How to Manage Freelancers
Originally written by our Founder & CEO for Management Today, appears in Management Today 20 December 2016
The job for life is quickly becoming obsolete, and for today’s market, that makes sense. We are entering a period of work which is more fluid, fast-paced and tailored to the individual than ever before.
A recent report from McKinsey showed that 20 to 30 percent of the working-age population in the United States and the EU, or up to 162 million individuals, engage in independent work. The large majority of independent workers (70%) are getting great satisfaction from working this way.
Why wouldn’t they? These workers have the independence to choose projects and employers according to that which suits their skills, availability or interests. Similarly, businesses are able to deploy teams of specialists quickly onto projects — enabling greater innovation and agility than ever before.
This means employers face a significant shift in how they manage the people they work with. On the one hand this is about practices and employment laws — some of which are very well reported in the media — understanding the classification, compliance and tax regulations that go alongside hiring contingent workers.
But it will also be about culture fit and reputation — as the best independent workers are able to pick and choose they work with, it will become a seller’s market and businesses will have to work harder to attract the best talent.
So how can we, as business leaders, compete in this new world of work and what’s more — how can we foster trust and loyalty in a world where workers can move roles at the blink of an eye?
It’s All About The Relationships
In a traditional business, we have a central hub of information about everyone that works for us — HR. When it comes to independent workers, that isn’t the case. My business Kalo, allows businesses to manage their freelance workforce, and across the thousands of employers using our software we can see that less that 1% actually work in HR. That should be a red flag for businesses looking to hire more independent workers in the future.
More often than not, relationships and the information about independent workers is restricted to one person or team that worked directly with them. These people might be storing freelancers’ information on email, on sticky notes, and spreadsheets — if they write down their details at all. Those relationships are weak, information falls through the cracks and vital insight about the freelancer for example, how much they charge, whether they produced work on time or how well they communicated is simply not stored for the future or accessible throughout the business.
As businesses begin to hire more and more freelancers, this could quickly become a disaster. Data about the talent you hire will be vital not only for organisation but also protecting your relationships with them. By forging strong connections with freelancers throughout the business you will instil loyalty and ensure that any engagement becomes less transactional and more meaningful over time.
A Strategy For Your Freelance Workforce
Beyond that — businesses need to establish a strategy of how they want to work with freelancers and what they might offer that others can’t. If the social contract is dead, and workers are forgoing the benefits of pensions and life-long employment for freedom and job satisfaction, businesses will need to find new ways to manage freelancers in a way that is mutually beneficial.
Businesses will need to establish a strategy for how they work with their contingent workforce and in most cases, employ someone to manage it. Do you want freelancers in-house or working remotely, what are your payment terms, onboarding processes, how do you brief them — all the these elements will impact the relationship with an individual and the loyalty they feel for your business.
Understanding how contingent workers differ from your full-time staff and implementing ways to support them, for example by introducing easily accessible and flexible communication methods — will be key.
Employers need to give freelancers a reason to be loyal and that means treating them well. One bad experience and your name could be tarnished — word spreads fast within these networks of independent workers.
Getting The Culture Fit Right
One similarity between hiring full-time staff and freelancers that is often forgotten is culture fit. At Kalo, in a ranking of what our employers see as most important, culture is consistently more important than price. That’s because, as businesses which employ large numbers of freelancers, they know that hiring someone that ‘gets’ the business will make the entire relationship seamless and more productive.
Most businesses understand the importance of culture but with a short-term, freelance worker, it is even more vital to establish an immediate connection and understanding. Being able to articulate the ‘why’ behind what you’re doing has never been more important — put it in your briefs to freelancers and make it part of the interview process.
Freelancers are looking for culture fit too. Of course many will be attracted to a healthy day rate, or once-in-a-lifetime brief but they will also want to work for businesses that they fit into and believe in. That is what will breed loyalty and make them want to work for you again.
Respect and Understanding Breeds Loyalty
So what does all this mean? If we are all going to be hiring more freelancers in the future, and we want to develop strong relationships with them, we need to see them less as an ‘add-on’ or quick-fix and more as a fundamental driver of growth and innovation.
Businesses must treat freelancers with respect, understanding how they work and ultimately, adapting business practices to accommodate them. If employers understand the priorities and driving forces of this new world of work and adapt their business to it, they will be primed to seize the opportunities.
