4 Things Recruiters Need to Know About the Freelance Economy

Feb172016

The use of interims and freelancers is rising. Hiring managers, HR teams and recruiters are increasingly supplementing and enhancing the skills and expertise of their workforce by engaging independent contractors on either a project basis, or in a longer term arrangement. Recent US research showed almost 60% of businesses using flexible workers for more than six months at a time.

We have got used to a number of different definitions covering non-permanent employees. In the recruitment industry we have been supplying temporary and interim workers for many years, but now a large number of clients are also looking to use a range of freelancers. Traditional temps tend to be hired to cover a role for a period of time whereas freelancers will usually supplement the existing skills to execute a particular project, and will quite often have their own networks to leverage for work opportunities. 

Freelancers and independent contractors are part of the growing trend referred to as the ‘gig economy’. This usually denotes individuals who offer their time and skills (either to create a supplementary income stream or to fit in around other projects) and are usually engaged through an app, or a platform. The commitment to the entity, or individual, engaging them is purely task focused. The most common examples offered are usually apps like Uber, which offer individual peer-to-peer services, but there are a growing number of platforms aimed at the corporate market, matching hourly workers with businesses that need short-term support. There are also platforms that now enable the hiring company to directly manage the administration of its entire non-permanent workforce.

The business need for freelance, temporary and interim help is clear. Flexible staffing solutions can offer more effective cost management, particularly on an individual project basis, whilst skills and resourcing gaps can be covered quickly. As the commercial landscape evolves, necessary capabilities and knowledge may not be available in the business, but are likely to be needed urgently to help respond to shifting trading conditions and client demands.

Freelance workers can help with business growth, offering a cost effective and experienced staffing solution to help scale a new area or service offering, before wider investment is made. Sector specialists with a broad range of working experiences, who are not part of a specific organisational structure, may also be able to offer insight and broader commercial advice, whilst supporting technical and strategic decision-making.

Many recruiters, both agency and in-house, will begin to find themselves interacting more with the freelance economy. There are certain basic considerations to be taken into account, such as who is responsible for acquiring them - HR, hiring manager or procurement - and how they will be on-boarded and assimilated into the business. 

It is also important to understand the some differences between freelancers and traditional temps. The former tend to be engaged and managed on a project basis with terms and deliverables agreed in advance. Temps will usually be engaged through, and managed by, an intermediary and will be covering a role or helping to fulfil delivery requirements. 

Here are 4 things that recruiters should know:

Freelancers are relationship driven

Whilst much of the narrative around freelance working tends to focus on millennials, recent US research indicated that the main demographic likely to be an independent contractor are the age range 35-55 - mid career, more experienced and usually able to offer a broader perspective. These workers tend not to operate in isolation; they will have personal and professional networks that extend through college, previous employments and projects. They will usually support each other, helping out with referrals, and possibly introductions. Word of mouth is a big driver; so if you intend to establish your business as a user of the freelance economy then treat them well as poor reputations spread quickly.

Project scope and accountability

The freelancers you hire will be professional, loyal to their skills and protective of their own reputations, as many of the new technologies allow the engaging business to rate their independent worker. To get the best out of your freelance support you will need to ensure they are properly briefed, with their remit fully scoped out. They will need to know deliverables and timescales, their own accountabilities, and the internal networks that they will operate within. 

Market is competitive

Good independent workers are, unsurprisingly, much in demand. It would be a costly mistake for an engaging business to assume that their freelancer will be ‘grateful’ for the work and have few other options. Many will be juggling assignments and requests - after all they are responsible for their own cash flow, skill enhancement and knowledge - so attempts to stall negotiations, or ‘lowball’ on offers are unlikely to stimulate their interest. Without two way commitment your organisation is unlikely to get the full benefit of productive independent contractors so its best to know in advance who is responsible for engaging them, making sure that they are fully aware of market trends and rates. A recent article in Fast Company suggested that the role of 'Chief Freelance Relationship Officer’ will soon become a reality for many companies, so it’s worthwhile to start adopting that mind-set now.

Employer brand

Most companies are protective of their employer brands, ensuring they are seen as great places to work, with an attractive culture, aspirational vision and values, and offering opportunities for personal and professional development. It would be a mistake to assume that employer brand is only about permanent employees though. Some labour market forecasters estimate that up to 50% of the workforce could be freelance, or non-permanent, within the next 5 to 10 years, whilst growing numbers of entries on company review sites come from people who have been contractors. The way that freelancers are engaged, briefed, supported and paid will begin to impact the overall way you are perceived as a place to work.

Independent contractors may not work in traditional offices, nor be subject to a company’s structures and talent management processes, but its wrong to assume that they are totally separate from the permanent workforce. They are very much a part of the staffing ecosystem, hence recruiters and HR professionals need to understand how to engage and get the best from them, whilst preserving their reputation. Contractors may be able to provide services in the future, refer other contractors or employees to the organisation, and are just as much a potential advocate for the business as any permanent employee.

This entry was posted on Wednesday, February 17th, 2016 by:

Mervyn Dinnen

Mervyn Dinnen is a content creator and social engagement strategist for the Recruitment and HR sectors. He is an award winning blogger who writes regularly for digital sites, and reports from HR Technology conferences in Europe and the US. He is also a regular speaker and chairman at a number of HR and Recruitment events.

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