The freelance revolution is here
Our expert's opinion:
“The need for a flexible workforce is increasing steadily, in order to keep the permanent workforce occupied on their core tasks. Although there are examples that show it the other way around, strategic projects are usually handled by external consultants. Not only for the reason described above, but also to keep their analysis and judgement free of prejudice. For an optimal critical view at processes and their possible improvements, it’s best to do so disconnected from the reigning corporate structure to ensure maximum out-of-the-box-thinking.”
- Kelian Huysmans, Associate Consultant
The freelance revolution is here: is your organization ready?
These days, more and more organizations are benefiting from the advantages of a new workforce architecture, the flexible blended workforce. Unlike traditional staffing models, the flexible blended workforce is designed to do exactly what it says: to flex in size up or down, and quickly add functional expertise and experience by supplementing the organization’s full-time staff with project based freelancers working together, sometimes on site and often remotely.
Does your organization need a team of top software developers with blockchain expertise to accelerate bringing a new application to market? Or a talent management expert to implement a more effective performance management system? Or, as Norwegian Air has done, expand your pilot cohort with freelance pilots? Through digital talent marketplaces, organizations can rapidly expand their ranks with the skill and specific experience needed, and hire only as much of the freelancer’s time is needed to achieve the goal.
It sounds good, and it works when organizations are set up correctly to gain the benefits. But, an effective and efficient flexible, blended workforce requires changes in how organization members think and act. For example, without a clear and well communicated workforce vision, managers may be confused about when to deploy freelancers, and employees may be fearful or suspicious that their jobs are at risk. Without a shared performance protocol for freelancers, conflicts and ambiguities (who’s responsible?) are more likely to spring up. And, if managers don’t have the skills to managing freelancers, or don’t understand the difference between freelancers and employees, blended teams are likely to be less collaborative or productive.
In a Forbes article last year I described the six success factors – or alignments - that make or best the success of a company’s blended workforce:
- Communicate a clear workforce strategy and the role of freelancers in it. Some organizations plan to significantly depend on freelancers, while others see independent professionals in a more limited way. Whatever the vision, It is important for executives to clearly communicate the role of freelancers in the future workforce, the contribution expected of them, and the implications for full-time employees.
- Practice rigorous performance management and feedback for freelancers. The best companies for freelancers have a clear performance protocol: an S.O.W. that defines results, timelines, and measures. But, it goes further to assess performance regularly, act when contribution is not up to high standards, recognize freelance high performance, and practice two-way feedback.
- Engage freelancers and make them feel part of the team. Freelancers regularly complain that they are kept at arm’s length, and would be more productive if communication were improved and they were more fully treated as team members, participating in relevant meetings and attending updates and team training (especially where virtual attendance is possible). This is particularly problematic for freelancers working remotely.
- Provide managers with the training needed to lead and manage freelancers. Freelancers generally choose independent work because they seek a collegial relationship with the organization, rather than a subordinate relationship. They are independent businesspeople or “solopreneurs” and are most productive when treated that way. Most executives in a recent global survey see the need for management training on managing freelancers.
- Ensure reasonable administrative policies that don’t punish freelancers. Too often, administrative policies are designed to protect companies from vendors, rather than establish a positive give and take relationship regarding contracts, payment terms, and working conditions. Depending more on freelancers requires organizations to adapt their policies to a new set of requirements. After all, why would a top expert accept a 60 day payment policy or egregious IP ownership demands?
- Design the work to get the best from freelancers. A critical last action is to ensure that the work given to freelancers, and the division of work between freelancers and full-time employees, is designed for success. This has several aspects: where, what, when and how. For example, can the work be completed, in part or whole, remotely? Remote work will attract more top freelancers and reduce cost. And so on.
But, from an HR perspective, is your organization ready ? How well is your organization adapting to the requirements of a flexible blended workforce? This is important because most companies - and perhaps your toughest competitors - are increasing their reliance on freelancers, and getting smarter about how to benefit from the relationship.
I recently had the opportunity to join a global cohort of HR leaders at the Wharton School, University of Pennsylvania, for a TMI-Wharton Global Fellow initiative. The TMI-Wharton Global Fellow Program in Talent Management brings together top HR executive talent from a wide a range of industries and regions, and this cohort included leaders from 22 countries.
We asked these executives to assess the readiness of their organizations to implement the flexible, blended workforce in their organization – how well their organization had met the requirements of the six success factors. Individuals rated their organization on these success factors, and each rating was on a 10 point scale from “weak” to “strong”.
Here’s what we found:
Signs of strength but also needs for improvement. Overall the results were hopeful, and indicative of increasing management interest and thoughtfulness in transforming the workforce. As the chart below points out, HR leaders saw greatest strength in how freelancer performance was managed, and assigning the right work and right interdependencies to freelancers. On the other hand, workforce strategy, which reflects the need for both clarity and communication of direction in the blended workforce is at the very bottom end of “ok”. More about this finding in the next section.
The two weakest categories were managerial training and the administration of freelance work. This is good news: they are also the two success factors that can be meaningfully improved with relative ease, and quickly produce a bounce in freelancer productivity, satisfaction, attraction and retention. As importantly, the impact is likely to register on the bottom line.
Looking more deeply at these data provided additional insights. By comparing the percentages of “weak” vs “strong” ratings, we can more clearly see areas where HR leaders are optimistic or more concerned.
In two areas, the gap between “weak” and “strong” ratings was particularly meaningful:
HR leaders recognize the importance of communicating a clear workforce strategy. Workforce strategy was a larger concern for HR leaders than it first appears. Only 24% of executives think their organization has communicated a clear workforce strategy. And almost half the HR leaders, or 43% say their workforce strategy as unclear, uncommunicated, or weak.
Implicit in the strategy gap is an obvious missed opportunity to align the workforce with a clear staffing plan that is strongly connected to current and future competitive challenges. But there is a second miss when the workforce strategy isn’t clear: a lost opportunity to leverage the blended workforce by building relationships with key freelance talent pools. Many organization leaders don’t recognize that top freelancers are in great demand, or that the competition for their best people may be the freelance route. A workforce strategy should include a plan to engage with freelance communities of interest, for example, digital talent marketplaces like Expertera, Kolabtree, Experfy or the Business Talent Group. In fact, some forward thinking organizations, recognizing the fact of competition for top freelancers, have begun to articulate a freelancer value proposition (“Why you should work with us”).
Administratively treat freelancers like a partner. It’s also clear that many companies have to administratively improve their treatment of freelancers: the largest gap between “weak” and “strong” scores was in the area of administration. HR leaders increasingly recognize the importance of treating freelancers as valued partners, in order to reinforce the organization’s ability to attract and retain top freelance talent. But, fewer than one in five HR executives were satisfied that the administration is aligned with that purpose.
What’s the takeaway? All together, these data send a strong message: HR leaders see the growing role of freelancers in their organization, and understand the value of a flexible, blended workforce. But, as one HR executive put it: “It’s time to create an environment where top freelancers are eager to be part of our total workforce, and are (and feel) set up for success.”
That says it all.