Freelancers make up nearly half of the global workforce — and that number’s only going up.
Contingent workforces — assembled based on project needs, encompassing contractors, freelancers and other temporary workers — are on the rise as companies aim to optimize costs without sacrificing scale.
In the US, the number of these contingent workers jumped to 6.9 million in 2025. A recent survey of business leaders, meanwhile, reports that 65% of companies intend to increase their use of contingent workers in the coming years.
These numbers point to a simple truth: contingent workforces are becoming the backbone of many organizations across blue- and white-collar industries. But as more workers fall under the contingent umbrella, governments worldwide are increasingly focusing on the issue, keen to ensure that genuine employees aren’t misclassified as freelancers. As a result, businesses are coming under more intense scrutiny and pressure than ever before.
The strategic shift to contingent workforces
But before diagnosing the problem, we need to understand what’s driving the trend. Contingent workforces offer a competitive edge to businesses looking for strategic flexibility, particularly in a cooling labor market. Driven by AI transformation and economic headwinds, full-time hiring has become harder to justify and skills are needed more dynamically.
Contingent models also let businesses hedge their bets. Hiring contractors allows companies to remain agile, respond to fluctuating demand and access niche skill sets without the long-term commitments of an employer/employee relationship.
“It all comes down to efficiency,” says Amritpal Singh, co-founder of global employment firm Multiplier, which offers solutions for seamlessly and simultaneously managing all forms of global workers.
“You avoid wasted resources and gain the ability to maximize productivity, streamline operations and drive sustainable growth.”
The impetus for change isn’t all on the side of businesses, however. It’s also a reflection of worker preferences. Professionals increasingly opt for autonomy over traditional employment as it lets them take advantage of opportunities like digital nomadism or diversified income streams.
28% of U.S. skilled knowledge workers now operate in freelance or non-traditional models — attracting top talent therefore requires businesses to be more open to contingent workforce models.
Driven by the combination of these shifting worker preferences and the need to build more resilient organizations, employers are increasingly using contingent workers within flexible, on-demand talent models. But it’s not as easy as it first appears — and mistakes mean falling afoul of increasingly strict laws.
The challenges for employers
As reliance on contingent labor grows, so does the complexity of managing it. The freelance worker boom offers plenty of upside to all involved, but it’s far from frictionless. There’s the challenge of integrating contingent and full-time workers in coherent teams, for starters.
But the principal issue comes down to compliance, classification and risk management. “Hiring contractors can seem like a magic bullet, but without the right processes in place, it can quickly become a logistical nightmare,” says Singh.
Why? Historically, the legal landscape failed to keep pace with the rise of flexible work, meaning there was less guidance around what constituted an employee versus a freelancer. But now, things are changing.
Misclassification risks
Take the UK’s IR35 reforms, for example. Designed to curb “disguised employment,” they’ve forced companies to ensure their freelancers aren’t actually employees in disguise, misclassified to avoid payment of the necessary taxes. According to HMRC estimates, 280,000 workers have been affected by IR35, with up to 200,000 moved from contractor status onto company payrolls.
Similar pressures are mounting globally. The Employment Rights Bill in the UK, rulings on worker classification in the EU and stricter worker classification rules in the US are all placing a legal spotlight on contingent arrangements.
Misclassifying a contractor as an independent worker when they legally qualify as an employee can result in fines, back pay liabilities and reputational damage. And the more international your workforce, the more complex (and potentially costly) these challenges become.
The key to hiring compliantly
So should businesses stay away from contingent workers? Consider that, by 2027, freelancers are expected to make up 50.9% of the U.S. workforce — the majority. For forward-thinking companies, this signals an opportunity to run towards instead of away from.
“In a lot of roles you only need somebody for two, five or 10 hours a week,” says Singh. “The best way to think about it is as an opportunity to recoup some of the wage cost.”
But properly taking advantage of this shift requires the right infrastructure to ensure compliance. Tools like CORs take on misclassification risk for you, allowing businesses to hire, classify and pay talent in their preferred currency across borders — eliminating compliance dangers in a single stroke.
Contingent hiring is more essential than ever. With the right approach, it doesn’t have to be more difficult.