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6 Jan 16 Industry Insights

How The Freelance Economy Will Affect Employer Branding

Let’s face it, traditional work models aren’t really cutting it anymore.

 

One of the more exciting discussions surrounding the workforce today focuses on the rise of the freelance economyAs more professionals pursue the flexibility of independent careers and more companies utilise an on-demand workforce to scale labor more efficiently, the recruitment industry is buzzing about how this trend will impact the overall labour force. We are not only approaching a paradigm shift in our perception of human capital, but also a period of huge disruption and innovation in talent acquisition and development strategies. The labour economy is changing before our eyes.


Whether you’re a start-up, SME or a global enterprise, your chances for survival in the war for talent will be pretty slim unless you understand the value of freelancers and what is driving this shift away from traditional work models. Today, we’re going to share with you the common motivations for seeking freelance work and how businesses can make themselves desirable to the “freelancer generation”.

 

 


What’s driving the change?

 

First, it’s critical that you understand what is driving people to pursue freelance work. Understanding the common motivations of top talent allows you to craft a more attractive employer brand and a more compelling offer of employment, and also provides insights into how you can improve the job satisfaction of your permanent employees.

 

 

Some of the most common drivers include: 


- Project-based work is simply more attractive to a growing number of professionals, particularly millennials


- It’s increasingly common for senior managers to think about their work in a “modular” way (See “The Age of Hyper-Specialization” by Thomas W. Malone, Robert Laubacher and Tammy Johns)


- Temporary solutions are appealing to companies that need to cap costs and/or are undergoing a transformation, particularly if they are already using lean management systems


- European labour laws have made it more difficult and costly to fire anyone, making temporary hires particularly more appealing


- It is easier than ever before to turn your passion into a business thanks to easily accessibly technology and social media. Freelancing or flexible working provides people with the time and headspace to pursue side projects for long enough to see if they could become income-generators


- Corporate social contracts rarely offer the same job security and valuable benefits packages, so there is less reason to stay in a permanent job in the first place

 

- The 80-hour work week has become far too common and, unsurprisingly, most professionals would prefer to spend less hours in the office

 

- Advances in technology has made it easier to set up temporary and flexible work arrangements

 

- After learning how critical it is to hire and retain top talent, businesses are evolving to learn how best to engage with this low-risk, flexible and fast talent model

 

 

There is also growing demand for portable health coverage and the re-writing of tax rules that hurt independent contractors. This would certainly re-catalyse the growth of the freelance economy. 

 

 

 

What does this mean?

A growing percentage of top talent is choosing independent work because they want to control what they are working on, who they’re working with, and how much time they will have to spend with their family or to pursue entrepreneurial or creative side projects. As time is a more precious commodity than ever before, savvy employers are taking on a higher proportion of freelancers, incorporating remote work, and introducing flexible contracts or flexi hours to enhance their employer brand. This, however, requires a overhaul of operational procedures (and potential investment in new IT) to develop new systems of work that enable this new mix of employees. 

 


Freelance employment offers a surprising number of benefits to employers too. The demand for senior-level specialists ebbs and flows depending on business needs, so it’s natural that they would prefer for this to become variable cost. When these capabilities are as vital to a company’s success as the specific knowledge of internal processes - for example, leading a business-wide transformation or managing a particular phase of a product lifecycle - organisational design must evolve, too.

 

 

Incorporating freelance, flexible and remote working options also makes it easier for employers to recruit a more diverse and creative workforce. As we mentioned above, some professionals are attracted to freelance work as they have a particular hobby or passion that they’d like to pursue in their free time and potentially turn into a business. Although there are challenges that come with hiring a higher proportion of freelancers, the benefits from having a more flexible and talent-focused recruitment model as well as a diverse, engaged, multi-faceted and commercially-minded team will far outweigh the risks. 

 


 

It’s worth mentioning that independent work isn’t for everyone, and there is huge value in hiring permanent employees. We want to move away from the binary of freelance vs. permanent employment. The point is to understand the value of both - on an individual and organisational level - and make informed decisions with this knowledge.  We need to stop putting people in one box or another and understand that people can and should move between both models when it aligns best with their personal goals, life circumstances and values. And as we shift the popular mindset towards work, perhaps, hopefully, we will see an era of enlightened work models that will benefit the economy and the average Jane. 

 

 

A guest post from Izzy Griffin-Smith

 

 

 

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