In tight labor market, 4 in 10 full-time employees are considering the shift to freelancing

With millions more available jobs than unemployed workers, the labor market remains an employee’s game. That picture is reinforced by a new study from Kantata, a professional software development company, which showed that more than 40% of all full-time employees are considering a shift to freelance work, even as management struggles to bring in new full-time workers.

The study, which looked at 1,500 workers across a range of industries and companies in the U.S., compared how full-time workers, independent contractors, and executive leaders viewed their organizations. It found that not only were many full-time workers interested in moving to freelance work, but of those independent contractors surveyed, more than three-fourths worked full-time as little as a year ago. Younger generations were especially likely to have considered freelance work, with more millennials and Gen Z employees saying they’ve thought about becoming independent contractors than haven’t. In comparison, a significant majority of Gen Xers and baby boomers said they had not considered freelance work.

The data suggests that flexibility might be a factor pulling many workers towards freelancing. More than 40% of full-time workers said they envied the freedom granted to freelancers. Almost 60% of employees also said that new shifts to remote work had made independent contractor jobs more attractive.

But respondents noted that stability remained important to them, too. Many full-time workers said their steady paycheck and good benefits were primary motivations for remaining full-time employees. 

Read more: 5 top benefits Gen Z are looking for when job-hunting

These responses can offer clues to leaders dealing with employee retention struggles. More than half of executives said they were experiencing difficulties in hiring full-time employees, according to the survey. Most leaders recognized that benefits were a key factor in employee turnover, with executives citing insufficient healthcare, PTO, and 401k benefits as their primary barriers to hiring full-time workers. 

However, more than half of all leaders believed that their benefits were “above average,” according to the survey. And on some measures, including technology, leaders believed they were receiving employee feedback at a higher rate than employees said they were able to give their opinions.

Overall, the survey noted that full-time employees and senior leadership were in agreement on the main priorities for employee satisfaction, which included better wages, improved healthcare benefits, and updated technology. The survey also found that employees and managers agreed that offering professional development opportunities is essential to improving employee retention.