In an economy where the competition for competent workers has reached war-like proportions, finding new ways to bring top talent on board can create significant competitive advantage. One talent pool that companies sometimes overlook is the community of professional freelancers and contract workers—both in the U.S. and abroad—who are taking advantage of flexible, project-driven work opportunities.
According to the U.S. Department of Labor, one out of ten employed adults in the U.S. are full-time contract or freelance workers, with another two out of ten working part-time or moonlighting on a remote basis. While the numbers may seem surprising, they reflect a growing trend towards workplace flexibility as well as the desire among many workers to supplement a full-time income with part-time earnings.
Collectively, freelance professionals represent a fresh and powerful talent pool available to organizations willing to tap into it. It can, however, be challenging for a large organization to figure out how to successfully find and hire these individuals. Let’s take a look at some of the barriers organizations face when seeking to leverage talent from the ranks of contract or gig workers, as well as some things an organization can do to more easily find, attract and retain good independent talent.
4 Reasons Organizations Struggle to Find and Hire Independent Contractors
Most large organizations are set up with traditional employment structures in mind. This creates a number of barriers when it comes to working with gig workers, including:
- They don’t know where or how to find good contract workers. Despite the proliferation of such sites as Upwork and Freelancer.com, good freelancers aren’t always easy to find. Once established, many of the best independent contractors succeed at establishing sufficient work flow through networking and word of mouth, so they tend to fly under the radar of companies using more established channels such as staffing agencies or online platforms.
- They don’t have effective vetting and hiring procedures for freelance talent. Independent contractors don’t look for work in the same way that people who are looking for employment do. It can also be difficult to judge in advance how a freelancer will actually perform once hired. Hiring them therefore requires a different approach than most companies are used to using when hiring employees. The lack of efficient sourcing, selection and hiring procedures for gig workers can lead many organizations to shy away from seeking contract workers or exploiting this rich talent pool.
- They don’t know how to effectively manage contractors. Freelancers tend to have an independent approach and/or work more effectively when handling incremental or short-term assignments. Sometimes working with them can challenge the traditional corporate mindset. While many contract workers are capable of producing superior work, it can be difficult for managers in a corporation to know how to integrate them effectively into existing work processes or with existing teams of workers. Even when a contractor brings great value to your organization, knowledge transfer from the contractor to internal teams can be lacking due to unclear expectations or limits on time for knowledge transfer.
- They require legal processes that freelancers aren’t equipped to deal with. Lengthy and/or complex contracting processes may put off many contract workers who don’t have the time or resources to deal with them. Most large companies have agreements which are 25-40 pages in length and require extensive legal review to understand let alone negotiate. Most gig workers will opt for easier, less onerous requirements. Additionally, large companies also have unrealistic insurance requirements that place undue burden on contract workers to carry levels of insurance that can be cost prohibitive.
Organization Design for the Contract Economy
How does an organization overcome these barriers to tap into this dynamic pool of motivated, innovative and talented workers?
Leveraging the contract economy effectively starts with a mindset shift. Rather than thinking of roles within the organization simply as positions to be hired or outsourced through an agency, it can be useful to start taking a closer look at the work involved. Does it require a hard-to-find skillset? Is it work that, while essential, won’t be needed every day? These may be indications that the role may be well suited to a contract worker. Being open to the idea of working with independent contractors is the first step to being able to utilize them effectively.
Next, leaders seeking to leverage freelance workers need to put some thought into designing their organizations to successfully find, onboard and manager freelance workers. Consider:
- What processes do you need to put in place to search for and find qualified gig workers?
- How might your hiring or contracting processes need to change to make procurement as hassle-free as possible both for your organization and for a contractor?
- How will you integrate these workers into your organization? How will you set your organization up to manage them effectively and leverage their skills and expertise?
These are not easy questions. Adapting your organization to take advantage of the growing gig economy may be challenging. However, companies that struggle to attract and retain top talent may find that the benefits outweigh the difficulties. Designing your organization to leverage freelancers and contractors can bring improved productivity, increased innovation and enhanced competitive advantage for your company.