HR leaders are increasingly incorporating contractors and freelancers into their workforce strategies. As Liam Neeson taught us in Taken, independent workers can provide a very particular set of skills.
McKinsey estimates that independent workers make up 36% of the US workforce, up from 27% in 2016. The growing market for freelance platforms and solutions highlights the growing popularity of freelancing, as companies like Catalant, Malt, Worksome, and Willa raised eight-figure funding rounds in 2021.
While companies had been using freelance and contingent workers more in the lead up to the Covid-19 pandemic, the mass adoption of remote work and the volatile talent market that followed have led more HR teams to consider this population as part of their workforce strategy.
“Folks have been much more receptive to hiring high-skilled labor, in pretty much every category,” Taso Du Val, CEO of the freelance platform Toptal, said.
How it happens. Freelancer platform execs told HR Brew that demand for their services typically comes from department heads with little to no involvement from HR.
“The functional or business leader is usually the driver of demand,” Du Val said.
A lot of the time, HR is a source of resistance, or indifference, Du Val said. He explained that HR is often “not convinced” of freelancers’ value and has historically had a more “rigid mindset” around the perceived limitations and barriers of incorporating contract workers into the overall workforce strategy.
Overcoming barriers. Tony Buffum, Upwork’s VP of HR strategy, said he experienced exactly what Du Val described during his career as an HR leader at companies including GE, Stanley Black & Decker, and FLIR Systems.
At the time, Buffum—who now helps HR leaders optimize their use of freelance and contract workers—said he thought maintaining culture would be more challenging if freelancers made up a significant chunk of the workforce; he believed full-time employees cared more about a company’s mission, and that freelancers were not as talented as their full-time counterparts.
“One of the key barriers is just a lack of understanding of what type of talent is available,” he said. Other barriers he’s observed from former peers include a desire to have employees working in the office and an inability to onboard and manage remote workers and hybrid teams. He and Du Val said the widespread advancements in remote hiring, onboarding, and management have made it easier to to overcome these challenges.
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Now that business leaders are more comfortable with teleworking and aware of the talent available through freelance networks, Buffum said, the most advanced HR departments are incorporating freelance workers into their annual planning, considering whether they can better address some of their needs.
Freelancers often have more specialized skill sets, can be onboarded faster than full-time employees, and can help companies reach new talent pools, according to a report from Deloitte. In today’s ever-challenging labor market, these benefits can support agility and solve staffing shortages.
Growing use-cases. Contractors have long been part of the overall talent strategy at companies such as Google, Apple, Meta, and Microsoft. What is changing now is the range of companies and departments relying on this type of worker, as well as how often they’re turning to them.
“In some cases, we see upwards of 30%–50% of an organization composed of contingent workers,” a May MIT Sloan Management Review report wrote, “and organizations increasingly relying on third parties to deliver some of their most essential services.”
The most urgent demand for freelancers is currently in accounting, IT and networking, and operations, according to an Upwork report, though 52% of hiring managers told the freelance platform that customer support will be among the top positions they’ll be seeking to fill in the next six months.
“It’s not easy. It’s a big culture change,” Buffum said, on HR using freelance and independent workers to address talent needs. “It’s a new muscle you have to build out, so it takes time for that to permeate multiple parts of the business in different functions. But the ones that have already started…five years from now, will be gangbusters.”—AK
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