelance work. “A very high percentage of designers continue to work with clients for years after the initial contest,” says Doug Beech, co-founder of HiretheWorld.

Repeat transactions such as these between businesses and their favourite freelancers will play an increasingly important role in the new outsourced economy. Companies have the comfort of working with a familiar team minus the expense of hiring full-time employees, while temporary workers get the certainty of steady work without sacrificing the chance to accept other projects. Kramer hopes to facilitate this kind of activity by allowing corporate clients to build a registry of workers with whom they have had positive experiences. “You can add all your favourite talent to this black book, and you’ll be able to see at a glance who is available and who is not, and you can book them into jobs,” she explains.

Just how prevalent freelancers will be in the future is a matter of debate. MBO Partners forecasts that half of the workforce in the United States will consist of freelancers by 2020. That number is far too low, according to John Ruffolo, CEO of OMERS Ventures. At a Toronto Region Board of Trade event in November, Ruffolo predicted the rising popularity of enterpreneurship and the increasing desire of young workers for control over their careers will result in a revolution in the way companies operate. “In one generation, there will be no employees,” he said. “Everyone is going be a subcontractor.”

While that’s good news for the recruiting business, it might strike most Canadians as a little unsettling; working contract-to-contract can be a precarious existence. “Freelancers need benefits for health care, RRSP contributions and so on,” says Singer. “New services are needed to protect these workers.” Companies that can meet that need—while outsourcing the boring stuff to focus on the essentials—look set to profit.