Traditional hiring practices have been challenged lately due to a tight labor force, the result of a booming economy. But there are other factors at play as well. Many would-be full-time employees have opted to hang their hat on becoming freelancers, taking advantage of a growing “gig” economy. In fact, according to a recent Kelly US Free Agent Research study, about one-third of the global workforce is forgoing traditional employment for the flexibility and freedom offered by free agency, freelancing, or gig work.
Increasingly, workers see freelancing as a way to make their work lives work for them – an opportunity to organize their work around life, and not the other way around. As a business owner or leader, it’s wise to try to attract and hire these freelancers who have a passion for providing quality service, as an alternative to full or part-time employees.
On Their Own
The Kelly study also found that gig workers make up 31 percent of the global workforce, and that in the US alone, there are 50 million freelancers, comprising 33 percent of the country’s workforce. The great thing about freelancers is that they run their own business, so they depend on repeat work and repeat customers. They strive to turn in their best work, every time, to maintain the relationship. The employee’s performance may have peaks and valleys, but freelancers know that their contract is always subject to renewal. Because they are on their own, they are typically more in tune with examining their performance and tweaking it where needed without prompting from the employer.
Because freelancers are considered independent contractors, (see IRS rules on determining the difference between employee and independent contractor), they furnish their own tools, manage their own time, and pay their own taxes. They have a freedom of sorts that employees don’t have, so freelancers tend to be more creative and will typically complete the assigned project as agreed and on time.
The Benefits of Freelancers
Hiring freelancers instead of employees has its built-in benefits for employers. First, there is the savings of not having to provide employee benefits to freelancers such as healthcare, Medicare, Social Security, retirement benefits and more. According to the Bureau of Labor Statistics, employers can save up to 30 percent of the average employee’s total compensation package.
Then there is the savings of having to provide certain benefits based on the number of employees a business has. For example, if the company employs more than 50 workers, it has to abide by the Family Medical Leave Act (FMLA) standards, and the Affordable Care Act. If the business has 15 or more employees, it must adhere to all EEOC regulations. The savings for reporting to these agencies alone are noteworthy. Hiring freelancers can help keep a businesses number of employees below some of these critical thresholds.
Finally, because freelancers are not employees, the risk to employers is reduced. Freelancers have no right to collect unemployment insurance, rarely have a right to workers’ compensation benefits, nor do they generally have the right to sue for harassment or discrimination. If for any reason they don’t work out, they are easier to terminate and replace than employees, which is very helpful in states with laws that create exceptions to employment-at-will.
How to Get a Gig Worker
Hiring a freelance worker for your business is not complicated. One of the main things to remember is that you cannot, and should not, try to control the work environment for the freelancer. Based on the IRS rules as mentioned above, a freelancer is an independent contractor and must be treated differently than an employee. You cannot set the freelancer’s hours, (although you can give parameters), furnish all tools, control his or her work, or take out money for their taxes.
A recent Oxford University study suggests that employers first do their homework before hiring just any freelancer. The study states that it all boils down to making sure there is clear communication between the employer and freelancer before signing a contract. To ensure this happens, the employer should write clear and complete proposals and very clear and specific goals so that the freelancer understands exactly what you need. If you can, always include details regarding what it is, what it’s for, and how and when you need it.
The more freelancers you begin using, the easier it is to hire them. But if you are just now venturing into using freelancers, you may find this Forbes magazine article that lists six steps for finding and hiring freelancers helpful. Three key takeaways include:
Determine your needs—seems obvious, but the first key to finding a great freelancer, (and even a great employee), is to determine what the job entails. Conducting a good job analysis, including what functions need to be performed, what is required to perform them, and what is the expected outcomes.
Post on job boards and access your network—there are a lot of freelance job boards out there today including Upwork and ProBlogger Jobs as well as 18 others that can be found here. In addition, access your personal and professional network to find folks who are doing freelance work now.
Be very selective—freelancers abound in today’s economy. There is no reason to settle on the first one you interview. Be sure to get the freelance that can perform according to your standards.
Negotiating with freelancers doesn’t have to be a complicated process. Don’t look at negotiating as an opportunity to get a bargain-basement deal, but rather it's for you and the candidate you're considering to come to a mutual agreement based on the value of the project and the freelancer's skills. As the business owner or leader, you need to set a clear work scope and be clear about your budget during the negotiation process. Once you and the freelancer have agreed upon the terms, let the freelancer perform the agreed upon task without interference.
Freelancers: Part of Hiring Strategy
Freelancers have their place in the workforce today. As part of your hiring strategy, consider using freelancers where appropriate. It is not a perfect plan for completing specific projects correctly and on time. Overall, the utilization of freelancers entails both benefits and drawbacks. Some freelancers might not live up to their promises or meet your expectations, while others might help you solve a myriad of critical and urgent issues in a matter of days. Consider freelancers as another arrow in your quiver to help you conduct business and compete well within your field. They are a resource that should be considered and utilized in addition to your traditional workforce.