Want a Flexible Workforce? Here’s How You Can Build One That Works

When people hear “gig economy,” they might still think of food delivery or rideshare drivers. But something bigger is happening with how companies get work done: Freelancers and independent contractors have moved from the sidelines to the center of workforce strategy.

According to Upwork’s 2025 Future Workforce Index, 28% of U.S. skilled knowledge workers freelanced in 2024, which represents about 20 million people who collectively earned $1.5 trillion. They’re working full-time, earning strong incomes, and leading critical business projects—not just limited to side gigs.

Further, more than half (54%) of freelancers report advanced AI skills, and 29% have direct experience building or training AI models. These professionals are increasingly embedded in marketing, IT, product, design, and retail teams, driving real business results. In fact, freelancers now out-earn full-time employees in many roles, with a median income of $85,000 compared to $80,000.

The Harvard Business Review confirms the trend: 90% of executives now say that combining full-time and freelance workers gives their company a strategic advantage. More leaders are building flexible talent models to scale faster and access specialized skills.

What’s driving this shift to a flexible workforce?

1. Workers and companies both want flexibility.

According to McKinsey, 58% of Americans want contract-based work that gives them more control over their time. Companies want that same control: to scale up or down depending on project needs, without the burden of permanent headcount.

2. Managing freelancers is easier than ever.

Technology has made it simple to hire, manage, and pay freelance talent. Platforms like Upwork and Fiverr built the marketplace, but corporate workforce management platforms like AllWork make it simple for businesses to compliantly onboard, schedule, track, and pay these freelancers at scale (all without burdening their internal teams). Companies can now build a curated bench of trusted talent, keep them engaged with meaningful work, and ensure they’re put to work where they’ll drive the biggest impact.

3. The ROI is clear.

Instead of being limited by headcount budgets or location, companies can tap into exactly the skills they need, when they need them—whether it’s for a retail pop-up, a seasonal surge, or a specialized project. The result: shorter time to value, better outcomes, and more resilience.

How to build your flexible workforce

1. Start with the right roles.

Start by identifying the types of work that can be done independently or project-based:

• Field marketing

• Retail talent for peak staffing requirements

• Graphic design, content, and product marketing

• IT, software development, QA, and other technical roles

• Administrative, operational, and finance fractional consultants

You don’t need to shift your whole workforce overnight. Start small and scale.

2. Build a bench, not a Rolodex.

Instead of hiring one-off freelancers each time, develop a flexible talent bench:

• Repeat contractors you trust

• Freelancers with specific skill sets

• Regionally distributed workers for local needs

With a platform like AllWork, you can track performance, availability, and even schedule your freelance team in advance.

3. Use workforce tech to streamline things.

Manually tracking hours in spreadsheets or using 3–4 tools creates risk (and it’s just not fun for anyone). A true workforce management platform helps you:

• Onboard freelancers with the right documentation

• Track time and schedules

• Manage payments across states and worker types

• Stay compliant with tax and labor laws

4. Stay compliant from day 1.

Worker classification is one of the biggest risks in building a flexible team. Know the difference between W-2 employees or 1099 independent contractors and ensure they’re classified correctly before you onboard them:

• W-2 workers = In general, any employee who is paid hourly and scheduled in advance, and trained specifically on their role. Hourly employees who require tax withholding, benefits eligibility, and labor law protections

• 1099 contractors = Independent workers who work on a project basis and are not prescheduled or trained and provide their own equipment. with more autonomy and fewer protections (but more risk if misclassified)

5. Invest in onboarding and retention (yes, even for freelancers!).  

A freelancer who feels like part of the team is probably more productive (and thus more likely to work with you again!). Here’s how to retain your top talent:

• Share context and expectations up front

• Communicate in the same channels as your full-time staff

• Recognize great work when you see it

• Offer steady projects and growth opportunities

Why the right partner matters

At AllWork, we see this evolution happening every day. We help some of the U.S.’ largest and most successful companies power their flexible workforce with smart tools that handle the heavy lifting—everything from scheduling and timekeeping to HR and payroll. Instead of wrestling with outdated systems or messy spreadsheets, brands get an all-in-one platform that makes managing flexible workers simple and compliant. This means more time spent driving productivity, and less time stuck doing admin work.

The future of work is flexible and compliant

AllWork acts as the Employer of Record (EOR) for your W-2 workers across the U.S. and Canada. That means we handle the entire employment relationship: onboarding, payroll, tax withholding, benefits administration, and compliance with federal and state/provincial labor laws. For independent contractors, we also serve as the Agent of Record (AOR), ensuring your company is protected and your 1099 talent is managed correctly, with proper classification and paperwork that reduces risk and saves your internal teams hours of administrative work.

Final thought

Treating freelancers as a backup plan just doesn’t work anymore. The companies getting ahead are the ones using flexible talent as part of their core strategy. They’re moving faster, attracting top-tier professionals, and spending less time stuck on admin.

Freelancing has changed. Has your company kept up?

By combining workforce management technology with EOR and AOR services, AllWork gives companies the confidence to scale their flexible workforce without worrying about costly misclassification, compliance gaps, or back-office headaches. You get a seamless, compliant solution that empowers you to deploy the right people where they’ll make the biggest impact. Schedule a demo today.