In Part One, we explored the macro changes affecting the freelance movement and why it’s critical to align your organizational Why with your freelance program. In Part Two, we’ll outline a four-step process for realizing the benefits of hiring freelancers.
According to research conducted by the Oxford Internet Institute, there are three main motivations for adopting a freelance program that includes sourcing talent platforms:
- It’s an easy way to access a source of scalable experts and skills.
- The costs are lower compared to traditional vendors and outsourcing agencies.
- “Geographical, informational, and administrative” hiring barriers are eliminated.
Oxford’s research also found that amongst the agencies studied, the quality of work performed by platform talent usually equaled or exceeded that delivered by traditional staffing provider talent. “A lot of assumptions are being made about why companies adopt online labor platforms, why they adopt these new ways of working with external talent,” says Greetje F. Corporaal, a postdoctoral researcher at the Oxford Internet Institute. “The predominant assumption is that it's for cost reasons... that it's problematic, and neither of them is true.”
This is why many enterprise businesses work with a Managed Service Provider (MSP). MSPs usually state that they have an Independent Contractor (IC) or Freelance program. Unfortunately, what the MSP is suggesting is more about worker classification compliance than finding the best talent. If a company (the MSP’s client) wants to bring a freelancer onboard, the MSP will vet the freelancer as an IC, but they are not likely to be doing much else in terms of finding and curating a pool of talented freelancers.
Most MSP IC solutions use a manager’s network—the client’s network—to determine who is available. However, they are not tapping into the thousands of other people who could be potentially qualified for the job. They are not determining if the freelancer in the manager’s network is the best freelancer in the market to help with the project. According to Spanier, “They’re missing the mark because they don’t have a sourcing channel for going after the people in that pool.”
What’s the answer? Create a comprehensive, organization-wide freelance program.
Step 1: Identify Key Stakeholders and Overcome Internal Resistance
Begin by asking the question, who will interact with the freelancers? These are the key stakeholders and the ones that will be most likely to question the need for hiring freelance talent. In most cases, the answer is line managers, human resources (HR), and/or Procurement.
Next, look at things from the stakeholders’ point of view:
- Executive team: Thinking big-picture. How does the freelance program affect or add to the organizational Why?
- Line managers: Concerned with getting things done. The goal is to complete a task in a timely, cost-effective manner without any hassle.
- HR: They’re focused on the big picture of the talent strategy, staffing plans, and budgets. They answer the “what are the business needs?” question with talent.
- Procurement: Contractual point of view. They need to understand the space in order to write the contracts effectively. They also are key to evolving processes and compliance practices to support a freelance program.
- Corporate lawyers: Concerned with maintaining the company’s legal compliance. Are the freelancers’ contracts ironclad?
Every organization has its own history to navigate, and creating lasting change takes time and patience. Those who are in charge of getting the job done may be skeptical that hiring outside talent will allow them to do so. Others may worry that freelancers will come in and replace them, leaving them without a job. Procurement may be concerned about the contracts being used for freelancers, about whether their compliance practices can adapt to freelancers, and whether it is putting the organization at risk. HR may worry about the headcount. Who is actually involved and performing the work? How can they know if they are doing a good job? Someone in security may be concerned about who has access to their systems.
Essentially, resistance occurs because those in the organization do not understand how these changes will affect them or may not understand the benefits of hiring freelancers. They may feel that their unique point of view has not been considered.
The Harvard Business Review suggests that communication with resistors is the only real way to get them on board. They also provide the following ground rules:
- Don’t be in a hurry. Helping key stakeholders accept change will take time. Skip the “efficient” email, memo, or office meeting for a one-on-one conversation to help the resistor feel comfortable with the change.
- Listen. When listening to someone who has concerns about change, you should allow them to speak their mind and listen to understand. Be sure to repeat what you’ve heard and take up as little time talking as possible. If you are speaking more than 20% of the meeting, you are speaking too much.
- Be open and embrace a growth mindset. Be willing to change plans based on what you learn in these conversations. Even the best of plans can use a tweak or two to accommodate those that will be most affected by the changes. Remember that this is new territory for the organization. Cultivate a willingness to experiment, fail fast, it’s a sure road to lasting growth.
- Do it again and again. You will need to have these conversations more than once. The first time, you are listening. The second and subsequent conversations allow you to show that you’ve considered what was said and what you are doing with what was said. Even if plans are not changing, you can let them know how what they’ve said has changed the way you are thinking about the freelance program.
Although this may seem like a waste of time, statistics would disagree. Generally, 70% of change initiatives fail. Therefore, anything done to get resistors to embrace the importance of freelancing will be beneficial to your organization.
Step 2: Evaluate and Align
This step can be summed up in one sentence: Purposefully define the type of work that can be done by a freelancer and then engage the best talent networks that are out there.
Of course, finding the right freelancer is not as simple as choosing a platform and finding a freelancer to hire. The Oxford study states:
“Enterprises need to develop new practices for using platforms to engage freelancers in the work processes of their in-house employees. When innovations comprise new technologies, people need time to learn and become competent in using them.”
To be more specific, you will need to:
- Look at your organization.
- Clearly define the type of work it does.
- Determine the type of talent needed.
- Have Procurement identify select platforms based on those needs.
- Determine the tools you will use to communicate with the freelancer, such as email, text, Slack, Microsoft Teams, or Zoom.
- Identify and create a plan for re-skilling and training your employee base to work efficiently with freelancers.
- Communicate expectations for such things as deliverables and chain of command to make adding talent seamless.
In addition to evaluating the process for working with freelancers, Oxford suggests that an organization also look at alignment: “... for enterprises to truly benefit from the skills and expertise of freelancers, they need to ensure that the work of in-house employees and external freelancers is aligned, as well as to find a way to integrate related administrative and reporting processes.”
In terms of alignment, be sure that your organization considers the following:
- Budget: Carve out a specific budget for project managers to experiment with the sourcing platforms to determine how they can create value.
- Talent: Your organization will need to define its expectations of talent up front and determine if the platform provides adequate vetting. If not, your organization may need to create a vetting program for freelance hires.
Oxford also recommends “rapid prototyping.” Rather than give a full interview to each freelancer, hire an initial group of freelancers for a small sample project. Have a process for evaluating the work and move freelancers who pass the sample project to the next level of work.
Some organizations create standard tests which must be passed before freelancers can be added to their pool. This is commonplace in software engineering fields, where coders are measured on speed, efficiency, and comprehension before being considered for a team. Over time, a go-to network or “team bench” will naturally emerge from prior engagements.
Step 3: Create Transparency and Momentum
In order for the freelance program to thrive, a change management program is absolutely critical. Be sure to include:
- Internal advertising to let everyone know that you have a viable option for freelancers.
- A dedicated internal site or highly visible link through HR. Access to a digital tool like Microsoft 365 freelance toolkit can help coordinate communication, collaboration, and workflows.
- In-person time, where a talent platform comes into a company to explain the program, answer questions, and create positive momentum.
- Time for employees to ask questions and be part of the conversation.
- A way to recap learnings from challenges, as well as a protocol for calling-out and celebrating wins. This could take place through team meetings or in a weekly report, for example.
It is also important, from an HR perspective, to create a repeatable process. Who is being hired and how? Additionally, HR should capture metrics and feedback for each freelancer so that others will know whether to re-engage them. The Oxford study also recommends having a “bench” of freelancers that the organization can call on frequently to keep from reinventing the wheel each time a freelancer is hired.
Finally, understand that experimentation is key. As you begin using freelance talent, hiring managers will have to take risks and are likely to experience some failure. It’s part of the learning process and should be supported, tracked, and reported on. As mentioned above, it’s critical to offer transparency into learnings and wins. It takes a village (the organization) to fail fast and determine company-specific best practices.
Still, a savvy way to limit the consequences of failure is to start small. Pick one area, like software engineering, and apply solutions successfully before trying the solution on other areas.
Step 4: Mitigate Pain Points
Whenever change is effected, pain points arise. Mitigating these pain points is a crucial prerequisite for experiencing the benefits of hiring freelancers. The following tips can help avoid common pain points when working with freelancers:
- Understand the difference between an Independent Contractor (IC) and a freelancer. An IC owns their own business, has a Federal ID, and does quarterly taxes. They operate more as a business than as an individual. The IRS is alert to the misclassification of workers because of decreasing tax revenue, and companies that misclassify can receive huge fines. Your organization should look for sourcing platforms that offer IC-vetting.
- Bring IP counsel into the picture early. Dyan Finkhousen—CEO, Shoshin Works, and former founder and director of GE’s global innovation accelerator Geniuslink—recommends speaking with “... IP counsel early and thoughtfully to help open innovation projects proceed smoothly.”
- Create the right contracts. Staff augmentation or outsourced service contracts do not fit the purpose of the work that the freelancer industry is doing. When this happens, it is difficult to bring in the talent faster and more efficiently. “Clients don’t understand the contracting model,” Spanier states. “They don't understand the nuances between the freelancing network space and the traditional contingent labor space.” He recommends taking the top platform’s contracts, reading the Terms & Conditions, looking at commonalities with your current contracts and how they differ, and then creating a new template based on that information.
- Create a game plan centered around ongoing learning. How will your organization keep a pulse on changes in the freelance workforce? How will key lessons and best practices be communicated across the company? One of the best ways to mitigate pain points with your freelance program is to create a communications channel for finessing your freelance program as it moves forward.
“If you deprive yourself of outsourcing and your competitors do not, you're putting yourself out of business.”
– Lee Kuan Yew (Former Prime Minister of Singapore)
The Future of Freelancing
The future of freelancing is bright, though the philosophy around hiring freelancers has morphed over the years. It’s no longer about pulling in a designer for a one-off logo job. Instead, it’s about developing cohort teams of people who you respect and trust and want to work with. In the long term, freelancing is a good thing for our world: People get to work on projects they are passionate about, and companies remain agile and competitive.
“Don’t wake up one morning like Blockbuster in a Netflix world,” quips Spanier. “Don’t be disconnected from what is actually going on with the needs of hiring managers.” Instead, he suggests following the steps outlined above so that your company can take advantage of the potent advantage freelance talent networks offer.