By Michael Burdick
If the digitally spawned Postmates, Airbnb, and TaskRabbit have taught us anything, it’s that the global workforce is changing faster than Clark Kent in a phone booth. The gig economy has led to numerous shifts in business, with workers embracing freelance opportunities en masse.
A recent survey by the McKinsey Global Institute found that up to 30 percent of the working-age population in Europe and the United States has engaged in some sort of independent work. My company, Paro, has been on the front lines of this shift by connecting the most vetted finance professionals with companies that need assistance with their finances.
Workers have embraced the newfound independence that freelance work allows, and employers have realized that they don’t always need to recruit full-time staff. This is particularly true for growing businesses or industries that see a surge of demand at various times of the year. Freelance workers and companies stand to reap tremendous rewards if they’re able to develop and execute these partnerships.
A Win-Win Proposition
Autonomy motivates many who enter the gig economy, with work-life balance driving numerous workers to ditch a traditional employment structure in favor of cobbling together their own living.
Aside from independence, workers embrace the freelance lifestyle for numerous reasons. They might live in a remote area without plentiful job prospects. They could be nomads who love the idea of earning money regardless of their location. Or they might be Baby Boomers who want to establish a new revenue stream as they near retirement. Whatever the reason, gig work can be a breath of fresh air for people who are sick of conventional workplaces.
Companies, meanwhile, realize that full-time hires are not always conducive to the agility necessary in today’s ever-changing business world. Business needs are inconsistent, and companies need specific experts at different times of the year. A retailer might need more customer service help during the holiday season and financial help during tax season, for example. The gig economy makes it easy to temporarily staff up as demands evolve.
Business leaders appreciate the cost savings of this approach, as they can hire a team of experts with different skills for the equivalent of one full-time employee. Companies also avoid overhead expenses because they don’t have to provide contractors with costly benefits. This can be particularly beneficial for newer organizations that are still trying to grow.
Tapping Into the Gig Economy
The gig economy has numerous benefits for companies and workers alike, seemingly spurring permanent changes in the way we work. Any business can tap into the gig economy, but there are a few tactics that can ensure your foray into the freelance field is fruitful:
1. Identify your company’s work priorities.
Figure out your priorities regarding output, and try to pinpoint areas where you lack resources. Nail down the tasks you want to outsource ahead of time so you don't waste time or money once you recruit freelancers. By identifying priorities ahead of time, you’ll avoid the chronic problem of over-hiring for a project.
Microsoft, for example, has re-evaluated its use of outside vendors. The tech behemoth relies on thousands of contractors but has found that it’s a challenge to keep tabs on this army of outside workers. Microsoft has switched to an arrangement with which it will contract a supplier for a specific project, with the supplier hiring and managing a crew to handle the work. This sort of arrangement might make sense for Microsoft given how many contractors it employs, but it likely isn't necessary for smaller organizations.
2. Create a blueprint for success.
Many in-house employees will be grateful for the additional support, but they will undoubtedly have questions about the addition of contract employees. They might want to know why you're recruiting freelance workers, why you’re not making full-time hires instead, and whether their jobs are in jeopardy. Anticipate natural questions about the change, and prepare answers that assure your full-time employees.
At the same time, provide your staff with the tools necessary for a smooth transition. Install video-conferencing software on company computers so team members can collaborate virtually. Consider giving your existing team the ability to work from home, and let freelancers know how and when you’ll communicate with them, as well as how to use your communications systems.
Airbnb, which technically employs independent contractors in more than 65,000 cities across the globe, faces a unique challenge as it relates to ensuring those hosts feel like part of a larger team. The company has tried to create a sense of unity by inviting hosts to attend its executive board meetings via Facebook Live. Airbnb clearly sees the value in giving the people vital to its success a chance to weigh in on big decisions.
3. Treat freelancers like a part of the team.
The more you’re able to help freelancers feel like contributing members of your team, the more likely they are to take pride in their work. Invite them to attend relevant team meetings (even if it's just via phone call), and encourage them to participate.
Toronto-based creative agency CO-OP Advertising coordinates a quarterly group gathering where attendees discuss freelance advertising agency trends. The company treats contractors like full-time employees, building mutually beneficial relationships over time.
4. Provide constructive feedback.
At the end of any project, spend time talking with freelancers and your in-house team about what went well (and what didn’t go so well). Insightful feedback can ensure things go better the next time you bring in outside support.
Consider Procter & Gamble’s long-term partnership with Jones Lang LaSalle, for instance. P&G created an agreement that empowered the contractor to take ownership of its technical centers, effectively creating a new outsourcing model. Instead of micromanaging the contractor, P&G gives JLL big-picture targets and plenty of leeway (with feedback along the way). The result has been a lucrative partnership for more than 10 years.
The gig economy is sweeping the world, and employment trends indicate that it’s here to stay. Instead of clinging to the workplace structures of yesteryear, companies can benefit their bottom line and gain valuable partners by dipping a toe in the freelance pool.
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Michael Burdick was a former consultant by day, entrepreneur by night. Now he is the CEO of Paro.io.