The workforce is poised for a dramatic transformation. How prepared is your business?
When legacy industries, like the legal field, take on droves of freelancers, you know the rules of the working game have changed.
As an NPR piece illustrated, one West Virginia law firm is bypassing the tradition of hiring associates and paralegals and is instead delegating its mounds of niche work and tasks to freelancers and technological solutions. It's a bold way to reimagine legal life, but it also signifies that the freelance wave will hit the economy like a talent tsunami.
Although about 20 percent of positions are freelance today, NPR and Marist predict that freelancers will account for half of U.S. jobs by 2020. With this looming occupational shift, companies of all sizes will need to find a way to leverage the freelance workforce.
Faced with this new reality, members of C-suites must prepare for the influx of freelancers. Otherwise, they could be slapped with the harsh realities associated with unpreparedness.
Facing the freelance future head-on
Hard as it might be to imagine, the internet was once considered a fledgling concept. It was deemed a trend, a passing fad that would go the way of other promising yet poorly conceived ideas. That was, until, businesses envisioned what the internet could add to the future of shopping and retail. The companies that saw that potential (e.g., Amazon) were rewarded when that shift occurred, while everyone else is just trying to keep pace.
Think of freelancing as a second cousin of the early internet. Like the internet, companies that refuse to be proactive or pay attention to the emergence of freelancing open themselves up to several challenges that include financial shifts, potential legal problems and being labeled antiquated by their contemporaries.
Plus, a reactive approach to freelancing can drain a company's access to innovative talent and knowledge workers. America's economy is booming, stellar candidates are scarce, and there is a war for talent. Knowing that, top freelancers aren't desperate; after all, they're the hunters, not the hunted. They won't stick around with companies that treat them like second-class citizens, even at giants like Google and Facebook that are renowned for their great treatment of full-time employees.
Even if you hire just a handful of freelancers today, you can be sure you'll consider more in the quarters to come. It's an inevitability, even in fields that seem impenetrable to change. That's why you need to address infrastructure challenges through proper planning now.
1. Build an internal task force to enact your approach. If talent is a business's best resource, an internal task force dedicated to helping it live its best life is key. Coordinate a team with members from legal, payroll and other departments that can address this new workforce. The more voices you bring to the table, the less likely you'll be to expose your business to potential risks.
For example, appoint a group or its members specifically to track regulations regarding compliance and employee classification. One study reported that between 10 and 20 percent of employers incorrectly classify at least of their workers as an independent contractor. And with new freelancer regulation popping up whenever the wind blows, especially in the U.S., protecting your company from those types of gaffes is vital.
Netflix came under fire for a similar breakdown with its "Project Beetlejuice" system. The project paid participants $10 per film to watch and pick the most representative images and videos for that title. Participants claimed Netflix classified them as contractors instead of full-time employees to keep from paying overtime and time and a half, prompting a class-action lawsuit from two participants to be compensated as full-time workers. In the case of intentional fraud, the criminal penalties don't stop at the wallet.
2. Decide where your freelancers will live. A freelance workforce means that the world is your office. Employees are scattered at all ends of the globe, which can be an overwhelming prospect for those responsible for managing talent.
Freelancer management doesn't reside in any one department. Some days, it's with operations; others, it's with HR or finance or procurement. No matter where it is from day to day, make sure it has a well-defined home with a department that can devote the necessary energy toward it.
Expect to make a significant upfront investment to put bandwidth in place to deal with all your needs. Of course, you don't have to make HR the home for freelancers. But no matter what, have a place where the responsibility for freelancers lies.
3. Identify and rectify technology issues. Businesses routinely underestimate how much they need to rethink their technology when they're onboarding and retiring freelancers. The processes just aren't the same as with full-time and on-site workers, which means the technological infrastructure must support freelancers.
Due to freelance work being short-term, high-volume gigs, centralized systems designed for full-time workers who work normal shifts just aren't ideal for freelancers hopping in and out of businesses week after week. Entirely new processes and systems need to be established around onboarding practices, integration and systems access and payment terms.
Let's face it: Freelance workers aren't a bolt-on service, and they aren't a quick fix. Don't treat them like they are. Instead, put money toward strategy, tech and processes that are built to handle a dynamic, fluid, flexible and distributed workforce. Sure, you might have to put capital behind creating proprietary processes different from your regular ones, but that's the price of leading the workforce revolution.
Sooner or later, your company will be in some way touched by the overwhelming cadre of freelancing professionals. Be certain that you've crossed all your t's before signing on anyone who doesn't fit into the traditional employee mode.