The Independent Workforce Is Here to Stay. HR Leaders Can Use HRTech to Leverage Them

By Teresa Creech On Nov 5, 2025

The world of work has been transforming for some time. Independent workers are no longer a side story in the labor market, as demographics and their preferences change. In fact, 72.7 million Americans now choose independent work over traditional full- or part-time roles, making it the fastest-growing segment of the workforce.

For HR leaders, the implications are clear: If you’re not planning for and investing in strategies to attract and manage independent talent, you risk falling behind. At the same time, enterprises are struggling to adapt to this changing workforce landscape. Legacy models are designed to consider full-time employees and often overlook or mishandle freelancers, contractors, and project-based professionals. Without the right HRtech infrastructure, companies face rising costs, compliance risks, and missed opportunities to engage the right workers.

So, what should HR and business leaders do? The answer lies in HR technology that enables organizations to take the entirety of the workforce into consideration.

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Why Workers Are Choosing Independence

First, let’s dive into the why behind this change. It’s both structural and cultural. The fact is, traditional employment has lost much of its security. Pensions are mostly gone. Layoffs are common, with 40% of Americans experiencing a layoff at some point. And career ladders are less stable than they once were, with more than half of workers (61%) believing career stability to be a myth.

For many, independence isn’t just about flexibility, but also about security and control. Research shows that millions of professionals are moving into freelancing because they prefer the autonomy it offers, with more than 5.6 million independents now earning $100,000 or more annually, which is nearly double the amount it was in 2020.

Gen Z is leading the charge here, as more than half (52%) say they have side hustles and consulting projects. This generational shift reinforces that organizations need to change in order to engage with younger workers – or risk losing out as older employees age out of the workforce.

The Enterprise Blind Spot

While workers are forging their own paths, many enterprises remain stuck in outdated workforce planning. HR leaders often lack visibility into who these workers are, how much they cost, or even whether they’re properly classified. This so-called “shadow workforce” creates blind spots in compliance, budgeting, and strategy.

The risks are real. With 45% of U.S. hiring managers saying they can’t find qualified people for empty roles at their companies, contingent workers could fill those gaps, ensuring crucial work gets done efficiently without putting extra burden on existing employees. Meanwhile, misclassification lawsuits can cost companies millions, and inconsistent contractor management leaves organizations vulnerable to fines and reputational damage.

Put simply, if HR leaders want to keep up – and keep costs down – they need visibility into their entire workforce.

HR Technology Helps You See the Whole Picture

The good news is that HR technology platforms are rising to meet these challenges. Vendor Management Systems (VMS) give enterprises control over procuring and managing the extended workforce. Going one step further, an AI-enabled VMS can transform how companies source, manage, and optimize contingent labor.

Data-Driven Insights: A mature VMS platform can help HR teams benchmark rates for specific skills, reducing overspending. For example, a VMS can be used to source talent in different geographies where costs may be lower.
More Efficient Hiring: AI can help reduce hiring cycles from months to weeks by automating resume reviews, interview scheduling, and onboarding. This can help lower cost per hire by as much as 30%.
Skills-Based Matching: Instead of focusing on job titles, AI-powered systems can align candidates with projects based on their actual skills and desired outcomes. This model can help enterprises fill niche gaps more effectively.
Compliance at Scale: AI-enabled compliance checks help HR teams proactively address risks around worker classification, pay equity, and tenure. This helps organizations reduce financial penalties and legal exposure.

Ultimately, a comprehensive VMS helps organizations reduce friction in their hiring practices, centralize visibility of the extended workforce, and integrate independent workers strategically alongside full-time employees, rather than treating them as afterthoughts.

The Road Ahead

As the independent workforce continues to grow, so, too, does the skills gap for full-time employees. The World Economic Forum estimates 39% of existing skill sets will need to change or become outdated over the next five years.

This speaks to the need to adopt a skills-based approach to worker engagement moving forward – regardless of full-time or contingent status, geographic location, or other factors that previously hindered these practices. Adopting an open approach to engaging talent of all types can help enterprises fill crucial skill gaps, keep costs down, and reduce risk.

Deep integration of independents into workforce strategy is the first step to ensuring your HR strategy stays relevant for the years to come. Those who embrace data, AI, and HRtech platforms designed for the extended workforce will unlock agility, innovation, and resilience – while those who cling to legacy systems and outdated job models could be left in the dust. If the future of work is a mixture of independent and in-house, the enterprises that harness HR technology to manage this shift will win.

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