Over the last decade the gig economy has transformed the way we work and do business.
Access to remote working has changed the definition of work and the workplace dramatically. Advances in technology continue to facilitate flexible and remote working, and austerity measures are a reality for us all. This has meant that employers have had to become super savvy about slashing costs by cutting back on fixed costs – one such option is replacing permanent staff with freelancers.
I would argue that the rise of the freelance nation has largely been a win-win from both sides of the desk. Employers experience financial savings with independent contractors, and lower their risk. Workers use freelancing to tide them over between jobs, to add to income, and some are in it for the flexibility and/or the professional challenge of being self-employed.
Like it or not, the gig economy is changing the landscape of work. Of course, hiring an independent contractor won’t always be the right call for all positions, but a freelancer or consultant, can be the perfect solution for short-term projects, tasks requiring specific or niche skills, one-off tasks, infrequent work or work that needn’t be performed 9 to 5 or onsite. Either way, as long as you categorise roles correctly, there are more ways than ever to find the right mix of in-house and freelance talent to grow your company.
So, why the constant media downer about gigging?
Lets face it – small businesses live or die on their hiring decisions, and a key strategic one is whether to hire on a permanent or freelance basis.
There are in essence two pretty compelling reasons for using freelancers or consultants as part of your people strategy:
1. Cost – You’re probably going to save yourself a chunk of cash
You have the ultimate control over exactly how much money you spend on each project. Even at a higher hourly or daily rate, you are only paying freelancers for the sole purpose of getting something done – so you can expect to save annually with a freelancer when you factor in not having to pay tax (and other ‘frivolous costs’ such as relocation and induction costs, staff benefits and training!!). If your freelancer is remote, you also reduce the need for office space and lower your office supply costs.
Let’s also not forget that the best freelance professionals are experts in their fields and understand their role in contributing to the bottom line of your business; playing a role in helping you to smash your strategic objectives.
2. Quality – You can seek out and hire only the best.
You can afford to seek out specialist consultants and freelancers who have gained complete mastery of their discipline over the years. If you want to hire a content marketer, then you’ll get someone who specialises in content marketing and nothing else. This is far better than having your sales associate make an attempt at content marketing because you simply can’t afford to hire another full-time employee.
And freelancers run their own business, which thrives on repeat work and repeat customers. They strive to turn in their best work, every time, to maintain the relationship. While staff members’ performance may have peaks and valleys, freelancers know the contract is always subject to renewal. You, the customer, are always king!
Ok, I own up. It’s not all entirely upside. There are a couple of contrary considerations that you will need to chew over:
1. Guarantee of availability – While hiring a freelancer is actually fairly quick, sometimes you need something done immediately. If situations like these are common, it would definitely be better to have someone on-site ready to go
2. Knowledge of your business – If you’re looking to develop clientele, a freelancer might not be the best choice. In-house employees are aware of everything that’s going on in the company, and can leverage that knowledge to your advantage when building relationships with clients. Freelancers don’t typically have that access.
3. Make sure they don’t become an employee – unless you want them to! With imminent changes afoot from HMRC in 2019, if you hire a freelancer who then becomes part of the furniture and in essence is an employee, then be warned – you need to be paying their NI to HMRC – or they will find you and possibly want all their NI owed backdated to when they first started and they may even want the tax owed by the freelancer to be paid back by you too!
However – there is a rather neat solution to this – if you work with a freelancer on a retained basis (a flat monthly fee for services when they are needed) you can largely manage out these two issues as you are in effect buying yourself a strategic partner. This way, you know your consultant, and they know you – you know how they do things, and you can trust in their availability, decisions and advice.
Did I mention that I was an HR consultant?! If you would like to chat with me about the pro’s and con’s of outsourcing in your business why not drop me a line or give me a call today for an initial chat about how we could work together.