While Uber and Lyft have popularized the concept of the gig economy, the truth is that gig, freelance or contract workers have been around for a long time. In fact, I’ve been one of these since 1981, when I first started writing business articles for a wide range of trade and business publications. I’ve worked remotely with publishers and editors for years — most of them I’ve never physically met. My interest in the gig economy, which traditionally had been referred to as telecommuting, led me to research and write a book on the topic some years ago.
Growth in the gig economy
At that time, the concept hadn’t taken off to the extent that it has today. Most commonly, companies seemed comfortable working with remote workers when they had prior relationships with them. For instance, an existing employee is relocating for family reasons and you don’t want to lose their talent and contributions, so you make arrangements for them to work remotely. The concept of hiring someone initially as a contractor, sight unseen and with no face-to-face interaction, really hadn’t taken hold to any large degree.
Time and technology have changed that, though. “Independent work: Choice, necessity, and the gig economy,” a 2016 study from McKinsey Global Institute, found that “up to 162 million people in Europe and the United States — or 20 to 30 percent of the working-age population — engage in some form of independent work.” The number may be even higher — about 36 percent of the workforce, or 57.3 million Americans, according to the research report “Freelancing in America,” from Upwork and Freelancers Union. These numbers are predicted to grow.
A view from both sides
We’re one of the many companies that take advantage of the talent that freelancers can bring, especially for small companies. Our business is virtual — we work with contractors and interns, but they’re not physically located in the same place as we are, and in a couple cases, we’ve never even met our contractors; they came to us through word-of-mouth referrals.
We also work virtually with a wide range of individuals and organizations, sometimes entirely independently and sometimes as part of a virtual team.
We’ve learned two things about the state of the gig economy through our work: there’s a great field of talent to choose from, and there’s a great deal of competition among freelancers and contractors. That second piece is great news for businesses in the Chippewa Valley looking for talent they haven’t been able to find locally or wanting to tap into new sources of innovation and experience from contractors around the country — or around the globe.
Benefits for both companies and contractors
There are many benefits on both sides of the gig relationship. Chief among these for employers include the ability to cast a wider net to find talent, especially in fields or roles where top talent is at a premium: web developers, for instance. Another big benefit for employers is the ability to take on less risk in terms of long-term employment relationships — they can ramp up to fill an immediate need and end the gig relationship when the project is done. They also gain value from the range of experiences that the contractors bring to them from the others gigs they’ve had. As we work with clients, for instance, we often learn about new tools, technologies and techniques that they’ve found to be useful — or not — in their content marketing efforts.
There are drawbacks
For employers, one of the biggest potential drawbacks of contract relationships is the risk that may come from inaccurately classifying someone as a contractor versus a regular employee. The IRS is increasingly concerned about these classifications, as they drive tax revenue in the form of Social Security and other tax withholding requirements. Uber and others have learned this the hard way. When classifying workers, it’s important for organizations to get advice from legal counsel to ensure they are following guidelines appropriately.
Another drawback for employers is that they don’t have the full-time attention of these contract workers who, by definition and according to the law, must be working for others as part of the definition of being a contractor.
Depending on the role and type of work that needs to be done, employers may also feel that they need to have talent on site to allow for critical interactions between members of their team, or to ensure that workers have a high level of knowledge about the company’s products, services, market and culture.
For contractors themselves, there are also some drawbacks—these include the temporary nature and uncertainty of the role and, for some, the loss of person-to-person contact they may have enjoyed in traditional employee roles.
Overall, though, we believe the benefits far outweigh the drawbacks for both employers and their contract, freelance or gig workers.
A blended model
One model we’ve seen, and participated in, that seems to draw the best from both worlds — internal and external talent — is virtual marketing teams led by either a contractor or senior marketing staff members and populated with a combination of internal and external talent. While our work is in the area of marketing, this type of blended model could readily work in other areas of the organization: e.g., human resource management, finance and accounting, IT, etc.
Sources of talent
While hiring managers still use tools like classified ads and postings on job sites like Monster.com, LinkedIn has emerged over the past several years to become the go-to resource for finding talent — whether full time or contract/freelance. Through LinkedIn’s advanced people search and the wide range of filters offered, you can drill down to find candidates with key skills you’re looking for and the right experience level and background. You can cast a wide net geographically when recruiting contract/freelance talent because these gig workers can physically be located anywhere. Another big benefit of LinkedIn that recruiters love is the ability to connect with “passive” candidates, those with other jobs/gigs who aren’t actively seeking new opportunities. In addition to the ability to search for potential candidates to reach out to, LinkedIn’s advertising options can help you to get your contract job opening in front of the right people more broadly and extremely cost-effectively.
In addition to LinkedIn, there are a wide range of other online sources of talent, particularly from the gig economy. Some other popular sites include: Fiverr, Upwork and Virtual Vocations.
Depending on level of experience and expertise you need, other great sources of contract workers are local schools and universities through their internship programs or career services.
If you haven’t yet considered how the use of contract staff might help your organization find top talent to drive organizational objectives, now may be the time. It’s certainly a model that is gaining traction across a wide range of industries and areas of operation.