Think you know what your independent workforce wants?
Hint: It’s not a full-time job at your company. Yet, many of the ways in which your company works to build strong relationships with employees can apply to your interactions with independent workers.
Provide challenging work, competitive and dependable compensation, and appreciation for a gig employee’s contributions, and he or she likely will work with your organization again. Treat your contractors and consultants like second-class citizens, and you’ll drive them away.
Traditional employees perform 83% of the work at today’s companies, but that figure is expected to drop to 77% in the next five years, according to a Willis Towers Watson survey of more than 900 organizations worldwide. Based on recent trends, Upwork and Freelancers Union forecast that freelancers will make up the majority of the U.S. workforce a decade from now.
Predicted growth in the independent workforce — particularly among highly skilled professionals — means companies need to consider today how to improve the value proposition for their most talented gig workers tomorrow.
“That’s a big shift for many organizations, to move beyond thinking of their engagement with gig workers as exceptions, to recognizing that this source of talent is critical to executing their business models,” said Ravin Jesuthasan, managing director of Willis Towers Watson in Chicago. “The progressive companies are saying, ‘We’re not going to treat this as a one-off because, going forward, it’s going to be a staple of how work gets done.’ And that’s why you’re seeing the shift from a transactional mindset to more of a relational mindset when it comes to dealing with contingent labor.”
A FORMAL AFFAIR
Experts agree that much of what creates a good working relationship between independents and their clients is based on formal structures that provide guidance and support throughout the process.
However, few companies have started preparing themselves to handle an influx of independent workers. Deloitte’s “Global Human Capital Trends” report found that only 16% of organizations surveyed have a formal set of policies and practices to manage their nontraditional workers.
This lack of preparation most often plays itself out in onboarding and paying independent workers in a timely manner. For example, a contingent worker might show up at a job site only to find out that no one has made arrangements for a computer or workspace. Or the company fails to make clear whom a remote worker should contact for questions and problems.
An ad hoc approach to hiring and onboarding freelancers strains the relationship between a company and its independent workers, said Gene Zaino, the CEO of MBO Partners, which helps enterprises strategically manage their independent workforce programs.
Zaino believes the process should be a joint venture of both human resources and procurement. But too often, Zaino said, companies rely on procurement to hire and process independent workers, creating a one-size-fits-all payment system that groups independents into the same payment and process categories as multimillion-dollar vendors.
He points to his company’s annual “Client of Choice” survey of independent professionals, which shows that freelancers care about good pay — but care more about quick payment.
“When you’re dealing with people who run one person companies and they’ve got to pay their mortgage, they can’t wait 60 or 70 days for payment,” Zaino said. “By the time they get onboarded, by the time they do their work and get sign-off on it, then they have to wait 60 days — you’re talking about three months before they can get paid. And that’s a blocker.”
Zaino encourages MBO’s client companies to pay their independent workers within 30 days of receiving an invoice, and even faster when possible.
Johnny Reinch’s own frustrations in getting paid for his freelance work led him to establish Qwil, a company that contracts with companies to provide estimates for payment dates, and to make advance payments to independent workers for their services.
Qwil is among several startups that aim to ease transactions between freelancers and clients, whether the issue is cash flow or workflow. Reinch foresees a time when freelancers band together, much like a guild, to seek out benefits such as health insurance. Until then, he said, companies such as Qwil will fill the gaps for freelancers in need.
“Income uncertainty is really the No. 1 pain point that a freelancer faces,” Reinch said. “Providing access to capital in a convenient way alleviates that pain point for your freelancer, who’s trying to put food on the table and make sure their bills are getting paid.”
"AN AD HOC APPROACH TO HIRING AND ONBOARDING FREELANCERS STRAINS THE RELATIONSHIP BETWEEN A COMPANY AND ITS INDEPENDENT WORKERS."
Freelancers go out on their own because they want to control the types of work that they do and when they do it. So, it’s no surprise that 94% of independent professionals in the “Client of Choice” survey said it was very important or somewhat important that their clients let them control their work and their schedule.
And it was just as important to those professionals that clients regard them as a member of the team.
Organizations that want to keep highly skilled independent workers must treat them like professionals — not create a caste system in which contingent workers are made to feel like outsiders, said Willis Towers Watson’s Jesuthasan.
He cited a pharmaceutical company that issued its contractors red badges and barred them from the company cafeteria and gym. The company later reconsidered its tact, deciding that its rules artificially separated people who needed to talk to each other.
“The organization quickly realized that the engagement between its contractors and employees was critical to powering the innovation it so desperately needed,” Jesuthasan said. “Innovation happens when people bump into each other and get a conversation going. Those conversations were happening in the lunchroom and the gym far more often than they were in the office. Once this organization removed those distinctions, they started to get a lot more collaborative, innovative behavior from their employees as well as their independent contractors.”
Companies can include their independent workers in brown-bag lunches about company initiatives, and in-house training programs for leadership and other “soft skills,” said Marion McGovern, author of “Thriving in the Gig Economy.” Professional development opportunities are golden to freelancers, who may not have access to such programs on their own, McGovern said.
To maintain compliance with federal employment guidelines, McGovern recommends that companies make such opportunities optional, and ensure that the training provided is not essential to the work that the freelancer performs.
“Informal trainings are the better way to manage that compliance risk,” McGovern said. “Soft skills training is an ideal topic to offer to freelancers, since it’s a personal development topic.”
Several experts also recommend developing a mini-orientation geared to independent workers, with the aim of introducing them to a company’s goals and culture.
The time that a manager spends upfront to prepare for a contingent worker will pay off in the final product, said Kerry Wekelo, the managing director of HR and operations at Actualize Consulting. The firm often uses independent workers, whether it’s the graphic designer who has worked for Wekelo for eight years, or the video editing company she recently engaged for a single project.
“When people understand how they fit into the bigger picture, then they’re able to contribute better,” Wekelo said. “Taking that extra time to explain and give them all the information they needed is important. And they’re more engaged too, because they understand the ‘why’ behind the project they’re working on.”
Creating a sense of teamwork can be as easy as introducing independent workers to the full-time staff, inviting them to team meetings, even via teleconference, and recognizing their contributions in a public forum.
Susan Plank, who freelances as a training consultant, recalled one conference she attended to help a client with a presentation. The client insisted that Plank participate in a team-building exercise with the other company employees at the conference.
“They said, ‘We want you to get to know people, to feel like you’re part of the team, because you can do better work that way,’” Plank said. “I wonder if companies are afraid to do that, to pull people into team-building activities. It can provide that sense of partnership.”
"ORGANIZATIONS SHOULD ESTABLISH FORMAL MEANS OF PROVIDING FEEDBACK ABOUT AN INDEPENDENT WORKER’S FINAL PRODUCT."
AN END, AND A NEW BEGINNING?
Independent workers focus on a single, finite project. But when the job is done, the relationship can continue, particularly if the freelancer has skills that an employer will need again.
Independent workers want to know that their clients value their work, said Diane Mulcahy, the author of “The Gig Economy.” Because the relationship between the independent worker and the client is based on specific expectations and deadlines, Mulcahy said, it’s easy for the client to determine whether the worker has delivered — and to provide appropriate feedback.
One important way to show appreciation for a job well done is to provide a written testimonial that the person can use in whatever form they need, Mulcahy said.
“They can put it in their brochure, they can put it in their marketing materials or offer it to other clients,” she said. “It allows them to have that testimonial as part of their social proof, out in the public domain.”
Companies that routinely use independent workers can establish platforms, or preferred talent networks, where desired or previously engaged workers can see upcoming projects and decide whether to bid on them, said Zaino of MBO Partners.
In addition, organizations should establish formal means of providing feedback about an independent worker’s final product, said Jeff Mike, who leads HR research for Bersin, Deloitte Consulting LLP.
Some of Deloitte’s clients have opened their employee feedback systems to contingent workers in hopes of creating a two-way dialogue between supervisors and independent workers, Mike said.
Going forward, that kind of dialogue also can help a company keep up-to-date on the needs of its best and brightest independent workers.
“We talk about the ‘listening organization,’ always listening to your workforce,” Mike said. “Creating consistent and continuous feedback between employers and their workforce is an important part. It provides an opportunity to develop a systemic relationship with this talent, where there’s a continuous conversation and you can determine which of their wants and needs and interests that you can offer.”
Trisha L. Howard is a freelance writer for WorldatWork.