GIG economy and freelancing: the big bet of large companies to keep competitive in the marketplace

Hiring freelancers is not just an effective, fast and inexpensive way of promoting the growth of small and medium-sized businesses. With the booming of the so-called GIG economy, independent talent is becoming increasingly popular among large companies as well.

Below we’ll tell you everything you need to know about this (not so new) working style, and how innovative corporations worldwide are making use of it as their competitive advantage in the market, according to the latest and most complete survey by Kelly Services, external consulting specialists.

Let’s go for it!

To begin with, what is GIG Economy?

Today, talent is focused on permanent professional growth over the seemingly stable “marriage” to one single company for life. New generations have developed very high expectations regarding the possibility of balancing work, life and personal passions with an income higher than the salary they’d get sticking to a 9-to-6 office schedule.

GIG economy, also known as “free-agent economy”, encompasses any type of business paid per hour, project, or for a short term. This includes freelancers from all professional areas, owners of small enterprises, independent consultants and entrepreneurs using new technologies.

If you have a closer look, what they all have in common is the fact that they’re not bound to an indefinite contract and they can enjoy from much freedom to do their job, besides the chance to shift between simultaneous or sequential projects.

GIG economy is tightly related to technology. Actually, many apps, remote work platforms and recently developed collaborative digital tools have to do with the increasing demand for qualified talent, on the one hand, and with the increasing demand for more flexible work alternatives for free agents, on the other.

Human Cloud: the sanctuary for freelancers in the GIG economy

Although GIG economy comprises very many ways of working, professions and trades, the main link to large companies is freelancers and independent consultants.

In this sense, the so-called Human Cloud platforms, designed for agents to share projects and proposals, negotiating conditions, sending deliverables and trading payments, among others, are the backbone of GIG economy. These platforms are also known as FMS (Freelancer Management System).

One of the key features of Human Cloud is that it enables a “Yelpification” process, that is, counting on the reviews and comments from the parties involved to rate both independent talent and contracting parties, thus building a public reputation that shows their work quality and compliance with the terms.

Basically, these digital tools offer them both, companies and freelancers, the possibility of becoming connected in an efficient and reliable way.

The skills that are most demanded from freelancers in the GIG economy are:

  1. Information technologies
  2. Marketing
  3. Design
  4. Engineering
  5. Research
  6. Development and strategic consulting

However, other areas are also on increasing demand, such as legal, admin and health.

Which is the current impact of the GIG economy across the world?

Below we list some of the most relevant data results from the survey by Kelly Services as regards the current situation of GIG economy:

  • Almost one third of the world’s labor force (31%) prefers the flexibility and freedom of self-employment.
  • Micro-businesses owned by independent freelancers make up to 17% of the US gross domestic product, generating almost 2.4 trillion dollars.
  • Platforms and Human Cloud applications make around thirty billion dollars a year in profits. (SIA)
  • 65% of talent managers in companies work or have worked with freelancers.
  • 62% of managers who’ve hired free agents consider them the workers of the future.
  • 73% of companies claim that the fluency and flexibility of the workforce will be one of the most important strategies to face the future dynamics of the market.
  • 81% of the talent managers outsourcing projects to free agents are millennials.
  • 97% of companies hiring freelancers state that they are pleased with the results.
  • At a global level, Asia heads the GIG economy with 84% demand (managers hiring free agents), followed by Europe, with 80%, America with 54%, and finally the US, with 47%.

How can companies make the most of GIG Economy?

When companies finally break away from the traditional paradigm of the full-time employee, they start making the most of a wider working universe. As a result, these talents can easily adapt to the corporate goals, helping the company become more competitive in the market.

As organizations improve their talent-attraction strategies within the GIG economy, they can reach significantly better business outcomes than those companies that still hold onto conventional models.

1.- Saving hiring costs and time

57% of companies hiring freelancers mention labor cost reduction as one of the key reasons.

An average 43% of companies working with free agents save min 20% in labor costs and those most strongly committed to GIG talents have three times more chances to save up to 30%. Plus, they have eleven times more chances to get significant competitive advantages.

2.- More independent workers

49% of companies hiring freelancers mention among their primary reasons the possibility of making the most of their know-how and experience, and 72% think freelancers are really committed to the quality of their work.

The profile of freelancers hired by large companies is marked by a high academic level and critical skills. They value professional development and constant growth, and they usually keep doing refresher training courses to increase their profits.

It is estimated that 75% of the free agents have chosen this working style for positive reasons, including personal empowerment and more professional opportunities.

3.- More versatile work teams

60% of companies hiring freelancers are basically trying to compensate the shortage of qualified talent for specialized projects.

Companies today are searching for ways to attract external talent in areas such as digital marketing and technology, among many others, with literacy of emerging trends.

4.- Constant innovation

Only 17% of large companies hiring freelancers focus mainly on becoming more innovative and competitive in the market. However, free agents take up constant updating, which allows them to contribute ideas and fresh projects, positively melting off the status quo.

It’s been proven that the more strategic the motivations of a company to hire GIG economy workers, the bigger their positive impact. According to Kelly Services, the fact that there are such few companies able to “see beyond” the traditional advantages of hiring freelancers opens up huge opportunities.

Which are the challenges of GIG economy for large companies?

A survey held by Deloitte revealed that only 16% of companies count on the layout, practices and policies to properly handle a wide range of working styles. According to Amy Angel, VP and manager of organizational culture at Kelly Services, the initial challenge is changing the mentality:

“Our clients are increasingly asking for talent attraction strategies and solutions that provide them with a competitive advantage for their organization. Our discussions with them are mostly educational, as there has to operate a change of mentality first”

When companies are asked about their challenges or fears as regards GIG economy in their workforce, on top of the list we find administrative difficulties (34%), inconsistency on work quality (30%) and problems of trust (32%).

Companies that achieved the inclusion of freelancers in a successful and innovative way have faced these challenges through an early transmission of the corporate culture, an overall on-boarding process and the use of the proper digital tools.

How to make the freelancer understand the corporate culture and feel part of it?

As well as most of large companies have a structured orientation process for new hires, the corporation aimed at making the most of GIG workers has to optimize on-boarding.

It’s necessary that both talent managers and organizational culture agents take the time to decide which methodology might be convenient to convey the corporate philosophy and vision to external and temporary workers. This is intended to increase the levels of mutual commitment and trust.

How to do on-boarding to an external worker

According to Jeff Miller, from the council of human resources of Forbes, one of the biggest mistakes made by companies hiring freelancers is assuming that the on-boarding process is not necessary for external or temporary workers.

However, we must clearly set the foundations about what we expect of communication and collaboration with the team, and that is achieved through on-boarding. Otherwise, the work might be of great quality, but the experience of their integration will surely not, leading to discomfort and potential annoying situations.

Independent professionals often work on more than one project with us, and the general expectation is to get a permanent ally readily available to help us with similar projects, not a simple employee who we’ll contact just once.

For that reason, it’s essential that all new independent workers go through an active process to shorten their learning curve and help them adapt to the communication style of internal employees from the very beginning.

65% of companies with good maturity rate on their talent attraction processes within the GIG economy think that conducting an on-boarding program is really effective to speed up and enable the commitment and fluency of free agents.

How to deal with in house team so that they don’t feel “threatened” by external talent

Experiencing difficulties in talent integration and reluctance on behalf of employees is the fourth main concern of talent managers when hiring freelancers.

In order to solve this problem, it’s necessary to promote a change towards flexible work patterns all over the organization, not just external workers. It’s about changing the work culture so that everybody, as far as possible, can be more independent and self-organized.

Innovative companies in as much as GIG talent integration are 47% more prone to foster independence all over the payroll. On the other side, Jeff Miller says that full-time workers and GIG workers present really different profiles, so they also require different leadership styles.

In general, leading remote workers or work teams has a lot to do with learning once again to establish realistic expectations for everybody, providing each with all the necessary tools to fulfill their jobs, setting the most convenient follow-up system and, basically, respecting the delivery schedules and deadlines.

How to overcome the administrative and quality difficulties when hiring freelancers

Administrative setbacks and quality inconsistency are the main concerns of those companies which are still reluctant to join the GIG economy. However, many platforms of Human Cloud such as Workana can solve both challenges, as they offer a simple and reliable environment for contact and negotiation.

At Workana you can find all sort of independent professionals with reviews and comments from other users about their performance. Besides, you can rest assured for our system grants you’ll be delivered the work in good time and manner before the payment is released to the freelancer.

In addition, we have a staggered-commission system that promotes long-term relationships between companies and freelancers –the more projects you complete with the same ally, the smaller the commission rate will be.

There are lots of opportunities of growth and innovation you may open up for your company through independent talent. Start now!

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