The growth of the gig economy, or workplace comprised of free-lancers and consultants, has been exponential over the past decade. The idea that the traditional way of working full-time is the only way to be successful with your career has slowly crumbled away. In fact, a recent study by SHRM and SAP SuccessFactors reflected that nearly 20% of workers prefer external work and approximately 33% reported earning more money as compared to in a traditional full-time employment role.
Given that so many businesses and employees have adopted the gig economy which often constitutes a remote workforce, how do companies best manage this growing trend. There are a plethora of challenges the gig economy presents for businesses that traditional full-time equivalents (FTEs) do not (and of course vice versa).
Below we’ve listed 5 common challenges, with counter suggestions to alleviate the issues, employers with freelance employees encounter.
1. General management issues – Whether consultants are working remote or onsite since they are not FTEs the expectations of being managed by a colleague may not be as clear cut as working with an employee who knows they need to abide by the employee handbook and is entrenched in the corporate culture on a day-to-day basis. Planning makes things a lot easier. Have a clearly defined reporting schedule which outlines the freelancers role and responsibilities. Try to standardize across the organizations department to streamline your processes for gig employees.
2. Accountability – As a follow-up to general management issues, accountability of a freelancers productivity may be hard to track. Project management tools are great ways to monitor work completion and asking consultants to track their time is a common expectation. You will learn quick whether the consultant you’ve contracted is on track with their deliverables and if they’re not address your concerns immediately before the grow out of control. Regularly scheduled check-ins are also a great way to create a consistent reporting system of the work being completed.
3. Compliance – Whether your employees are freelance or simply reside in remote locations make sure to follow local and state employment laws. There are also strict guidelines on what differentiates a freelance employee from an FTE. Make sure you have thorough documentation and reporting to support however you classify your employees. A great employment attorney can guide you and tools such as ThinkHR are a great way to take a pulse check on whether your operating procedures are in line with the law.
4. Communication – Since freelancers don’t necessarily follow the same work schedule as your FTEs their communication with other employees (and freelancers) can be challenging. Setting up channels to foster strong communication between consultants and FTEs can help mitigate some of these communication obstacles. Designate a slack channel or some other intra-office communication system and make both freelancers and FTEs alike aware of the key contacts and roles prior to and after freelancers complete their designated scope of work.
5. Turnover – Since freelancers are part-time they will often juggle multiple clients at a time. This can minimize their availability and ability to stay on for continued work. Again, planning is key. When you bring on a freelance employee create a thorough scope of work with your estimated expectations for completion time. If you have the ability, try to think through next steps for once the freelancer initial work is complete. Build out an adjunct scope of work with potential next steps for additional work if their designated project merits it.