In an annual survey jointly authored by Upwork and the Freelancers Union, they estimated that approximately 57 million Americans, or 35% if the American workforce, performed “some freelance work” in 2019. For a variety of reasons, it’s become increasingly clear that this constituency makes-up a large and growing contingent of the American workforce.
One complication in surveying this landscape involves the increasingly varied nomenclature that has evolved with subtle but distinct differences: independent contractor, freelancer, temporary worker, gig worker, self-employment, etc. While there often are real differences in these classifications, the IRS tends to only see two classifications: a W-2 or a 1099 worker. The rest is semantics, at least according to the IRS. (For reasons of simplicity, all jointly-referred to as independent contractors below).
In the agency ecosystem, independent contractors have always played an important role. But with some of the shift from agency of record (AOR) work to more project-based work, independent contractors will play an outsized role in the future as agencies will need to scale their workforces quickly in response to project lifecycles.
While how heavily an agency chooses to utilize independent contractors will always be dependent on a number of factors, including of course client preference, there is a growing confluence of legislative, regulatory, and legal developments that could threaten an agency’s ability to engage independent contractors as needed.