1099 Insights
November 22, 2021

2022 Trend Report for Independent Contractors

Claire Davidson
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“Independent contractor” used to be a niche term—now, it represents a huge portion of the workforce. Accelerated by an ongoing pandemic and the overarching desire for greater work flexibility, more people than ever have left traditional 9-5 roles in favor of striking out on their own. Each 1099 contractor essentially operates their own business, from beauty bloggers and dog walkers to delivery drivers and on-demand grocery shoppers. And the growth of these segments in recent years is only expected to continue, making it essential to understand what these workers want in the years to come.

As we look to the future of this growing labor sector, here are the emerging trends to watch for—and how you can attract and retain more independent contractors in 2022.

Online creators will seek better financial tools and technology 

The growth of the gig economy, a switch to remote-first work, and the continued surge of social media all created a perfect storm for a new economy to grow even faster—one made up of online creators. 

The creator economy consists of influencers and other creatives who monetize their content online. They leverage the clout they’ve built with their social media audiences to help market or sell products. This includes everyone from food bloggers on Instagram to makeup artists on Youtube and live-streamers on Twitch. (It’s even seen in the music industry as streaming service Tidal announced a new direct-to-artist payment model.) The growth of this industry has been monumental so far—its total size is estimated at a little over $100 billion dollars—and that growth is expected to continue in 2022.

Online creators are gaining more traction than ever as consumers and companies realize people want to connect with real individuals instead of faceless brands. If you want to leverage creators for your business, you’re up against some steep competition—not only from other brands or platforms, but from creators themselves—many of whom are seeking more control over their audiences and monetization

Attraction & retention tip 💡

Many of these contractors are frustrated at the length of time it takes to get paid for a campaign. Because typical invoice periods for creators and influencers can get a bit lengthy (sometimes upwards of 90 days), providing faster payouts to these contractors can give your company or platform a competitive edge.

Demand for last-mile delivery will continue to rise

During the past two years of the pandemic, online spending skyrocketed. In fact, according to Total Retail, online spending in the U.S. jumped 44 percent last year, making 2020 the year with the highest annual e-commerce growth in two decades. With such a jump in online buying, companies have had to equip themselves with ample delivery drivers to meet demand—particularly last-mile delivery drivers. 

Last mile delivery refers to the final step of the delivery journey when a courier brings a customer their order. (Think of last-mile pioneers like UPS, FedEx, or Amazon.) Now, however, it’s not just legacy companies like FedEx who employ last-mile delivery drivers. New and emerging last-mile startups also hire delivery drivers for their work with different vendors, from Walmart to local grocery stores and everything in between.

The intense growth of last-mile delivery is expected to continue, with the global last mile delivery market size on track to reach 200 billion in revenue by 2027—but the amount of available last-mile drivers is struggling to keep up with demand. Because of this, platforms will need to offer compelling benefits to attract and retain these drivers. 

Attraction & retention tip 💡

Last-mile delivery drivers essentially operate their own small businesses. They have a lot of upfront expenses such as providing their own vehicles and paying for fuel for their trips. Because of this, they often struggle with cash flow constraints. Contracting companies that want to keep these drivers satisfied will have to go the extra mile (yes, pun intended) to improve their financial situation, whether that’s helping them cover those upfront costs or providing faster payments and reimbursements to improve cash flow.

Gig & staffing platforms will help fill the gaps for freelancers

The term “freelancer” is another way to refer to an independent contractor—but the term is more commonly used to refer to people who have more than one job at a time. For example, someone might have a W2 job and also freelance on the side as a content writer or handyman. Or, they might have multiple freelancing jobs at once. This differs from an independent contractor who, for example, does last-mile delivery and owns and operates their own small business full-time. 

There's been an increase in gig and staffing platforms dedicated to helping freelancers find work in recent years, as new types of freelancing jobs emerge. For example, industries like marketing and software development have Upwork or Fiverr, both of which make it easy to hire someone for a quick content or technical job. Sites like TaskRabbit do the same for people looking for help with everything from yard work to furniture assembly; and Rover makes it easy to find someone to look after your pet. 

According to the 2020 Independent Workforce Report from Upwork, 59 million Americans now freelance to some degree, and 36% of freelancers now do so full-time—an 8% increase from the previous year. As more new freelancing jobs are created, these platforms will continue to grow as more people flock to freelancing as either a side hustle or a way to carve out a portfolio of clients on their own. 

Attraction & retention tip 💡

With the ongoing labor shortage, many companies have started turning to gig and staffing platforms to help fill open positions. Turning to freelancers can be a smart way to find people who are flexible enough to take on side-projects but still experts in their field. 

Contractors in control

The growth of the creator economy, last-mile delivery, and 1099 staffing platforms all represent the changing landscape of how we work today. Independent contractors are seeking (and gaining) greater control over when they work and how they get paid. As such, keeping them satisfied and supporting them on their journey as business owners will be increasingly important in the years to come. Platforms that can offer greater flexibility and faster payments to contractors—whether they’re online creators, last-mile delivery drivers, or freelancers—will have the upper hand in 2022 and beyond. 

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