If freelancers are not a part of your workforce, it’s really time to rethink talent strategies. With as many as 162 million independents in Europe and the U.S. alone (according to McKinsey), they represent one of the fastest-growing segments of the labor market. Aided by technology, shifting attitudes and a corporate desire to reduce talent costs, the freelance economy will become increasingly crucial to every organization, including yours.
A recent study conducted by U.S.-based Freelancer Union estimates up to 35% of the country’s workers are conducting freelance work, generating about $1 trillion in revenues. And McKinsey additionally notes that the percentage of freelance workers in Spain and France are nearly as high at 31% and 30%, respectively. In Asia, growth of the Indian market is rising so rapidly that it is now considered a global talent hub for independent workers.
Why should you care if your company uses little or no independent talent? According to Randstad Sourceright’s 2016 Q4 Talent Intelligence Outlook report, 70% of human capital leaders surveyed worldwide said utilizing freelancers is affecting their business, and half say the freelance economy is influencing their business.
Freelancers must become part of your talent strategy if you hope to remain competitive. Today, many workers enthusiastically embrace a freelancer lifestyle, valuing its flexibility and engaging work content. Companies also benefit because they get easy access to high-quality skills without the fixed overheads associated with hiring employees. Also, rapid growth in the number of freelance portals means the elimination of geographic barriers when it comes to acquiring talent. Finally, freelancers could serve as a rich talent pool from which to source permanent hires. All these developments are connecting workers with employers like never before. For you, it means added agility and a business advantage.
Integrating this class of workers may be challenging, however. In many organizations, engaging independents tends to be an ad hoc process left up to each hiring manager. That means lack of consistency in requisitioning, vetting and tracking workers that may be on or off site. Furthermore, reporting is often decentralized and opaque to corporate talent leaders. At any time, a company may use thousands of gig workers, but neither HR nor procurement is aware of this. That can lead to regulatory compliance issues, potential security problems and payment complications.
How can you optimize your workforce with the addition of freelancers while mitigating risks? Keep in mind these critical questions when working with independents:
Does it make business sense?
The most important criteria is whether using independents will deliver the best business outcome. This means taking a critical look at each role and possibly working with a talent advisor who can draw on experience to help answer the question. The consideration shouldn’t be limited to just project-based or part-time roles. Even permanent, full-time positions may be addressed by one or more freelancers.
Do you have a reportable, compliant process?
The key to effective integration of freelancers into your workforce is gaining visibility and centralized management. Without visibility and consistent controls in place, employers can’t possibly track and manage these workers, which could potentially put them at risk. Issues include security, pay rate consistency, performance evaluation, invoicing and others. The use of Freelancer Management Systems (FMS) may help integrate their administration in Vendor Management Systems (VMS).
How do I find the best-fitting talent for my particular need?
Today, many freelancer portals provide a wealth of skills in many markets. There are all-purpose sites that offer every kind of skill (Twago and Upwork) and niche-directed portals. Need a marketing designer? 99 Designs may be the way to go. How about legal help? Custom Counsel provides a menu of freelance services. Vetting which portal is right for you will accelerate access to qualified independents. How do I incorporate freelancers into my talent strategy? This may be the most challenging aspect of leveraging independents. Every organization has unique needs and circumstances, so consulting with internal stakeholders to understand their functional needs will enable a clearer picture of how freelance resources can address them. You can also partner with a Managed Services Provider (MSP) to optimize integration.
With the freelance economy growing at warp speed, employers must take a serious look at how it affects business and talent resources. As part of a dynamic set of changes shaping the world of work, it will inevitably affect your ability to deliver resources and compete. To learn more about today’s most important workforce developments, request your copy of the Randstad Sourceright 2017 Talent Trends Report now.
About the Author
Scott Fraleigh is President of Randstad Sourceright’s Managed Services Provider and Payrolling & Independent Contractor Solutions lines of business in North America. Scott has nearly 20 years of proven success in building and managing profitable businesses, with deep expertise in strategic managed services provider programs and extensive experience in HR, recruiting and staffing. Scott holds a Degree in Human Resource Management from the New York Institute.Follow on Twitter More Content by Scott Fraleigh