Staffing companies expect recession to boost shift to freelance and temporary work

To be or not to be, that is the question…of the next recession. It’s not clear yet if CEOs are right about a looming economic downturn or if it’s just bad vibes.

Yet one thing does seem clear: staffing companies expect a recession to boost what they say is already a growing shift to freelance and temporary work.

Jason Chitwood, general manager at MarketerHire for Agencies, which provides temporary workers to companies like WPP and GroupM, told Marketing Brew he expects business to grow faster if and when a recession hits.

“We’re anticipating a positive impact for MarketerHire,” Chitwood said.

Since he came into his role in January, he said he’s seen many agency clients scale “quite dramatically,” some bringing on 4–6x more freelancers. Demand for workers has ranged from lower-level media buyers to senior-level strategists.

“They’re worried about recessions, they’re worried about all these things, just like everyone is, so for them, the safer they can be and the more folks they can bring onboard who are not full-time employees, the safer they are in terms of having to reduce their risk of layoffs,” he said.

Layoffs have already started happening at agencies like The Many and R/GA, and eMarketer recently said that more job cuts in the industry “could be on the way.” Plus, companies like Microsoft, P&G, and Ford have reduced ad spend for different reasons this year.

As agencies grapple with these downturns, they might rely on short-term workers more frequently. “It’s not as though these companies can stop doing business, but it may be that they unfortunately reduce headcount and they’ll be looking to freelancers to fill that,” Brent Messenger, VP of public policy and community engagement at freelance platform Fiverr, told us.

Holly Wasson, chief community and marketing officer at We Are Rosie—a “flexible career platform” for marketers, as she calls it—told us she’s seen an uptick in bookings over the last several weeks. One reason, she said, is given economic uncertainty, more brands and agencies are looking at “burst capacity” hires rather than full-time employees as marketers look at budgets on a quarterly, rather than full-year, basis. According to Wasson, We Are Rosie works with “every media holding company,” as well as brands like Hulu, IBM, and Bumble.

Brian Dolan, CEO and founder of WorkReduce, which also provides marketing staff to agencies and brands, said the company tripled its revenue over the last year. While he hasn’t heard of clients slowing their hiring, he said that could change if consumer spending goes down and ad budgets are cut.

“What we experienced at WorkReduce during the pandemic was holding companies laid off their workers, and then kept hiring ours because we’re not a capital expenditure for them,” Dolan told us.

A permanent shift to temporary?

“We expect to see brands and agencies using freelance more, whether or not the economy goes into a recession,” Wasson said. MarketerHire, WorkReduce, and Fiverr all expressed a similar sentiment.

According to a 2021 survey by GrowTal, another temporary marketing staffing company, 85% of 234 freelancers on the platform said freelance work will become more common in the future.

Chitwood said the hourly rate for MarketerHire workers is “a lot of times higher than what they would make as a full-time employee,” given that many often work more than 40 hours per week, billed or not.

Beyond pay, Wasson cited the 2022 Rosie Report, which found that the freelancers surveyed also appreciate the ability to control their schedules, work wherever, and grow more quickly in their careers. She also said many feel more stable given they’re often not reliant on one employer alone.

“What we’ve heard time and time again from our freelancers is that working a corporate job gives you a false sense of security,” Wasson said.

But oftentimes, going freelance means forfeiting the benefits that come along with full-time employment. “When you come onboard and you’re a full-time employee, there’s a lot of [costs] that go with it,” Chitwood said, pointing to benefits like healthcare.

Since many of its freelancers work 40-hour weeks, Dolan said WorkReduce provides healthcare and 10 days of PTO through the company. We Are Rosie also provides benefits like healthcare and 401(k)s to its freelancers working more than 30 hours per week. Fiverr and MarketerHire do not provide benefits.

Even with business on the up and up, Chitwood said he doesn’t expect the agency norm to shift from salaried to contract positions—at least not anytime soon. “I think the trend will be more and more towards hiring contract talent,” he said. “Will it ever be 100%? I don’t think so.”