The Freelance Economy and Workforce System Meet in the Bay Area

Author(s): Individual author not identified

Organizational Author(s): Aspen Institute

Funding Source: Charles Stewart Mott Foundation
Joyce Foundation
U.S. Department of Commerce

Resource Availability: Publically available

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Summary

Summarizes the findings from a survey with freelance technology contract workers, focus groups, and interviews with the companies that hire them; and describes strategies that the San Francisco workforce development system is piloting to better serve these “gig” workers under the Workforce Innovation and Opportunity Act.

Description

“Some estimates show that 45 million Americans, or 22 percent of the labor force, are now part of the contingent, on-demand workforce. California’s San Francisco Bay Area is at the forefront of these changes. A sizable portion of its [IRS Form] 1099 freelancers are ‘digital workers’ who are self-employed computer and information technology contractors working for the region’s high-technology companies” (p.1). “[T]he relationship between digital workers and the companies they work for is characterized by reduced job tenures or shorter ‘gigs’—even compared with the dynamism typically associated with employment in the technology sector. In the process, the traditional relationship between employer and worker around skill upgrading is changing, and the nature of skills needed to maintain contract employment is different as well” (p.1).

“Like in many regions across the country, Bay Area leaders note that their local public workforce system…[is] trying to find better ways to adapt and respond to a new worker employer dynamic in the economy….[M]embers of the Bay Area team participating in the Communities that Work Partnership…set out to understand this challenge and explore how the public workforce development system could meet the skills needs of freelancers, and the businesses that hire them, in the region’s [IRS Form] 1099 economy. Their investigation included a survey of [713] freelancers across the Bay Area, meetings and focus groups with business leaders, and a review of learning from previous grant-funded programs targeting skills training for freelancers. The research yielded a number of insights about strategies to serve [IRS Form] 1099 workers and the types of policies that affect the public workforce system’s ability to serve them at scale” (p.1-2).

This is one of seven briefs that documents the work of seven regional partnerships selected to participate in the Communities that Work Partnership initiative.

(Abstractor: Author and Website Staff)

Major Findings & Recommendations

“Results from the survey showed that most…freelancers feel they are ill-prepared for being a ‘business owner’” (p.2-3). “Analysis of [focus groups and interviews with companies] revealed that the companies need more internal capacity and know-how to deal with the work flow and legal complexities of working with freelancers” (p.3). “[C]ompanies also stated that the region needs better mechanisms for developing talent and building the skills of freelance workers in rapidly evolving technology industries” (p.3).

“Similar to many communities, [the San Francisco Office of Economic and Workforce Development is] challenged to develop strategies that are appropriate for contract workers and also allowable within WIOA guidelines” (p.4.) “One approach they are exploring is to build what currently would be identified as ‘occupational skills training’ into shorter-term ‘boot camp’-like training….[This] training presumably would be easier to fund under discretionary formulas because costs could be split into smaller amounts….Another approach under consideration is re-engineering job placement, retention and advancement services that are allowable under WIOA into less formal networking events” (p.4). “Until freelancers ‘count’ in performance measures—either by categorizing them separately, allowing more flexible job ‘placement’ categories, or accepting new types of documentation for successful outcomes—partners are thinking creatively about how to deliver services without [negatively affecting] local WIOA performance measures” (p.4). “A final approach they are considering is for the public system to work more closely with and organize employers that contract with freelancers. For example, workforce boards and their partners could host and help develop opportunities to build the capacity of companies that hire freelancers to employ best practices so that their jobs follow legal requirements and also create stability and good career opportunities for their contract workers. Moreover, workforce boards and their partners could work with multiple businesses to aggregate and share the cost of developing and delivering training needed by the freelance workforce” (p.5).

The brief also details policy changes that stakeholders “noted are needed in order for workforce boards to serve freelancers more effectively” (p.5).

(Abstractor: Author and Website Staff)

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Publication Date: 2016
Posted: 12/8/2017 12:26 PM
Posted In: Workforce System Strategies
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