Too often, organizations consider freelancers an optional extra, recruited at short notice, fulfilling narrow roles, distant from the strategic direction of the company. Consequently the growing freelance talent pool remains underutilized and often mismanaged, just when freelancing is becoming standard employment for millions around the world.
Harvard Business Review Analyst Services and Fiverr research reveals freelancers are doing around 20% of the work in US-based businesses. By 2027, freelancers are projected to outsize the full-time workforce in the country. Likewise, a recent survey of UK businesses reveals four in ten are currently working with freelancers, with 60% saying that working with freelancers has helped employees both address and avoid burnout in 2023.
Although the 2023 Harvard Business Review study finds 81% of respondents citing freelancers as important to their organization, only 38% say their organization is very effective at managing them. 45% of the surveyed companies lack a comprehensive strategy for engaging freelancers. This is to the detriment of the business seeking to utilize outside talent. If employers are to respond to their growing talent base, then they must better identify and utilize freelancers. This can be done in the following ways:
Create a chief freelance officer
One of the biggest challenges facing HR teams is they are predominantly focused on full time employees only, but in terms of freelancers, this responsibility usually falls to a specific team lead. This can result in ineffective recruitment and talent management within the business. When considering whether to employ freelancers, the main challenge in the survey, cited by 49% of respondents, was finding freelancers with the right skills. A dedicated Chief Freelance Officer to recruit and manage freelancers will be better equipped to find and optimize external talent. The ‘CFO’ would also implement strategies to integrate freelancers within their workforce, championing their role to the C-Suite. This would get the most value out of a freelancer, align them with the strategic direction of their host organization, and better enable their performance to be measured.
Championing processes and technology
Typically businesses will need a software on demand SaaS solution that gives them control over their entire freelance workforce by allowing them to source, hire, onboard, manage and pay freelancers while ensuring regulatory compliance to maximize business growth. And by using AI, organizations can monitor relationships with freelancers, including the validity of legal documents, enabling the Chief Freelance Officer to mitigate the risk of worker misclassification.
Attract talent, ensuring their success while measuring your ROI
Labor is often the largest cost to any business, with Deloitte estimating it accounts for between 50-70% of company spending. A cost effective talent management strategy is crucial. The best talent management strategy will align company goals with the abilities and development objectives of the talent. A Chief Freelance Officer will harmonize these requirements and identify the skills gaps that must be addressed. In closing the skills gap the CFO will often decide between expanding the talent pool or offering more flexible work engagements. Increasingly, this will be one of the same, and HRs must consider all their employees to be freelancers.
The future
Freelancing will become more prevalent in a dynamic jobs market, characterized by remote working, economic uncertainty and an appetite among younger professionals to supplement their income with multiple jobs and passion projects.
The popularity of the side hustle is particularly evident among Gen Z, with platforms such as TikTok enabling such projects to be monetized. A February 2023 global survey of 10,000 workers by Kantar shows 40% of Gen Z workers are combining at least two job roles.
Explaining this generational preference, Caitlin Duffy, director of research at Gartner said: “Career paths are becoming less linear…young workers are entering a turbulent work environment: they want to set themselves up for long-term employability, remain flexible and be able to move between work places.”
This description could now be applied across the generations, but Generation Z will swell the workforce. Therefore freelancing will become more central to organizations, driven by new entrants to the workforce, established freelancers or those who, post pandemic, became used to greater autonomy and remote working. Through preference or through market forces, everyone is becoming a freelancer.
Yet a poorly managed team, regardless of the staffing mix, will yield poor results. It’s time to redesign management structures to optimize the new workforce, be that new entrants into employment or established freelancers. There’s much to look forward to in the new talent landscape and a dedicated Chief Freelance Officer would be ideally suited to maximize external expertise in the years ahead.
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