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More than a quarter of small businesses (27.3%) said they were not able to fill job opening over the last six months, as reported by SCORE’s 2017 Jobs Report and the Small Business and Enterprise Council. They found that a simple majority of small businesses owners (51.3%) cited their inability to find qualified applicants as the most significant factor working against their success.

As a small business owner, do you have trouble finding skilled, talented, experienced workers? Do you have high turnover? The cost of employee churn is painful for small businesses. It costs up to 16% of an employee’s annual salary to replace them, or about 4,800 a year for an employee that makes 30,000 a year. This cost goes up to 19% for managers and next tier employees.

Many small businesses have trouble offering the kind of wage and benefit packages that can attract and retain full-time employees, but part-time employment can be equally troublesome—and costly in the long term. Many times, part-time employment is an unhappy compromise for employment-seeking workers, who desire the security and benefits of full-time work.

Neither the business nor the employee wins in such an arrangement, as their expectations are not aligned.

The future of work is ushering in a new model and new practices, including automation and the freelance economy. Small businesses can adapt their operations to save significantly, while streamlining their businesses to benefit from technological trends like mobility and virtualization, and tapping a workforce that is highly motivated, self-skilling and engaged.

The freelance workforce is unstoppable

Did you know that half of all millennial employees are already working in the freelance economy? That the freelance workforce is predicted to overtake the traditional workforce within a decade? The freelance economy has grown at three times the rate of the rest of the workforce since 2014 and contributed 1.4 trillion to the economy last year.

If you want to check out the growth of the freelance economy, Upwork and the Freelancers Union have been tracking its growth since 2014, in their independent annual study. They also explore how and why people choose to work in the freelance economy.

Some big takeaways:

  • A majority of freelancers are opting into the freelance economy by choice (63%) rather than economic necessity
  • Freelancers value their independence and feel more secure with multiple income streams rather than relying on a single employer
  • Freelancers value personal rather than public ownership of their benefits; 7 out of 10 prefer the opportunity to earn more and buy their own benefit package
  • Technology is empowering freelancers to find and accept more work

How can small businesses utilize the freelance workforce to power their businesses and run more efficiently?

Understanding the freelance workforce

The freelance workforce is huge but diverse. From highly skilled experts to college kids doing odd jobs, the freelance workforce is global, mobile and technologically savvy. Even those performing lower value tasks like grocery delivery and data entry are likely to be adept at technology and actively working at gaining new skills. There are a few types to keep in mind:

  • The contractor-freelancer–The contract freelancer is looking for short-term, temporary work.
  • The entrepreneur-freelancer–The entrepreneur freelancer is a business-minded individual who views their work as a product, taking pride in outcomes and bringing an entrepreneurial spirit and mindset to all they do.
  • The on-demand freelancer–The on-demand freelancer is a hustler performing a range of tasks and relying on their superior speed and proficiency to make money.
  • The consumer-freelancer–The consumer freelancer might already be a customer or a fan and is willing to trade or barter their services.

How can your small business streamline its operations to patch in freelancers and contractors instead of traditional employees?

  • Do a task inventory—You might have your workflows organized by job responsibilities, but in order to benefit from automation and the freelance economy, you’ll want to get a good grasp of all the tasks performed across your company, irrespective who does them. This will help you package work for automation or for shipping it out to a freelancer or marketplace.
  • Mobilize everything—Freelancers are bringing their own skills, their own benefits, and their own devices. Mobilizing business critical functions will allow you to assign and manage tasks across this already existing network while allowing remote workers the freedom they cherish.
  • Digitize your business—The freelance workforce transacts business online, so having a strong digital presence is key to connecting with the talent you want. Digital equals global, opening up a world of opportunities for small businesses to compete and even replicate their success in new markets.
  • Standardize job tasks–Even on-site jobs can be standardized so that temporary workers or on-demand freelancers can fulfill them.

Digital transformation is poised to transform the business world, from the corner store to the global megabrand. In the future, we’ll all be entrepreneurs, contracting and partnering with each other and managing multiple relationships and specialty sets.

The sharing economy, mobility and the emergence of cryptocurrencies will accelerate these trends. Small businesses can join with the forces shaping the future of work while building a business model that is more agile and resilient.