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Why Freelancers Are Winning the AI Race and Businesses Are Missing Out

A highly adaptive workforce that’s ready to meet the demands of the future is readily available, but HR departments are overlooking it.

Emma AscottbyEmma Ascott
February 7, 2025
in Leadership
Reading Time: 5 mins read
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Why Freelancers Are Winning the AI Race and Businesses Are Missing Out

One expert says businesses and HR must adapt, as traditional metrics like degrees are no longer sufficient in an AI-driven world.

  • AI is impacting every field, from marketing to healthcare. Freelancers are quickly adapting, leveraging AI to stay competitive and meet growing demand.
  • Companies are missing out on freelancers who offer specialized, flexible talent well-suited for today’s changing market.
  • Traditional hiring methods are outdated, and HR needs to focus on real-world skills and adaptability to meet the demands of a tech-driven workplace.

This article is based on the Allwork.Space Future of Work Podcast episode featuring Dr. Kelly Monahan, founder of the Upwork Research Institute. Click here to listen to the full episode.

The rapid rise of new AI technologies has made it clear that workers need to adapt, quickly. But the way workers are adapting—and how they’re finding success—could change everything.

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According to Dr. Kelly Monahan, founder of the Upwork Research Institute, the current technological changes feel different than those of the past, particularly with how they fit into the broader picture of technology, education, and work. Monahan joined The Allwork.Space Future of Work Podcast to expand on these changes. 

How AI is Pushing Traditional Jobs to the Sidelines

Previous breakthroughs, like cloud computing and automation, mainly impacted fields like IT and software engineering. But with generative AI now taking center stage, its influence is reaching across every sector. 

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Monahan believes that one of the most fascinating things about today’s world of work is how AI isn’t just affecting the tech field — it’s spreading across industries, forcing marketers, writers, translators, and even project managers to get familiar with new tools. 

So, it’s not just the engineers who need to adapt. If you’re in a creative field, you’re likely already using AI to create content, refine your ideas, or even generate leads. 

For many workers, this reality involves rethinking what it means to stay relevant. The ability to learn new skills, quickly and consistently, is now more important than ever, according to Monahan. 

The demand for people who can integrate AI into their skill set is booming, and freelancers are in a prime position to take advantage of this demand.

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Freelance work is structured in a way that allows for quick adaptation, letting freelancers adjust their offerings and integrate new AI tools with ease. 

Freelancers, especially those using platforms like Upwork, are already refining their skill sets to keep pace with demand. 

As Monahan puts it, workers need to develop a “learning how to learn” mindset—an agility that helps them stay competitive in a world where job demands are constantly changing.

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Forget the Degree — Freelancers Hold the Key to Closing the Skills Gap

What’s clear is that the traditional pathways of education and hiring are no longer the best indicators of skill. More employers are focusing on experience and specific skill sets rather than degrees. 

For many, this move toward skills-based hiring makes sense, especially in fields like tech, where working with AI and other specialized tools is a must, Monahan said.

But here’s the thing: This isn’t just a “tech” issue. It’s a skills issue. More specifically, a skills gap. 

The question isn’t just about having the right education or credentials anymore. It’s about having the right skills to meet the needs of a quickly changing market. And that’s where freelancing has an edge.

Many companies and executives are still operating under the assumption that hiring full-time workers is the best way to fill the skills gap. But this isn’t true. 

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In fact, the skills gap could be a self-inflicted wound by companies that are ignoring the growing pool of talented freelancers.

In fact, the skills gap could be a self-inflicted wound by companies that are ignoring the growing pool of talented freelancers. Why? Because freelancing is flexible, diverse, and increasingly specialized. 

It’s not just about temporary workers filling gaps — it’s about freelancers bringing unique expertise to the table in a way that’s often more in tune with what the market demands.

Take, for example, some of the growing sectors within the freelancer space. 

Construction, for instance, isn’t just about physical labor anymore. Project management and engineering are increasingly flexible, with remote options for managing tasks, leveraging technology, and working with teams. The same trend is happening in healthcare, where medical professionals are starting to work alongside robotics. 

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These aren’t traditional “blue-collar” or “white-collar” jobs — they fall into what some are calling the gray collar space, and it’s this emerging category that’s growing fast within the freelancing world.

HR Needs to Ditch Outdated Metrics in the Age of AI

Businesses and HR departments have to catch up. Right now, many are still relying on degrees and traditional work structures to assess candidates, but these old metrics are no longer as reliable. 

As AI continues to shape job roles, HR will need to get smarter about evaluating skills — understanding not just what someone can do today, but how they can integrate with technology and adapt to new tools.

And this, Monahan argues, is a huge challenge for HR departments. They can’t rely on outdated methods or systems to determine what skills are needed and how to match them to the right people. 

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The advent of AI and the changing expectations around work mean that HR needs to develop a deeper understanding of how people can contribute to their organization, no matter how they came by their skills. 

“It’s essential leadership competencies and capabilities right now that we believe are necessary to navigate the future of work,” she said.

Companies need to recognize that the future of work won’t look like it did before. Freelancers are not just a temporary solution, because they’re shaping the future. 

The growing freelance economy is a crucial piece in addressing the skills gap that many companies face today.

Traditional hiring methods often overlook the diverse and specialized talent within the freelance workforce.

Traditional hiring methods often overlook the diverse and specialized talent within the freelance workforce, and once HR teams and executives shift their focus to include freelancers as part of their talent strategy, they can unlock a much wider pool of skills and expertise — skills that are increasingly relevant. 

Embracing this new approach will not only help companies fill critical gaps but also tap into a flexible and highly adaptive workforce that’s ready to meet the demands of the future.

 

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Tags: AIFUTURE OF WORK® PodcastHuman Resources (HR)Technology
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Emma Ascott

Emma Ascott

Emma Ascott is a contributing writer for Allwork.Space based in Phoenix, Arizona. She graduated from Walter Cronkite at Arizona State University with a bachelor’s degree in journalism and mass communication in 2021. Emma has written about a multitude of topics, such as the future of work, politics, social justice, money, tech, government meetings, breaking news and healthcare.

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