The gig economy isn’t coming—it’s here, and to prove it you need look no further than the fact that 35 percent of the US workforce is now freelance, and experts expect that number to zoom past 40 percent within two years.
At the same time, the demographics of independent contracting are blurring: you can find freelance workers in both blue- and white-collar professions, and at all stages of their careers.
The Disconnect Between Workers and Employers
Some traditional brick-and-mortar companies either don’t know about the revolution under way outside their castles, or don’t believe it has anything to offer them, secure in their belief that the typical employee still wants nothing more than a full-time salary, benefits, job security, and a 5-by-5 cubicle.
But this is simply no longer the case—just ask millennials, who now make up the largest generation in the workforce, and who don’t see the employer-employee contract the way their parents did. At all.
Recently, while surveying various companies on their present and perceived future employee needs, we heard from the CFO of a company in the middle of New Hampshire that he would never use outsourced financial talent, because he waits to hire until he has a “big” need for a full-time employee, and because the process of creating an on-site job opportunity and finding and hiring the right person is an important part of the culture and tradition of the company.
When business executives cling to traditional notions of company structure, they fail to grasp how today’s workforce thinks about job opportunities and how the growth of the gig economy impacts them whether they pay attention to it or not. For one thing, if they aren’t up to speed on this dynamic new labor sector, they are missing how it can help them boost profits by using freelance talent to streamline their processes and become more flexible across ups and downs in the business cycles—and to reduce the need for, and cost of, office infrastructure.
Related Article: The Future is Freelance: How to Optimize Independent Worker Output
Related article: 4 Strategies to Make Freelancers a Valued Part of Your Team
Millennials Want to Work Remotely
The other thing they’re missing is the possibility that the “right person” for their position might be out there—but might not want to work a 9-to-5 job, and/or might not want to live in the middle of New Hampshire. What might have been a dream job for that person a generation ago—and a solid reason to relocate—might not have the same appeal today.
Older, established freelancers have done their time in the full-time sector, have honed a career’s worth of marketable skills, and are enjoying the freedom to work where, when, and how they choose. Millennials, too, cherish their independence, albeit with a more youthful desire to be part of dynamic communities. They want flexibility and autonomy and places to live where they can flourish and meet people. They see working remotely and on-demand as an awesome opportunity, because they get the best of everything: the job they want in the location they want.
Some companies—McDonalds, ConAgra, Aetna, and GE to name a few—have moved or are in the process of moving offices from the suburbs back into cities because many of their employees want to live and work in lively urban neighborhoods, and would rather not commute out to a bland office park by the highway. But for many millennials, the most desirable commute of all has the prefix “tele” in front of it.
Forbes has reported that 92 percent of millennials would prefer to work remotely; if your business historically has relied on recruiting young employees to work on-site, ignore that statistic at your peril. Because if you won’t offer a remote option to your talented young applicants, they can easily find companies that will.
On the other hand, if you choose to welcome the gig economy, it becomes an opportunity, not a threat.
Embrace Your Relationships with Independent Contractors
Hiring independent contractors not only minimizes expenses that come with full-time salaried employees, including the cost of benefits and office space, it also helps companies focus their resources on getting the best talent for the best cost.
Using a mix of in-house employees and remote, on-demand talent can improve quality and efficiency in a couple of ways. For one thing, while your on-site employees have their share of strengths (that’s why you hired them!), they probably aren’t experts in every specialized need your clients throw at you—but if your talent network is wide enough, one of your freelancers is likely to have the skills and experience that fit the task. And if you have seasonal sales fluctuations or you hit a temporary bump in the road, a more flexible employment model will help you navigate the ups and downs more nimbly and cost-effectively.
And companies don’t need to gut their staffs to make way for the gig economy; the dynamic companies of the near future will integrate a mix of core full-time employees and a flexible, fluid, freelance talent pool, says Bruce Tulgan, an expert on generational workplace trends and the founder and CEO of the employment consulting firm Rainmaker Thinking.
If You Want Loyal, Long-Term Employees, Set Them Free!
Tulgan noticed something interesting when consulting to a leading firm in the PR industry: “that the number of employees technically working for the firm is deceptive. The firm seeks to employ just about every talented person in the PR industry. I mean everybody. But not as employees.”
The CEO proudly explained to Tulgan the secret of his “broad talent network.”
“We no longer need to own talent to have control over the quality and consistency of the work,” he said. “We just need to forge relationships, whether it’s through using freelancers or alliances and joint ventures with other firms. Overall, the goal is to enlarge our network as much as possible, so we have access to as wide a range of services as possible.”
This strategy can be applied to a broad range of industries; besides marketing and PR, the leading categories benefitting from freelance networks are health care, computer and IT services, accounting and finance, web design and development, writing and editing, education and training, and travel services.
Related Article: The Gig Economy Has Matured—When Will the Business World Catch Up?
Outsourced Doesn’t Mean Short-Term!
And don’t worry—just because you don’t own your outsourced talent doesn’t mean you can’t work with them long-term. In fact, the new model has produced another interesting benefit: redefining the whole notion of turnover and talent retention.
Even when people leave as full-time employees, Tulgan says, they often come back, because “through the talent network, they never stop working for the firm.”
A larger and more flexible talent pool, cost savings on office infrastructure, loyal freelancers who appreciate the work/life balance you’ve offered them and are just an e-mail or Skype call away—what’s not to like?
So, stop restricting your options to full-time employees. This outdated notion will drastically limit your ability to bring on the best talent and will cost you money in the short-run and potentially your business longer term. The longer you stay in this static mindset and the more companies around you evolve to embrace remote work, freelance talent, and finding the right person for the right role at the right time, the quicker and more efficiently they will grow, eventually leaving you in the dust.