6 underrated benefits of hiring freelancers for your business

Elena Prokopets
Written by Elena Prokopets
on November 10, 2022 6 minute read

“Freelancing” is hard to ignore these days. It’s everywhere – from news headlines and industry panel discussions to your second cousin’s LinkedIn profile. 

According to various sources, around 25%-35% of the total national workforce on average do freelance work on the side or full-time. That’s millions of highly-skilled people that companies can already engage! 

…And even more talented people are looking into self-employment and freelancing. 

A 2022 report by Mercer says that people want to start freelancing because of:

  • Higher earning potential (48%) 
  • Greater flexibility/freedom (42%) 


Only 2% switch to freelancing after losing a permanent job. In comparison, 22% of people chose this reason in 2019. 

In other words: People people crave more flexible work arrangements and better pay. For many, freelancing stands out as a more attractive alternative to traditional employment. 

The current workplace trends – “The Great Resignation,” “Return-to-the-office boycotts,” and sweeping talent shortages – further prove the data mentioned above. 

The good news: people aren’t leaving the workforce altogether. Many merely chose to join the external workforce, rather than the corporate ranks. 

Employers, in turn, have to adapt their talent sourcing strategies. 

A joint study by Harvard Business School and BCG Henderson Institute found that:

  • 30% of surveyed businesses extensively use new talent platforms; 30% reported moderate current usage.
  • Yet, 60% expect they would increasingly prefer to “rent,” “borrow,” or “share” talent with other companies in the future. 


With the current talent crunch for skilled occupations, hiring freelancers is the only way for many to cover looming skills gaps. 

That said: the rationale for hiring freelancers differs a lot, but businesses unanimously agree on the advantages of working with freelancers. 

6 benefits of hiring freelancers and independent contractors

If you’re still on the fence about contracting independents, here are six data points to help you decide. 

1. Faster access to skilled talent

In mid-2022, three out of four employers report difficulties with hiring talent. Knowledge workers in IT, Sales, Marketing, and Operations are in short supply. 

The global tech sector alone had a 25% decline in applicants this year, while the number of jobs posted nearly doubled. This affected 69% of enterprises. 

The good news is that knowledge work is the easiest to do remotely. As a result, highly-skilled freelance talent is often easier to find than full-time employees.

The global freelance workforce is:

  • Well-educated. 77% of EU freelancers have a Bachelor's degree and 55% also completed graduate studies. 45% of US freelancers have a post-graduate education. 
  • Easy to engage. Per an IBM study, independent workers demonstrate collaborative skills equivalent to most employees. They are also more accustomed to working independently with less supervision and report having higher levels of control over their work lives. This leads to higher personal productivity and efficiency. 
  • Growing in size. In the US, the number of full-time freelancers grew from 28% in 2019 to 36% of the total workforce in 2020. At this rate, half of the U.S. workforce will be freelancing by 2027. Read: people will the most in-demand skill sets will be working solo. 

Boomers and Zoomers also seem to be united by freelance work. 50% of Gen Z (now aged 10-25) freelanced in some capacity in 2021. Many will likely remain part of the freelance economy as they age up. Among Europeans, one out of every five professionals aged 50+ is open to self-employment as their path out of the labor force. That’s a growing cohort of people as the population rapidly ages. 

2. Flexible hiring 

Freelancers are also called the “on-demand workforce”. 

That’s because you can dial up talent on demand whenever you need it – and significantly faster in comparison with traditional hiring.

  • Average time to fill in-house tech-related position: 56 days
  • Average time to hire a freelance developer: 7-14 days 


Hiring freelancers is not just faster, it’s also more operationally efficient. You can scale up a remote team to cover a last-minute project or test some new idea without worrying about what those peeps will do in the future (while you keep paying ‘em payroll). 

You can contract freelancers for:

  • One-off projects, tasks or deliverables
  • Ongoing hourly or retainer-based work 
  • Part-time or full-time contingent contracts 


The biggest boon of hiring freelancers is that you can mix and match different types of external workers together, across functions. 

That’s what other businesses do. 

A 2021 Deloitte report found that enterprises hand-over over 50% of different tasks to shared business services providers across different functions. (An estimate which likely also includes independent service providers.)

Source: Deloitte 

3. Cost competitiveness 

Affordability is one of the more well-sung benefits of hiring freelancers and independent contractors. But don’t confuse this with penny-pinching. 

Hiring independent contractors is cheaper because you are NOT covering:

  • Salary, benefits, and perks 
  • Social contributions, employer taxes, pension 
  • Work equipment and office space 
  • Training, upskilling, workplace insurance 
  • Other misc. employee overhead 


In the US, a full-time employee costs the company 1.25 to 1.4 times the annual salary. Employee payroll costs can be even higher in high-income economies with larger social benefits. For example, in France or Sweden employer taxes alone average at 45%-50% of the employee's gross salary. Overhead hiring costs come as a separate budget line. 

Freelancers “sneak in” tax and social overheads in favor of higher hourly, day, or project rates. (The taxes don’t disappear altogether.) 

But even larger-than-anticipated price quotes make the math work in your favor. You often end up spending less compared to hiring a FT employee for the same amount of work. Or you end up spending more… but also get more work accomplished with a larger remote team

Compared to agencies and shared services providers, freelancers also charge less since they don’t have as many operational overheads. 

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4. Fresh perspective and innovative thinking 

Freelancers get to see many projects – large, small, successful or complete flops. This builds up their knowledge: across industries, functions, and operational practices. 

Because freelancers have grown their skillset across a wider portfolio of projects (compared to a regular employer), they are better suited to: 

  • Advise and consult companies in areas they don’t have operational knowledge or first-hand experience. 
  • Contribute ideas and fresh perspectives based on their past experience and diverse industry/professional knowledge 
  • Challenge your company to evolve – try new processes, adopt emerging technologies, expand into new markets, etc. 


Or as a group of British scientists eloquently wrote in a research paper

[Freelancers] liberate businesses from the limits of their internal resource base and enable the use of exceptional talent and diverse skills that would otherwise not be economically feasible to hire on employee contracts. [They] reduce the amount of finance required for innovation and business start-ups and promote efficiency-driven economic performance. 

Given that “innovation” is on everyone’s agenda (but budgets for it are not), hiring freelancers can be your way of “doing more with less.” 

5. Operational efficiency gains 

Freelancers are flexible folks. You can get new people on board when needed, then switch, re-assign, or part ways with them when the job is done. 

This can lead to incremental operational efficiency gains: 40% of businesses working with highly-skilled freelancers improve time-to-market for new products and boost productivity. 

But change doesn’t come from just anywhere. To nurture high-performing freelance teams, you need to play your part: 

  • Create SOPs, improve internal documentation, and standardize processes 
  • Become better at work breakdown, task prioritization, and project planning  
  • Change how you collaborate to include more async, autonomous work 
  • Get better at formulating your needs, requirements, and preferences 
  • Facilitate your teams in pushing forward with planned work in other ways 


Given that only about a third of employers (34%) agree that their managers are effective at removing obstacles to doing work with speed, the changes mentioned above are well overdue. 

Making your company conducive to the external workforce prompts wider transformational changes — in overall agility, resilience and responsiveness to market changes. 

Greater agility can also help solve some of your other woes — high operating costs and constrained access to talent. 

If offered to work flexibly, 87% of in-house employees would accept such an arrangement (instead of leaving for another employer). And happy, engaged workers are also more productive, especially when there’s less red tape in their way. 

6. Long-term business model changes 

As people increasingly choose to work solo, the size and composition of the traditional workforce will likely decrease. 

Globally, employers are also grappling with aging populations – a factor that will reduce local talent availability in many developed markets. In the EU member states, the share of residents aged 50+ will increase to 45% in 2050 (from 37% in 2020). But fewer younger people will enter the workforce at the same time – as both Gen Z and Millenials have a  penchant for freelancing

Because of these factors, 60% of leaders say it’s “highly” or “somewhat” possible that their core workforce in the future would be much smaller compared to the present. 

By developing a strong base for the external workforce today, you can prepare your business for the future where you can: 


When you have the above systems at the heart of your business, you can pursue new directions for a much lower cost — and at a faster pace. 

Final thoughts: Why companies should hire freelancers?

Because there are objectively NO good reasons for not hiring freelancers. 

The freelance economy is growing larger in headcount and generating revenues. Classic freelance marketplaces for gig work are actively being replaced by digital talent match-making marketplaces, offering à la carte access to highly-skilled talent. 

Globally, we are moving towards a future where there’s no such thing as a hard-to-fill role, because businesses will have multiple talent pipelines for hiring freelancers, full-timers or anyone in between. 

This is the future you can start building out today with Xolo – your companion for all things admin, compliance, payment, and freelance management. We’re saliently standing at the vanguard of the freelancer evolution by empowering businesses to easily contract talented people from anywhere, at any time with a business hub that knows you need more quality and less noise.

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About Elena

Elena Prokopets writes content for tech-led companies & software development businesses, marketing to them. Her empathy for the customer, expertise in SEO, and knack for storytelling help create content that ranks well and drives industry conversations.

Elena uses Xolo so she can focus on her solo B2B content writing business without stressing over the compliance and admin overhead.


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