Freelancers to 'substantially' replace full-time staff in the next five years: study

The majority of executives believe that freelancers will replace full-time employees in the next five years, a new study has revealed. The research was conducted by human capital management software company Ceridian, a partner of HRD's upcoming HR Tech Summit Australia & New Zealand.

One of the key findings of the study showed that 65% of the respondents agreed that freelance or gig workers "will substantially replace full-time employees within the next five years". Per region, 55% from the United Kingdom, 63% from Australia, and 69% from New Zealand believe in the rise of freelancers in the future.

"As the competition for talent heats up, employers will need to come to terms with the fact that the power dynamic has shifted in favour of the employee, and the idea of employer exclusivity is quickly becoming a relic of the past," said Steve Knox, vice president of Ceridian's Global Talent Acquisition.

According to Knox, more full-time employees are beginning to acquire side jobs, a trend that could likely become the norm in future.

"One trend we're seeing is that talent – even those working as salaried, full-time employees – are beginning to embrace the tenets of the gig economy, seeking roles for shorter periods of time with multiple organisations. We believe this approach to work life will become the norm, and the data shows that employers are already beginning to adjust their recruitment and talent management strategies accordingly," he said.

In relation to the topic of gig workers, another key finding in the research also showed that more employers will be looking to leverage gig workers amid the expansion of their companies. The study showed that 53% of the surveyed executives will increase the size of their teams in the next 12 years, utilizing gig workers in the process. The majority of executives (71%) also said they will hire for more remote talent in the next two years, with 63% tapping on overseas applicants for the companies.

AI for talent acquisition

The future of talent acquisition will likely also be driven by technology, the findings suggest, as more employers embrace artificial intelligence (AI) in screening, shortlisting, and identifying potential applicants.

Ceridian's research revealed that 42% of executives are already using AI tools for recruitment and talent management, while another 46% are planning on it. Knox emphasised the importance of using AI tools for recruiters, citing the huge competition for talent and the need to make immediate hiring decisions.

"AI has become a very powerful tool for recruiters globally, as it allows employers to make more accurate, efficient, and fair talent decisions, which is especially important now given that competition for talent and the need to make quick hiring decisions has never been higher," he said.

The upcoming HR Tech Summit will be held virtually later this year. Click here to view the full agenda and register for your place.