Freelance Economy And Corporate Employer: Threat Or Opportunity?

How to cope up with the rising freelance economy

The freelance economy has disrupted may industries and business models to date. It impacted people’s travel, transportation, and shopping experiences, to name a few.

But with the continued growth of the freelance economy, and the evident role it plays in the future of work (in particular as it pertains to skilled workers) more and more companies have to rethink their employment models and methodologies. And not because their businesses are impacted by a certain marketplace, but by the mere fact that they are employers, and all of a sudden, their employees have new opportunities that were not available to them in the past.

The share of freelancers in the U.S. workforce is expected to reach 43 percent of the U.S. working population by 2020 according to Intuit.

Moreover, according to MBO Partners’ 2017 State of Independence report, those freelances are more educated and make on average more than the median U.S. family household, with 20 percent making six figures a year. They are reported to be healthier and happier than the average employee.

The real takeaway is that freelancers are choosing to be their own boss, and as a result are staying away from “traditional” 9–5 jobs. Not only is this wave coming, it’s almost universal, with freelancing embraced by all age groups and split nearly 50–50 between men and women.

With freelancers accounting for nearly half of the workforce, traditional employers can no longer ignore this trend when planning their headcount growth.

As an employer, you are not only competing with other companies and their compensation packages and perks, you are competing with the employee’s choice of a different lifestyle, with the freedom, flexibility and growth opportunities available through the freelance economy.

When some of the risks of having an independent business are offset by the flexibility, tools and financial opportunities freelance economy platforms are providing, employees now have more reasons to ask themselves, “Do I want to work for someone else or be my own boss?” Employers can cope with this this trend in two ways:

Create Entrepreneurial Spirit within Your Organization

Employers must consider how to allow talented individuals to find the place to grow, unleash their creativity and have the freedom and flexibility they are looking for outside the traditional employment structure.

As our CEO, Micha Kaufman explained in his article on The Entrepreneur, at Fiverr we created “a company of CEOs,” where each employee is empowered to lead his or her domain, with management serving more as a “board of directors” to oversee the team’s progress.

Using this approach, employees are enjoying the feeling of freedom, accountability and control that many seek through an entrepreneurial path. We know that some of them will eventually choose to move on and create their own businesses, and we don’t try to stop them. We practice what we preach both within our community of freelancers and within the Fiverr family.

While this model might not work for every company, everyone should consider how to weave the entrepreneurial approach into their culture by finding work models that enable more empowerment.

Another way to attract and retain employees is to create a sense of purpose.

Research reveals that Millennials in particular weigh a career driven by purpose more than they many other attributes, including pay. Companies that have a mission to make the world a better place, to positively impact major trends in health, environment, sustainability etc. will be highly attractive compared to companies with an offering focused on financial considerations only.

If You Can’t Beat Them — Join Them

In addition to finding ways to model freelance economy characteristics, many companies are beginning to consider the flip-side: If there is a multitude of talent out there that is not interested in a 9–5 job, (or in other words, if nearly 1 of each 2 candidates is interested in keeping an independent status) can organizations utilize this workforce and leverage it to their advantage?

Outsourcing has been out there for many years.

The advantages to the organization were always clear — You can scale up and down quickly, you have more flexibility and lower costs compared to fluctuations in your workforce, but in the past many believed that the price you pay for this flexibility is lower quality of work — since the top talents would want a permanent position and not work through outsourcing companies.

That is no longer the case. Companies can now enjoy the flexibility of hiring freelancers paired with high-quality workers that want the freedom to choose their projects, and with the help of online platforms can find ways to organize and monitor freelancer work. This leads many companies to think creatively on what their organization should look like going forward and move away from traditional structures and models.

The definition of “Work” as we know it is changing. New trends bring new challenges to HR leaders, but with the right approach and open mind it can lead to opportunities — Opportunities to create more diverse, more scalable and more creative organizations.​​​​​​​

Originally published at www.hr.com.