Contingent or non-permanent work in the United States is booming. By 2020, it’s predicted that the number of freelance workers will be greater than full-time employees. And a September 2014 survey by the non-profit Freelancers Union pegged the number of U.S. freelance workers at a whopping 52 million—up from just 10.3 million in 2005.
The way employers find workers—and the way workers find employers—is undergoing a sea change. The benefits of hiring freelancers are clear: no need to pay full employment and retirement benefits; no vacation entitlements; you can engage and disengage them as your business needs dictate; and in most cases, they don’t require office space.
One fast-growing path to finding skilled temporary workers is through online labor exchanges such as Elance, Freelancer, and Guru. The emergence of these exchanges has given organizations an opportunity to tap into highly skilled, lower-cost resources, virtually on-demand. U.S.-based Elance, for example, counts more than eight million freelancers and two million clients among its ranks. Its primary competitor—Australia-based Freelancer—claims to link more than 13 million employers and freelancers around the world.
The vast majority of organizations using online labor exchanges are small outfits. Many are single shingle operators searching for very specific skills to work on a very specific project. So why have larger organizations been slower to adopt this new way of finding temporary workers?
We believe it’s because most still operate in the paradigm that says there’s one job for each person. They identify a need for certain skills to deliver a business outcome, a job is defined and then a person is identified to fill it. Sometimes it’s a permanent employee—other times, it might be a contractor.
In fact, many smaller organizations have reached a new evolutionary plane when it comes to looking at how work gets done. This is because, at least in part, they must rely on being nimble and creative just to survive.
If larger organizations want to harness the benefits of skilled resources available via online labor exchanges, they’ll need to think outside the traditional model of one job for one person. The key is to break any job or project down into its constituent tasks or components. In fact, there are lessons to be learned here that can be applied even to traditional contingent workforce programs.
Case in Point: Creating a Simple Website
When launching a new Website, most organizations would assign the job to one person. But building an effective Website requires specialization in several different skills—branding, user experience, design, technology platform, content development, search engine optimization, implementation, and analytics.
A skilled marketer could, in theory, deliver all of these elements from start to finish. But the likelihood of finding that one person who excels in every one of these areas is virtually zero. Their depth of knowledge will be far shallower than a specialist in any given area.
A more effective approach would be to distribute specialist tasks to freelancers or contract workers. The investment required to engage freelancers on a project basis is far more cost-effective than retaining the skills as part of a team, and the level of specialization brought to the project is much deeper. Just as importantly, the final product likely will be significantly better.
It’s essentially a development project approach. You look at discrete and defined parcels of work, and determine whether they can be best executed by a permanent employee, by a contractor, or by specialist freelancers with the skills and expertise related to each task or component.
Getting It right
Transitioning to this approach isn’t just a question of compiling a dream team and telling them to “go for it.” Whether you follow the route of an online labor exchange or a more traditional contingent workforce model, there are multiple factors to consider before embarking on such a project:
- Identify what kind of work can be split out, and the dependent factors: risk, on-time delivery, quality, existing under-utilized skills, potential efficiencies, impact on workflow.
- Specify the work that needs to be done, and don’t leave anything out. If a job isn’t briefed correctly, it can’t be delivered correctly. Define exactly the objectives, outcomes, and expectations before you even start to identify potential freelancers.
- Identify where the work can be done. Do you need to have a specialist sitting in your office to do the work effectively? Or can they be managed and monitored remotely?
- Identify how you will source workers and who will be the best fit for the work you need completed. Online labor exchanges such as Elance, Freelancer, and Guru make the process relatively turnkey, but there are a multitude of Websites, marketplaces, and other channels that can be used to identify freelance specialists—including some focused on specific areas of expertise such as marketing, computer programming, even engineering.
- Don’t cut corners when selecting your team. Screen the freelancers diligently. Establish their credentials, check their references, ratings, and feedback from other projects. Ensure you know what you’re getting.
- When the project launches, make sure to carefully and consistently review and manage outputs, review processes, measure against the job specifications, and provide regular feedback on quality and progress.
Following these steps will enable you to make an informed decision about whether an online labor exchange—or a similar channel—is a viable option for your project. And if you go forward, it’s a helpful roadmap to drive success.
Mark Jones is head of Operations-Americas for Alexander Mann Solutions, a leading global talent acquisition and management firm. He has 20 years of talent acquisition experience and is a leading authority on Contingent Workforce Solutions (CWS).
George Vollmer is Client Services director for Alexander Mann Solutions. Vollmer has 20 years of experience in all aspects of human resources account development and management, service delivery, and global business leadership with blue-chip clients. For more information, visit http://www.alexandermannsolutions.com
