Members of the "alternative workforce"—contract, freelance and gig workers—make up a sizable share of the global workforce and represent an opportunity for employers to access talent in more flexible, on-demand ways.
But HR industry thought leader Josh Bersin has found that most organizations are not prepared to take full advantage of the burgeoning freelance and gig-work economy.
In a new report published by HR People + Strategy (HRPS), a Society for Human Resource Management affiliate, Bersin said he was "surprised to see a fundamental misalignment between many leading practices that organizations use for their permanent employees and those they consider important for independent workers."
The research examined how organizations are using 17 practices to recruit, onboard and manage independent workers, and integrate and align them with permanent employees.
"To successfully adapt to the realities of the future workforce, company leaders must understand the trends associated with the alternative workforce, as well as develop a more holistic view for sourcing talent and retaining different types of employees," said Lisa Connell, executive director of HRPS. The study included a survey of 197 primarily senior HR professionals from across a range of industries.
Bersin explained that most companies still view independent or contract workers as outsourced, temporary talent for transitional or tactical needs instead of as a strategic talent pool.
"Companies have been using freelancers in various capacities for decades, but it's the delivery model for engaging freelance talent that has evolved," said Zoe Harte, senior vice president of HR and talent innovation at Upwork, one of the crop of emerging talent networks and gig-work websites that have made it easier for organizations to locate precisely the workers who have the skills those companies need.
[SHRM members-only toolkit: Employing Independent Contractors]
Integration and Alignment
Organizations participating in the survey were best at integrating independent workers into the organization. "Physically and technologically, there tend to be few barriers to adding independent workers to existing communication or collaboration tools," Bersin said.
Sixty-five percent of the organizations polled said they encourage collaboration and information-sharing between permanent employees and independent workers. Sixty percent said they facilitate onboarding of newly hired independent workers. But some respondents said they use separate onboarding processes for independent workers and exclude them from staff meetings and team-building events.
"Freelancers are only as successful as you set them up to be," Harte said. "As the use of independent workers continues to increase, it's imperative that companies develop consistent processes for how they inform and communicate with the team, including how they welcome freelancers, set expectations and measure outcomes. These are vital building blocks in helping ensure your freelance program is successful."
One practice that sets high-performing organizations apart is having a high-level view of the combined workforce to make more-efficient use of resources or quick decisions about when to scale up, scale down or fill skills needs.
New contingent-workforce management systems make this possible, and more of these tools are being built into core HR systems.
Recruiting Differently
Recruiting independent workers may be similar in practice to recruiting full-time employees, including when employers seek to provide a positive candidate experience and screen and evaluate for fit and competency—but there are also important differences.
"The differences lie in personal priorities," Harte said. "While full-time employees may place a higher value on benefits and office perks, freelancers place a premium on having the freedom and flexibility to choose where and when they work, which clients they work with, and which projects they accept. Studies show that the top reason employees leave their full-time jobs to work independently comes down to control—control of their schedule and of the work they do."
While the differences are challenging, high-performing organizations are adapting their recruiting efforts and messages to the independent workforce, according to Bersin. "Our data tell us that they are more likely to use freelance markets to meet their needs and maintain control of the recruiting process, rather than outsourcing it to agencies," he said.
Developing Independent Workers
Giving freelancers growth and development opportunities can help organizations retain strong relationships with independent workers, but most organizations offer freelancers few of these opportunities, the survey found.
Only 16 percent of respondents said their employer provides career planning for independent workers, 26 percent offer coaching opportunities, and 30 percent offer personalized learning and development.
There was an exception: Smaller organizations were a little better at supporting the growth and development of independent workers. "This may be because smaller organizations have more flexibility in how they relate to independent workers or are unfettered by complex internal processes and systems and legal departments designed to keep the organization from being sued," Bersin said.
Recommendations
Here are a few recommendations to help your organization understand and better utilize the new alternative workforce:
- Shift management of independent workers from transactional to strategic and collaborative.
- Centralize data about your permanent and alternative workforce in one system to facilitate the establishment of contracts, issue payments, and compare annual spending on independent workers with spending on permanent employees.
- Update HR policies, processes and philosophies to provide independent workers with a more positive experience.
- Use technology to provide independent workers with more effective and efficient onboarding, project workflow and information-sharing tools.
- Welcome ideas from your alternative workers, and encourage permanent workers to collaborate and build relationships with independent workers.
- Give clear and ongoing recognition to independent workers who demonstrate their value to your organization. "Supportive organizations can further strengthen the freelancer experience by providing honest, substantive feedback on how a project went, fully tapping into freelancers' expertise and interests when providing projects, and providing opportunities to participate in information sessions," Harte said.