Rethinking the Modern Workforce with Freelancers, Gig Workers, and Consultants

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Monique Akanbi: Freelancers, contractors and gig workers are reshaping today's workforce, helping businesses stretch budgets, drive innovation and access specialized skills. This flexible talent economy is now a powerful competitive advantage for many employers. But with opportunity comes new HR challenges. How do you stay compliant? How do you align these roles to your culture and how do you plan for them proactively?

Welcome to Honest HR, where we turn real issues facing today's HR departments into honest conversations with actionable insights. I'm your host, Monique Akanbi. Let's get honest.

Today our focus is to help you understand what these flexible talent roles can offer your organization, how to attract the right flexible talent based on your business needs, and the best way to integrate flexible talent into your strategic workforce planning.

Joining us is Sunita Solao, Chief People Officer at Online Freelance Marketplace, Upwork. Welcome to Honest HR Sunita.

Sunita Solao: Thank you. Thank you for having me.

Monique Akanbi: We are so excited to have you here with us. So let's start with understanding the flexible talent economy. There are more independent workers than one might think, and actually SHRM surveyed 16,000 people across the world as part of its global worker project research report. 38% identified themselves as independent contractors, freelancers, self-employed workers, or even gig workers.

Let's start by clarifying these roles we just mentioned. What are their primary differences?

Sunita Solao: This is a great place to start because while these are all described as independent workers or self-employed workers, there can be nuances in how people engage in work and there can also be some overlaps. As HR professionals, I think it's really important for us to get familiar with these nuances, especially as you said, because this is a growing portion of the overall workforce ecosystem.

So let's start with freelancers. As the name suggests, these are typically self-employed individuals. But the key distinction is that these are people who are choosing how many clients they want to work with. What hours do they want to work? What rate do they want to charge? So they're truly freelancing.

Another distinguishing factor is that these are typically folks who are highly specialized, so they bring special skills along with them. Examples are like website design or marketing campaign creation. And then most recently, obviously, AI specialization and skills. So that's the freelancer flavor of independent worker.

Then comes the independent contractors, as you were saying. These are also self-employed, but typically they are either individuals or in small entities. The nature of the engagement is that companies, small and big, hire them through a third party vendor or a managed service provider. So they're not contracting themselves directly with the client, but they're working through a third party.

That's independent contractors, similar professional skills, maybe less specialization and more bulk work, if you will.

And then the third, gig workers. This is something that is quite a bit different often, again, self-employed. But the common examples are ride share workers or delivery drivers. The main distinction between gig workers and independent contractors or freelancers is that the rate that is charged by the gig workers is designed by the platform that they work on. So they don't set their own rates, if you will.

These are typically tasks that are short-term or just short-term engagement based, whereas freelancers could work with you for weeks, months, or even years in some cases. So that's kind of the lay of the land, if you will. And all of this comes under the umbrella of self-employed.

Monique Akanbi: Got it. Perfect. How have you seen the flexible talent economy evolve over the past couple of years?

Sunita Solao: My gosh, it has been fascinating. I mean, I've been following this for a while and then now naturally with my role as the Chief People Officer at Upwork, I have been paying very close attention to this for the last couple of years.

This really took off really post COVID, I want to say, or during COVID. So the two changes we see is one is this is a movement. You yourself mentioned a stat that SHRM surveys show 38% of the workers identifying as independent workers. We have Upwork Research Institute. We do our own survey and research. We have about 30 to 32% of the workers reporting as either already freelancing or interested in freelancing.

So this is no longer some kind of fringe idea that a small portion of the population is doing this, but this is very much becoming mainstream and especially for this generation of workers and future generation of workers, I would say this is very top of mind. So that's one that it's now important enough and big enough that all of us need to take note.

I would say one more thing, which is the AI, the age of AI is only accelerating this because people who are skilled at this, interested in this are quickly building these skills and going into freelancing to offer their services that are so in demand. Another helpful statistic is that there are about 8,000 AI specialists just on the Upwork platform and 250,000 professionals who identify as skilled at using AI. So that's like a large pool of talent that's available right there to be using.

And the second thing that we are observing is, you know, back in the day we used to use independent workers, and I was one of those HR professionals who did this, is use them for stop gap backup. Last minute arrangements. But increasingly we are finding that companies have this as their proactive talent strategy, and especially companies that are future focused, progressive HR departments.

So I'll give a few examples. We have a large social media platform who works with Upwork to hire math experts who are dedicated towards safeguarding their training data as they train their large learning models. So this is not some kind of afterthought or a stopgap thing. This is an intentional talent strategy as part of their innovation that they're driving in their company.

Not just big companies, but we also have a customer based in Florida, actually. They are a law firm that supports or specializes in helping veterans and they are identifying freelancers on Upwork to completely transform their knowledge management system using ChatGPT so they can serve their customers, finding information very quickly, improving their internal processes. So they're really differentiating themselves or innovating by use of this independent talent workforce as their game changer in their business.

So these are the two trends, which is it's no longer after the fact or stop gap. It's very much strategic and proactive, and then it's no longer fringe. A third of the workers are doing this or want to do this.

Monique Akanbi: Those are really great examples. So from your vantage point, Sunita, why would an employer choose to hire flexible talent versus a full-time employee?

Sunita Solao: I love this question. So there are a few things that, one is an obvious one, which is not a new one, but I'll start there, which is there has always been a need where if you need something in terms of a burst capacity. So you have a new project or you don't have the permanent investment, but you want to, and there's uncertainty. You are not ready to invest in full-time hiring.

So companies have always turned to contractors and independent workers to say, while we navigate this uncertainty, there is this work we need to get done. Let's onboard independent contractors, flex up that workforce and then maybe flex down if we don't have this need or if the uncertainty goes away, maybe converts many of those into full-time work. So that still remains, and that's a great value proposition for working with freelancers.

A new thing that we are observing, and this is where I invite all of my HR peers and professionals to really learn about this new trend, understand how companies are working with this and perhaps bring that back as a strategic advice to their business partners is the need for speed and specialization. I mean, the world is changing only faster and faster. The need for specialization is getting higher and higher, and that's where I think the freelancing community really comes in because they are more motivated. They are entrepreneurs. They make their own livelihood, so they're training themselves with these skills like AI we already talked about at a faster rate.

So to the extent that you are working with your business leaders, and if AI or any new cutting edge technology or needs are part of your business needs, you would be well-versed to understand what are these skills that are being offered that you can really onboard quickly. Like, that's the other thing, the speed. Because on a platform like Upwork, you could stand up a 500 person workforce within weeks and start cracking at your problem or your project so you can get an edge over your competitors and move your business forward.

So I would say those are probably the two key reasons to look at independent workforce as part of core part of your talent strategy.

Monique Akanbi: Yeah. You mentioned where a lot of employers use flex talent to maybe stop gap, right? Like to satisfy an immediate need or shortage or complete an urgent deadline. How can HR teams proactively integrate these roles into more long-term workforce planning rather than relying on being reactive in the hiring process of talent?

Sunita Solao: Yeah. Another great question. I mean, I think the thing that has always been important for HR professionals, and this will sound familiar to you, is really understand the business. And this is more important now than ever. Going back to the earlier conversation of things are moving fast. All parts of the business, including HR department, needs to be in lockstep with where the business is going. What are our goals? What is the work, not just the jobs that are needed to support the business, but what is really the output that these jobs are producing? What are the skills that are required to produce these jobs?

The better HR professionals understand this and then of course, learning, like, you know, listening to these wonderful podcasts, looking at research papers, where are the HR trends going and bringing that knowledge back to workforce planning, talent strategy. Don't wait for the business to come and say, I need you to hire this and this job. It's already too late. By that point, we as HR professionals need to move further up the decision funnel and be right there at the table when the business is talking about we need to achieve these goals, we need to deliver these outcomes. These are the skills required, and if HR is plugged in at that point we can say, Hey. Here are some of my ideas based on this research and these trends, here are the professionals available and bring these ideas to the table and that will start the proactive flywheel of saying, all right, well, let's not just use freelancers when we have a need, but it can become part of your talent strategy right from the get go.

Monique Akanbi: I will say that is very enlightening to hear you say that Sunita, because I always say that the success of an HR professional is their ability to understand the entire business and understand the direction that the business is going in. So not necessarily be immediate need, but three, five, even 10 years now from now. Where does your organization fit into where the industry is going, things that are happening.

So I am so happy that you emphasize that because I truly believe that it's important as HR professionals to really understand the business and understand the direction of where the organization or the strategy of the organization. Consideration of external factors as well.

So Sunita, some employers are rethinking their talent strategies using what's called build, buy, borrow, and bot approach, as in strategies that focus on one, developing talent internally, two, hiring externally. Three, leveraging flexible talent. Four, integrating automation. How do you see HR teams balancing these options when planning for the future workforce, especially with the rise of AI?

Sunita Solao: Absolutely. I love that. Build by borrow and bot. Yes. I mean, listen, I think some of the things will stay the same and some of the things are new and different that we need to proactively educate and learn about and integrate them, as you're saying, the most notably bots or AI agents and ChatGPT. And how should we intersperse them into the talent strategy?

So the build and the buy, you know, the age old wisdom still holds, which every company, no matter the size. You have your talent, your high potential individuals who have the will and the skill, and you want to make sure that you know them and that you are investing in them and growing them, because that's the value proposition of a healthy employment contract, let's just call it that. You know, the employees are bringing their best and you are investing in them, allowing them to grow.

By proposition, the wisdom there hasn't changed, which is if this is not your core skill or your core capability, but this is important for your business to grow. If there's an opportunity to buy either the skills or the product or the technology to quickly augment, integrate, and grow the business. So the logic there remains the same.

Borrow is an interesting one, and I don't necessarily agree that we can put flexible workforce in the borrow category per se, but I think it's helpful to think about it in that way because independent workers will come and go maybe more frequently than your full-time workers. So we are, as we just talked about it, if there is a need for breakthrough innovation or if you need specialized skills very, very quickly, but maybe that's not something that you would need over a very long period of time in an FTE role. I think it's a great opportunity to go out into this independent workforce and borrow their skills for a small portion of time to address very specific needs that your company has.

The bot one. It's an important one because as we are all now learning and hearing that almost every aspect or every knowledge job will have some aspect of the job augmented by AI. I think it's now well understood, and our CEOs on the record, that AI is not going to take all the jobs away or most of the jobs away anytime soon. But what is equally true is that every job there will be aspects, especially knowledge work, which can be done and supported or assisted by AI.

So I think as HR professionals, again, we want to make sure we are working with our business in a few different ways. One is educate ourselves, whether you're in HR or any knowledge work, it's important that we understand these technologies. What can they do? What are their limitations? How can they support our business? So going out there, learning is very, very important.

As HR professionals, it's also our responsibility to upskill our organization. So we want to make sure that our employees, our independent contractors, are also proficient and fluent in the language of AI. So planning those trainings, making sure that your leadership team and your employee base is paying attention to this. It's no different from when like Microsoft Office came to the, for like, you know, we all had to learn how to do PowerPoint and spreadsheets. I talk to my employees in the same way. It's like we are in the age of AI and people who learn to use this will stay ahead.

The way I'm going with this is the more we understand which parts of every job can be augmented and supported by AI or bots as we call it, we can then bring back to saying, Hey, how does this job description change? Like, you know what skills and abilities we no longer need to have in the human job description because they will be augmented by the bot. And so naturally, the job descriptions and the skill required by the human for every job are going to evolve and change. So the more we understand that, the better we are able to integrate all of these four things into our talent strategies. So hopefully that addresses something to that you were alluding to.

Monique Akanbi: So Sunita, let's shift our focus on how, on advice for HR professionals and how they should directly work with these independent workers. What advice or practical advice can you offer HR professionals for successfully onboarding flexible talent, ensuring smooth experience for both the flexible worker and the full-time employees that they'll be working with. So just kind of integrating the two.

Sunita Solao: I am so glad you're asking this because this is often overlooked and it's one of the most important things to know or to realize, which is that just as any FTE I think, especially if we are bringing flexible workforce freelancers, independent workers, as a proactive talent strategy to drive innovation or improve your core business processes. It's very, very important that you do the onboarding.

I'll take Upwork as an example. The freelancers and independent workers that we bring in. They participate in onboarding alongside our FTEs, depending on the nature of the work. So they are learning our IT systems, how we communicate, how we share knowledge, how their department works, assign a buddy or a mentor to really accelerate their onboarding.

In some cases, it's even more important than for an FTE because typically, these individuals are coming in, they have a fixed timeframe in which they have a very specific project they need to deliver. So it's in our interest in the company's interest to give them the information they need and the support they need so they can hit the ground running. Perhaps even faster than some of the FTEs.

So prioritizing, onboarding, figuring out what might be some specific needs that only these independent workers for this project. So you could do bulk onboarding for this group of people if you're onboarding, say like, you know, 50 AI professionals to do a project. Yeah, so I think that's practical advice in carving out capacity and prioritizing this and not overlooking it, most importantly, is something that I would advise.

Monique Akanbi: Yeah, no, those were very good points of advice and I love that. Even at Upwork, the freelancers, they have the same experience in terms of onboarding as your FTEs. So some employers hire flexible talent on a trial basis before considering to offer the full-time role. What guidance would you offer HR for managing process from the initial hiring and communicating potential career paths to transitioning these workers from temporary to more of a permanent position?

Sunita Solao: Yes. You know, the thing here is there are two things. One is like you would approach any relationship, it's expectation setting, you know, and understanding where both parties are coming from. So I would advise that first, be clear about your intention saying and transparent, which is this is a position. It's a temporary position right now. But it's really intended as a trial because we have the intention to potentially convert this into a full-time role.

So be transparent and clear about that intention because you may find that some independent workers and freelancers are not interested in this because they want that flexibility, they want that autonomy, and they want to be self-employed. So if we are not clear from the beginning, your paths could be misaligned per se. So I think that's very important.

And the second thing is being clear about what is the scope, making sure that our deliverables, like as you would in an internship or a probation where you say, we want to make sure that you achieve these goals for these reasons. We are evaluating these skills and if you achieve these milestones, this could translate into a full-time thing. So clarity of expectations from a job and a work product standpoint, but also the nature of the relationship are two things I would say are very important to, for a successful outcome for both parties.

Monique Akanbi: Awesome. Are there any benefits to directly hiring flexible talent on a trial basis versus utilizing maybe like a temporary staffing agency?

Sunita Solao: Pros and cons? I would say, depending on the situation, I mean, the obvious benefit is that if you're not using a third party vendor, costs can be typically lower and, you know, all the benefit of the transaction goes directly to the independent worker or the freelancer. So that's the obvious benefit. And you cut out the middle person, if you will. So communication is faster. Two way, trust can be built and partnership can be built. The relationship can be built more directly. So these are the benefits.

Some of the cons or potentially things to think about, especially if you are a small business, there is some, there can be some administrative tasks like making sure you're compliant, making sure you know, benefits are paid, to the nature of the their W-2s and all is honored appropriately. And if you don't have the infrastructure to manage this as a small business, then sometimes it can be beneficial to go through a vendor who can then support you with these types of compliance tasks.

So like I said, I mean, really depends on your business and your situation on what really is the best way for you to engage them?

Monique Akanbi: Yeah, so Sunita, there are some myths with working with flexible workers and as employers increasingly rely on flexible talent, it's easy for outdated habits and misconceptions to influence how these professionals are viewed and utilized. Let's break down a few common myths about these roles and talk about what's really true in today's workforce. Are you ready?

Sunita Solao: I am. I could not wait to talk about these myths.

Monique Akanbi: All right. So first, flexible talent takes more training, handholding, and supervision than full-time employees. What's your take on this?

Sunita Solao: Absolutely not true and has certainly not been my experience, especially at Upwork because as you can imagine, we use our product heavily and liberally so we can learn on how to improve it. And in my experience, independent workers are highly motivated, they're self-employed. So having good leadership skills. Being motivated to deliver a great work product. They're motivated to train themselves. They specialize and build their own skills because delivering a good product, their livelihood depends on this repeat business, depends on this.

So in my experience, these people come pre-trained. In fact, they bring specialized skills that are other team members and FTEs can learn from in certain cases. So that has been my experience where they make our teams richer and more diverse and vibrant.

Monique Akanbi: Okay, next. Flexible talent can't contribute to leadership level as well as full-time employees.

Sunita Solao: Well, I mean, you know, many thoughts. First off. In today's world, there are examples where you will have fractional CFOs or fractional CEOs or even fractional chief people officers. And this is a flavor of independent work and freelancing. So I would say from the very top to every level in the company. You can have independent workers who bring a lot of experience, specialized knowledge and skill, and certainly leadership experience that can serve a company's needs depending on what type of situation they find themselves in.

And as I was saying earlier, like independent workers are self-motivated, they're driven, they're very good at managing themselves, organizing their work, making sure they're meeting their deadlines. So if we do good due diligence in interviewing the right folks, understanding their background, I think you can find very skilled and very motivated independent workers who can contribute in all types of ways to your workforce.

Monique Akanbi: One more. Alright. Flexible talent isn't invested in organizational success as much as full-time employees are. What do you, how do you feel about that one?

Sunita Solao: It's, how should you say what matters most? It matters that the work that needs to get done, the outcome that needs to get delivered so you can achieve business goals, that is what matters most. And FTEs and independent workers naturally come at it differently given the nature of their engagement. But is one better than the other in terms of driving company success or achieving business goals? Absolutely not, because FTEs are there for the long run. They are understanding company values, culture, delivering on their jobs and their outcomes.

Independent workers are coming in, and if we've done the right thing by having clear deliverables, understanding what skills are required, setting up defined projects, then they are equally motivated to deliver on those goals, deliver on their projects so you can achieve your business goals. So in that sense, I think the interests are very aligned. Why wouldn't they be? Because these people are small business owners, as we were saying, and they understand very well how important it is to make sure that deliverables are met, projects end on time so that business can be successful.

Monique Akanbi: Thank you so much for that. I love MythBusters because it's the themes me too, that people are thinking, but may not say or verbalize out loud. Right. So it's those spots that some people may have and being able to bust those myths are always great. So thank you for indulging me in that Sunita.

So to wrap all of this up, what is one piece of advice that you would give HR professionals who've never used flexible talent before, but now want or need to.

Sunita Solao: I said, listen, I was one of those HR professionals, you know, of course I am now paying all sorts of attention to this because I'm here at Upwork. So my advice is it's simple. Try it and trust me, given the movement that it is, we talked about nearly a third of the workforce is interested in doing this. This generation and future generations are only going to want more of this.

So try it, learn how it works. Benchmark with other companies. And what you'll find is that you will, your business leaders will thank you because you'll bring them interesting, bold, creative ideas on how to think about their talent strategies. Use your investment in human capital more thoughtfully, be more cost effective, be more creative, drive innovation. So it's just a matter of trying it. And you might be, you'll unlock something that'll be new and different that you can help to make your businesses better.

Monique Akanbi: Thank you so much, Sunita, for sharing your insights with us.

Sunita Solao: Thank you, Monique. I love this title, by the way, Honest HR. It totally speaks to my heart. It was so much fun.

Monique Akanbi: Same here. That is going to be it for this week's episode of Honest HR. We'll catch you next time. Hello, friends. We hope this week's episode gave you the candid tips and insights you need to keep growing and thriving in your career.

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