According to the Freelancers Union, there are currently about 54 million people doing freelance work to earn a living in the U.S., and Intuit estimates that by 2020 freelancers will comprise about 40 percent of the total workforce. These ‘solopreneurs’ have grown exponentially since the economic downturn in 2007, and they are an important segment of the Gig Economy. If your firm isn’t leveraging freelancers to fill important roles when you need help on a short-term basis to ease workloads, or need specialized skills that are hard to recruit, you’re missing a great opportunity.
Today, the on-demand workforce offers companies the ability to tap into extensive networks of innovators, technical experts and seasoned professionals for roles as varied as doctors and nurses, insurance underwriters, IT programmers and accountants. The attraction for employers is the ability to pay only for the skills you need, when you need them, and to avoid paying benefits and payroll taxes.
Individuals choose to work as freelancers, or independent contractors, as either their full-time professions or part-time to earn supplemental income. The attraction for many freelancers is the ability to work from home and to provide quality services with no strings attached.
Many companies struggle with the idea of employing a large number of freelancers because they are concerned about how they will manage people who are not on site, or that it will be difficult to manage cost and quality. Here are some tips to help you build a successful freelance workforce:
- Recruiting – Finding the freelance talent you need is as simple as posting a job on Craigslist or one of the freelance marketplaces like Upwork, Guru or Fiverr. However, you need to do a little research on market rates for the roles you are seeking to fill, and remember that cheapest rates usually means less experience It might be better to be selective and pay e more for a seasoned professional with experience in your industry and who is more likely to deliver the quality of work that you need. Consider posting your freelance roles on industry association job boards and LinkedIn, and ask your social networks for recommendations as well.
- IRS Compliance – The IRS is vigilant in ensuring corporations are not intentionally misclassifying employees as independent contractors to avoid payroll taxes, so it is very important to follow their guidelines . You will want to avoid requiring the freelancer to work on-site or use your computer equipment, as these requirements could classify them as employees rather than freelancers. You should establish a clear contract that defines the services and payment terms prior to engagement. Our free Employee Classification Scorecard provides handy tips to ensure compliance, and you can find more details on the IRS website.
- Communication – We recommend starting each freelancer with an agreement on the scope of work, company culture, and the supervisor’s preferences for regular check-ins, progress reports and billing procedures. Leverage communication tools like Google Chat, Slack and Join.me that facilitate convenient meeting and document sharing. Tell the freelancer if you prefer that they communicate with you by phone, text or email. And be sure to communicate with your other team members on how they should engage and collaborate with your freelancers to avoid misunderstandings.
- Project Management – Most organizations leverage project management software or portals like Basecamp or Wrike to keep their teams informed and on task, and it’s beneficial to leverage those same tools with your freelance workforce. Establish regular meetings and reporting schedules to manage progress, and make adjustments as needed.
If you are ready to include the Gig Economy as a part of your talent solution, consider speaking with Enterforce about how we can help you manage your freelance workforce more efficiently. We’re here to help!