There are now more freelancers in the workplace than ever before. Last year in the U.S 57 million people, or around 35% of the workforce, worked as freelancers.
This is the result of a number of powerful forces coming together, including technological improvements and increasing standards of living.
In the past, hiring freelancers and managing this relationship was resource-intensive. How do you find the right person? How do you ensure their work is of a consistently high standard? How can you rely on them when they are not a committed member of your team?
Hiring freelancers was anathema, a weakness, particularly when it came to large traditional companies.
Today, technology has enabled us to solve many of these challenges. For example, platforms like Upwork or Freelancer make selecting, hiring and monitoring freelancers a breeze. Solutions such as Mensch allow organizations to manage such a workforce. And organizations of all sizes have come to appreciate the flexibility that freelancers provide them with.
All of this means that the workplace has changed for good, and we’re never going back. The modern workplace has to adjust to these changes. How can it achieve this?
Changes in the Workplace
First, let’s investigate the changes that have occurred in the workplace.
Workplaces themselves have become more distributed, thanks to globalization. It’s not uncommon to have a conference call with team members from Kolkata, Kiev, San Francisco or Sydney (unfortunately technology hasn’t solved the challenge of timezones – yet!). This has somewhat loosened the grip of the “full-time, in-office employee” mindset many organizations held on to.
Workers are now distributed, even if they’re full-time employees – meaning that where an employee is physically located is less important than the work they produce. In other words, one of the biggest arguments against freelancers – that they’re often not physically present within a company’s offices – has fallen away.
Organizations have also come to embrace the benefits that freelancers provide. These include:
- On-demand availability
- Fewer bureaucratic hurdles
- No requirement to grow or manage freelancers
- Quality of work is only performance yardstick
On-demand availability. Instead of having employees sitting idle, freelancers can be used when and if required. Conversely, when employees are swamped, freelancers can be leveraged to take the load off employees during particularly busy or pressurized periods.
Fewer bureaucratic hurdles. When it comes to freelancers, organizations don’t have to worry about insurance or the legal obligations that come with hiring employees. Of course, this issue is hotly debated, especially when it comes to the rights and protection of freelancers – for example, we see this in California’s legal battles with gig economy platforms.
No requirement to grow or manage. While company leaders are not expected to grow the freelancer specifically as they would do with employees, both the freelancer and the organization utilizing their services benefit from setting and achieving goals, and seeing their hard work and planning come to fruition.
Quality of work is only performance yardstick. Factors according to which employees can be measured – such as teamwork, or leadership – are less of a definitive factor when it comes to freelancers. Many freelancers do lead teams or projects, so these attributes are certainly important, but generally speaking the quality of the freelancer’s work is the most important yardstick when it comes to their performance.
The Modern Workplace
There is, of course, the valid argument that taking on freelancers negatively affects company culture, which in turn has a massive long-term impact on the organization itself. This is a challenge that the modern workplace is struggling to deal with.
In addition, as freelancers opt for a digital nomad lifestyle – and manage risk by taking on a diverse client set – full-time employees are casting a questioning eye in their direction, wondering what their future holds as employees, and why exactly they’re choosing to remain so.
Organizations themselves have had to step up their game to ensure full-time employees are made to feel fulfilled, motivated and committed. They also have to offer an environment that’s attractive for new talent.
All of this means that today’s workplace consists of a hybrid workforce; full-time employees alongside freelancers in almost every department. HR, Finance and other departments have to manage this hybrid workforce, which poses a massive challenge.
How Organizations Are Adapting
Organizations have had to adapt to the challenges an increase in freelancers pose:
- Effectively managing freelancers
- Keeping employees engaged
- Managing company-wide changes
Effectively managing freelancers. This falls on senior leadership, HR, and Finance departments primarily, along with the specific departments in which the freelancers are engaged. For example, when it comes to freelancers, the Finance department, and ultimately the CFO, have to approve payments, understand who needs to be paid, ensure that work was delivered and that no duplicate or fictitious payments are taking place.
HR may have to ensure that freelancer contracts are up to date and fully compliant with legal requirements and that the lines between employees and freelancers aren’t being blurred.
Keeping employees engaged. Another critical function of HR in this environment is ensuring current – and future – employees are engaged, committed and happy. As we’ve seen, this can be trying when there are a large number of freelancers around. It increases the responsibility of HR and departmental- and company leadership to offer employees growth, validation, and fulfillment.
Managing company-wide changes. Ultimately, it’s the organization itself, a composite of all the relevant leadership levels, that has to establish their strategy vis-à-vis freelancers. A big part of this is managing the percentage of freelancers on board, being completely on top of departmental headcounts, and constantly keeping a finger on the organizational pulse.
Keeping Your Finger On The Workplace Pulse
This last point is where Mensch comes in. Mensch is the first Human Capital Management solution that unites HR with Finance and Management. It provides visibility into the organization itself and allows data-driven decision making at all levels.
The platform enables the empowerment of HR teams with the technology to effectively manage the organization and provides HR teams with the tools to interface with company leadership and shape strategy. In a changing modern workplace, it’s simply a must-have for any HR department. Want to find out more? Get in touch with Mensch.