The rise of the freelancer

Guide

How on-demand talent can solve your staffing challenges

If there is one challenge that every small and medium business owner shares, it’s people – recruiting and retaining the right talent to get everything done, meet client expectations and grow a profitable business.

What’s more, the cost of staff is also probably a significant proportion of your budget.

So what if there was a simpler way to get professional expertise into your workplace, without significant outlay or commitment? There is, and it’s the reason a growing number of organisations – of all sizes – choose freelance talent to help them cover seasonal peaks in demand, specialist projects or unexpected deadlines.

“It’s definitely a trend we’re seeing,” comments Ros Coffey, Global Human Resources Director for Macquarie's Banking and Financial Services Group. “Larger businesses have been doing this for some time – especially for IT skills. But now you can find a qualified, professional freelancer to fill almost any type of professional role, whether it’s frontline or support staff.”

If you’re running a lean business to keep overheads low, the loss of a staff member (or additional workload) may push you into a rushed hiring decision.

“It’s natural to think it’s better to have someone in place,” says Coffey. “But sometimes that can lead to a sub-optimal hiring decision, which can be both costly and distracting. A freelancer or contractor can help you plug that gap under different terms, while you work out what you really need for the long term.”

She notes this requires a change in mindset.

“If a full time worker leaves, the instinct is to replace him or her with another. But what if you could get the same tasks done with a flexible worker, or a freelancer over a short-term period? You may get a higher quality outcome, sooner, and give your business the breathing space to make a well thought out, longer term decision.”


A different type of ‘temp’

Put aside any thought of clerical, agency-placed temp staff. The new breed of freelancers have a lot more to offer – because they typically have deep expertise to draw on in other businesses and sectors.

For example, they could include parents seeking to work under more flexible conditions, and older workers looking for more control over the projects they say ‘yes’ to.

“That’s the true meaning of ‘freedom’ for freelancers – the opportunity to have more choice, to continue doing interesting work and to pick up new ways of thinking along the way,” explains Coffey.


The freelance advantages

  1. Flex up and down your workforce
    This is an effective talent strategy for all types and sizes of businesses, because it allows you to meet the cyclical or project-based demands of your business without dedicating full-time resources.
  2. Low-risk and cost-effective
    Typically, you won’t need to worry about PAYG, superannuation, paid holidays or sick leave. It's also usually a short-term commitment, making that hourly rate (or project fee) a lot more affordable.
  3. Opportunity to trial and experiment
    For both the employer and the freelancer, it’s a chance to see if you’re the right ‘fit’ – and test the potential and opportunities within a specific role.
  4. Gain a fresh perspective
    We know diversity of thought can lead to better idea generation and collaboration. This is another great way to get a new point of view within your teams. 
4.1 million Australians did some form of freelance work in the past year and more than 30 per cent of the workforce are now ‘contingent’ workers.


Adapting to a freelance workforce

There are a few considerations for both employers and freelancers to make sure this is effective for both parties:

Make sure expectations are clear
“The real difference with a freelancer is that there is an agreement to deliver something over a set period of time,” explains Coffey. “Set measurable milestones along the way to ensure everything is on track.”

That also means freelancers should be careful not to over-promise – or over-complicate what is required. “A day rate is not an invitation to take as long as possible,” advises Coffey. “Sometimes a project fee avoids misgivings on both sides.”

Help them reduce the learning curve
Even though they may have considerable expertise outside your business, freelancers still need support getting started. “You need to be available for them. Help them establish the relationships they need to get things done, explain your organisation’s processes, give them the resources they need to achieve expectations,” suggests Coffey.

Be close, but don’t micro-manage
Your freelancers should be treated as part of the team – invite them to team lunches or work functions. But respect they have their own way of working, and they know what they need to get done.

Be open minded
Again, this is important for both parties. Freelancers will have new ideas to share, but they will also have an opportunity to learn.


Finding the right freelance talent

There are many more freelancers out there than you might think – according to a 2015 study1 , 4.1million Australians did some form of freelance work in the past year and more than 30 per cent of the workforce are now ‘contingent’ workers.

And these numbers are growing. By 2020, academics predict as many as 40 to 50 per cent of the US workforce could be described as contingent2, attracted by lifestyle benefits and the ease of using high-skilled talent platforms.

“There is a marketplace now for this type of talent,” says Coffey, suggesting most reputable recruitment firms have access to freelance workers.

“There are a growing number of specialist sites online, where you can advertise or search for professionals,” she comments. “Even the major job platforms recognise the growing freelance candidate pool.”

It’s also worth considering micro-businesses, many of which are technically ‘freelancers’ – one or a group of talented individuals who can fill the role of an in-house employee on a project basis.

“Many small businesses in Australia are servicing parts of larger companies, effectively functioning as freelance talent,” explains Coffey. In some cases, this is like having several staff ‘on demand’ – scaling your resources up and down to suit the project.

However, it’s also important to consider the long-term implications if you become dependent on a freelancer.

“If you continue to bring in the same freelancer on an ongoing basis, it may be beneficial for both sides to discuss whether this might be better as a more permanent arrangement – and be mindful that employment law may recognise certain types of long term relationships as employment relationships, regardless of what is written in a contract.” says Coffey. “It will remove some uncertainty for your freelancer – and give you the chance to make the most of your investment in their talent.”

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This material has been prepared by Macquarie Bank Limited ABN 46 008 583 542 AFSL & Australian Credit Licence 237502 ("Macquarie") for general discussion purposes only, without taking into account your personal objectives, financial situation or needs. Before acting on this general information, you must consider its appropriateness having regard to your own objectives, financial situation and needs. The information provided is not intended to replace or serve as a substitute for any accounting, tax or other professional advice, consultation or service.