Last fall, we polled startups on their views of the flexible workforce. We kept the questions open-ended to avoid biasing the data set but anticipated a generally positive sentiment.

What we found is that flexible talent is no longer just an alternative hiring strategy. It is a fundamental driver for profitability, growth, and innovation. Startups consistently cited three core benefits:

1. Access new markets without a headquarters or full in-house team
2. Gain executive-level expertise in sales, product, operations, finance and marketing at a fraction of the cost
3. Scale efficiently, investing only when demand is validated

The benefits are clear, but are mature businesses embracing this shift?

Recent data from contractor-of-record Mellow says absolutely. Their latest report shows a 260% increase in U.S. businesses hiring freelancers from 2022 to 2024. Their report also shows where U.S. businesses are hiring freelancers, what skills are in demand, and the broader implications for entrepreneurs, executives and business owners.

Related: Why Side Hustles Are Reshaping Careers in the Future of Work

Freelance didn’t just survive, it thrived through two difficult years

The past two years have been challenging. Waves of layoffs, rising inflation and widespread hiring freezes. If the flexible workforce were a fad, it would have faded away like other short-lived business fads. NFTs, quiet quitting and the great resignation — ring a bell?

Instead, companies are doubling down on their flexible workforce. Resume Builder showed that 40% of companies were hiring contractors to replace laid-off workers, while 53% moved full-time workers to contract positions in 2023. Mellow’s data shows this trend continued into 2024.

Later in this article, I’ll explain why freelancers aren’t just a short-term fix but instead a strategic advantage in today’s layoff-prone environment.

Related: Why Good People Are Really Quitting (and How to Keep Them)

Companies are hiring more freelancers

Companies averaged hiring 15 freelancers in this two-year span, making up 8% of their total workforce.

8% is significant. The freelance economy is still relatively young. Although Grand View Partners estimates that global freelance platforms have a 17.7% CAGR for 2025 to 2030, freelancers typically make up less than 1% of a company’s workforce. Freelancers are commonly hidden and coded as temporary workers, part-time consultants or vendor names to avoid confusion or red flags.

Certain industries are leading the way and provide a blueprint that others can follow. Edtech companies averaged 108 freelancers, while advertising companies averaged 34 contractors. The research reports that “it wasn’t unusual to find more freelancers than full time employees.”

Will Edtech and advertising signal what’s in store for other industries?

A Rising tide lifts all boats (geographically)

Every freelancer hired in Mellow’s data was based outside the U.S.

For most Americans, this probably seems alarming, feeling eerily similar to the gutting of the Rust Belt in manufacturing.

But this is just a portion of the story. Mellow is a contractor-of-record for U.S. companies hiring from emerging regions. And when we look at the broader freelance data, we see the bigger picture. Instead of fear, we see freelance as a global trend, with flexible working models as a global standard that Americans can benefit from rather than be replaced by.

Rather than replacing U.S. workers, the shift to flexible work models is creating new opportunities for both businesses and individuals.

This becomes apparent when you look at recent data.

• Leading freelancer finance platform Collective shows an 8.27% YoY increase in revenue for U.S. solopreneurs from 2023 to 2024.
• MBO Partners showed a 103.6% increase in U.S. full-time independent workers from 2020 to 2024 and a 56.6% increase in U.S. independents making over $100,000 USD.
• MBO also showed a 5.45% higher CAGR for the U.S. independent workforce compared to traditional employment. Compare this to full-time stats, and the difference is obvious.

Freelance isn’t about offshoring; it’s about decentralizing work and enabling businesses to be more agile.

Related: How Flexible Talent Is Transforming Consulting

Hiring in Eastern Europe is soaring while Western Europe declines

The biggest winner was Eastern Europe. There was a 106% increase in North American Companies hiring from Poland, Romania and Hungary. If you’ve noticed your entrepreneurial friends booking flights to Poland to visit their development team, this is why.

According to Alex Norovyatkin, Head of Growth for Mellow, “As you can see, more and more companies are hiring Eastern European contractors. There is a perfect balance of workforce cost and skills. This population really wants to work for U.S. companies.”

Other key insights from Mellow’s data:

• MENA saw a 60% increase in hiring from North American companies
• Asia experienced a 39% increase
• Freelancer hiring in the EU dropped by 40%. Norovyatkin cited strict contractor regulations as a reason for the drop.

Return-to-office (RTO) and layoffs will likely increase the freelance workforce

2025 presents an interesting set of challenges for the freelance workforce. A recent Washington Post headline states, “Layoffs hit contractors,” in reference to the U.S. Government. Layoffs also happened across Salesforce, Workday and Walmart this year.

Meanwhile, major corporations like Dell, Amazon, and JPMorgan are enforcing strict RTO mandates.

In both cases, I predict hiring freelancers will increase.

Regarding layoffs, alongside the Resume Builder data above, freelancers are uniquely positioned to succeed in a layoff-prone environment since they’re typically embedded within teams, 30 to 60% cheaper than comparable external talent solutions, and have fewer strings attached, enabling leaders to scale down rather than lay off.

Regarding RTO mandates, freelance isn’t only remote. In fact, in-person freelance models are a fast-growing segment. Spurred by front-line workforce talent platforms specialized in retail, hospitality, and even factory workers, in-person freelance models are solving massive challenges for a traditionally high churn, high burnout, and high-cost workforce.

AI accelerates the need for fractional talent

Gen AI drives demand for fractional AI expertise alongside complementary roles such as web design and research analysis. Mellow’s data indicates a 130% increase in freelance web developer hiring, a 52% increase in programmers, a 50% increase in analysts, and a 28% increase in designers.

AI is also pushing the shift from role-based hiring to skills-based hiring, and talent platforms are ideal for this. Talent Platforms are to recruiting what Uber was to taxi’s. Instead of lengthy resumes and armies of recruiters, talent platforms use tagging, digital networks, and human-in-the-loop recruiters to match exact skill sets with the hiring manager’s exact needs. On average, finding the perfect candidate in 2 to 5 days, at 30-60% cost savings, with expectations met more than 90% of the time.

In both cases, the impact is that rather than maintaining a large, bureaucratic, full time core, companies can operate with a lean team of full-time employees supported by an extensive freelance network.

Embrace freelance to avoid disruption

Talent is no longer just an HR strategy, it’s a core business strategy that business owners, entrepreneurs, and executives must embrace.

The data makes it clear that companies are already embracing flexible work, and the shift isn’t just about cost savings; it’s about responding to digital advances like Agentic AI.

But what if that’s not you? What if you’re an entrepreneur who sticks with a full-time mindset?

Unfortunately, time isn’t on your side, and unlike technological advances before, being late doesn’t mean lower prices; it means being locked out from the best talent. Contrary to the myth of freelancers bouncing from one client to the next, freelancers stick with two to five clients they like, adjusting their workload based on demand. This means that while there is an abundance of freelancers today, there might be a shortage tomorrow, and when that shortage comes, you’ll be locked out. And data shows that this shortage might come sooner than you think.

Have you heard Ernest Hemingway’s famous quote in The Sun Also Rises? When Bill was asked how we went bankrupt, he replied, “Two ways. Gradually, then suddenly.“

Don’t be Bill. You’ve had two years to take gradual steps. Now we’re in the “suddenly,” and companies without a flexible workforce are just waiting for advancements like DeepSeek, macro-economic events like tariffs, or something as random as a competitor product that gets the TikTok algorithm right to be disrupted.

If you’re an entrepreneur, you’re in a lucky place. Rather than worrying about structural change and red tape, you can disrupt “suddenly” by embracing a small full-time core with a large network of freelancers to unlock agility, flexibility, and scalability when you find that hit.