HR, it’s time to embrace the freelance revolution. Freelancing isn’t new, but the rapid, global, growth of freelancing is new. The tech that enables freelancing is new and, together with remote work and flexibility trends, its changing the way we build a workforce and manage talent. HR has never been more important, but only if it plays a larger and more strategic role in embracing the freelance revolution.
Because the freelance revolution is more than gigsters. What you’ve heard about the freelance revolution is incomplete. Yes, gigsters are out there combining multiple jobs to make a living on TaskRabbit or driving for Uber. But, while gigsters get most of the publicity, it’s the other group – highly qualified and experienced, independent experts and specialists, or freelancers – who are changing the way organizations obtain needed expertise and staff critical projects.
Because freelancers are a large and growing population, and offer unique advantages. Mary Meeker and others estimate approximately 8-9 million full-time freelancers working through online talent marketplaces in the U.S., and growing as a population. In our research for Agile Talent, executives explained why over 90% of organizations now depend on freelancers, and 75% are increasing their reliance: (a) access required expertise, (b) reduce startup time, (c) attract top experts who are unavailable or too costly if full-time, (d) manage cost and scope, and (e) teach and transfer experts’ best practices to internal staff. In combination with remote work tech, enabling access to truly global talent on a cost advantaged basis, a flexible blended workforce provides a powerful talent quality and cost advantage.
Because full-time employees are acting more and more like freelancers. Employee loyalty is all but dead, but then so is employer loyalty as indicated by GM’s plan to lay off many thousands of employers simply in anticipation of a recession. No surprise then to learn from Deloitte that half of millenials will leave your company within two years, and from Gallup that 60% of employees are open to a better offer from a competitor. In fact, a third survey found that 45% of employees applied to a competitor’s opening within their first year. Add the importance of flexibility to a majority of employees. Millenials and gen Z’s are increasingly freelancer in spirit, and open to working as part of a flexible blended workforce.
Because the blended workforce needs HR leadership but will happen nevertheless. It’s already here. Upwork estimates the total U.S. freelance population at over 50 million individuals. McKinsey sized the freelance population at over 150 million individuals world-wide. Deloitte and PwC both predict that organizations in the future will have large contingents of freelancers supporting them and Accenture asserts that future organizations may have only a small minority of full-time employees. As the American folk expression goes, this horse is out of the barn. HR leadership can make a substantial difference; after all, HR knows how to manage talent and change. But, the function must step up and embrace a larger vision than traditional employment in a traditional organization. After all, as a function we’ve talked about the blended workforce ever since Charles Handy described the “Shamrock Organization” in the Age of Unreason.
Because external talent management should be part of HR’s talent brief. Although organizations are increasingly reliant on freelancers, HR tends not to be involved, typically choosing to leave this part of the workforce to individual managers and procurement. This is a mistake. In an article for HBR, 10X Management co-CEO Rishon Blumberg and I propose an external talent management role for HR, at a senior level, that incorporates both recruiting and freelancing, and is responsible for building productive relationships with key online talent marketplaces and talent pools and communities.
Because HR is at risk of being disrupted if it does not transform. In fact, as powerful a voice as Ram Charam’s argued dividing HR up as follows: “My proposal is to eliminate the position of CHRO and split HR into two strands. One—we might call it HR-A (for administration)—would primarily manage compensation and benefits. It would report to the CFO, who would have to see compensation as a talent magnet, not just a major cost. The other, HR-LO (for leadership and organization), would focus on improving the people capabilities of the business and would report to the CEO.” If so, how long would HR be HR until the administrative aspects were outsourced or given over to finance, legal or other appropriate groups.
Because Upwork, BTG, Catalant, Twago, EXPERT360 and other online talent platforms are potentially challenging traditional talent management. A powerful new trend among online talent marketplaces is helping organizations create their own proprietary internal/external talent platforms, the expertise of firms like MBO Partners and Talon FMS . This will provide organization leaders at every level with broad and deep talent insight and the ability to map business needs against the internal employees and the external freelancers that together make up the organization’s flexible blended workforce. New platforms bolt on as appropriate, for example Parker-Dewey which offers vetted college students for mini-freelance roles that offer a “pathway to career”. employment, or Jolt which offers digitally delivered career training. Add to this a connection to relevant recruiting sites. Altogether, HR either has great partnership and extraordinary tools – or it will have serious external competition for its most strategic role.
Because managers need skills in how to manage freelancers. An important HR contribution is teaching managers how to work with blended teams and senior and experienced freelancers, and talk about the role of freelancers in the total workforce. A recent Toptal survey I advised found that front line and mid-level managers often lack the skills and tools for managing a blended team that includes both remote and on site working freelancers. The effectiveness of a flexible blended workforce depends on how well managers at all levels understand the potential of the blended workforce, and build strong team and individual freelance relationships.
Because this will help to accelerate HR’s digital transformation, which is essential. To this point, HR as a global function has invested relatively little in building tech and analytic savvy. A recent study by Leapgen found that fewer than 25% of HR departments have a well-defined and comprehensive digital HR strategy, and a third of HR organizations lack any digital strategy whatsoever. According to an Upwork survey, less than half of organizations have a clear remote work policy despite the demonstrated cost and productivity advantages of tech enabled remote work. Add to this my recent survey of HR executives: 85% of HR leaders reported little to no priority on freelancers or working with the executive team on a flexible blended workforce strategy.
Because HR and finance must work more closely together to implement the blended workforce. Mars Wrigley leaders talk about the two “wingmen” of a GM: the HR lead and the Finance lead. As organizations turn more explicitly and strategically to a blended workforce, that relationship becomes even more important. Its more than procurement, though that is certainly an important aspect. At a vision level, HR and Finance must work together to deliver a total workforce strategy that delivers the right blended talent, at the right time, at the right cost, and with the right incentives to perform.
So, for all these reasons, and more, I’m excited about the potential partnership of HR and the freelance revolution. As Bogart said to Claude Rains in Casablanca, “I think this is the beginning of a beautiful friendship.”
See my article “How ready is your organization for the freelance revolution?” to learn the six actions leaders must take to build a