HR and the Contingent Workforce: Where Is It Going?

HR and the Contingent Workforce: Where Is It Going?

The gig economy, the human cloud, the 1099 workforce--whatever you want to call it, using contingent workers to create a work group or develop a product is here to stay.

Rapid workplace change and the rush to market leave many companies without the skilled workers needed to stay competitive. At all levels of education and experience, individuals working as freelancers, or as contractors, are available for hire--without training, long-term commitment, or benefits.

The pros and cons of the gig economy are still up for debate, but include:

• Specialized help on demand: Chief Executive Officer of the consultancy group, MBA & Company, Daniel Callahan describes the advantage of contingent workers as, "You can now get whoever you want, whenever you want, exactly how you want it. And because they're not employees you don't have to deal with employment hassles and regulations." Managers, HR personnel, and recruiters who identify a need for talent are able to assess and onboard without the need to hire. Projects and objectives once out of reach due to the limitations of workforce training or experience are now feasible with temporary, skilled help.

• Loss of creativity, consistency: Competitive companies understand the importance of human capital. The combined knowledge, experience, and creativity of a stable workforce offers a creative and productive advantage over far-flung, fractionalized employees. When skilled contingent workers complete a project, their institutional knowledge and experience leaves with them. The use of consultants makes good sense--except when it does not. Third-party security issues are a big concern in industries concerned with compliance, and sometimes the cost of hiring talent for a position, rather than a gig, makes good budget sense.

For most companies considering contingent workers, Arun Srinivasan, senior vice president at SAP Fieldglass is on target when he states, "It affords companies access to pre-screened, pre-trained workers with niche skills, who can get to work quickly and stay on only for as long as they are needed. And, as a company's needs change, an external workforce can be scaled up or down quickly."

Tips for working with consultants

Part of the HR challenge in working with freelancers is modifying the recruiting and hiring process. Using social media, referrals, job boards, specialized associations, organizations, and outlets, you can broaden your reach when recruiting for a freelance position. Spend needed time to research the best online outlets for sourcing the type of consulting talent you need.

Just as with the regular recruiting process, your ATS offers significant efficiencies for parsing applications, and resumes. Engage potential consultants with the same care and consideration you would a future hire. Once you make a decision, keep these points in mind:

• Project definition: As with any position, define your needs up front. Retain the right consultant by clearly illustrating your needs, expectations, and the scope of your project. In many ways, cost-effective use of contingent workers can sharpen your planning process. In the alternative, hiring a freelancer without a project plan can extend project duration, and dampen cost efficiencies.

• Fees: Do not assume freelance staff of any kind works for less money than would be expected for the level of work and time spent. Like you, consultants have a job to do and expect a fair fee. Make payment expectations clear when you execute the statement of work and pay promptly as agreed.

• Onboarding: Just as with a regular hire, appropriate onboarding is important. Many companies move through the freelance recruiting process fairly quickly, and choose a consultant. Start dates are often missed due to lack of needed paperwork, drug testing, or assignment of a laptop or other interface equipment or software. Ensure your statement of work is carefully prepared and signed. Document and provide literature or training on company culture, expectations, and policies if the freelancer is working onsite.

• Management: Managing a freelancer may, or may not, be different than your full time employees. Feedback, especially at the outset of the project is important, but micromanaging can earn you a poor reputation in the talent community. If your consultant is working offsite, establish good communication routines at the outset of the project, set up needed telephone, video, or in-person conferences, and work with your consultant as you would a company peer.

• Closure: All good projects come to an end. If your working styles mesh, you may have a future collaborator when the need rises again for your company to hire a consultant. Because you have an established relationship and understand their capabilities, freelancers could also be good candidates as permanent hires down the line if the interest exists on both sides.

Contingent workers offer value and specialized skills. As workforce composition transforms with the gig economy, recruit for the level of skill your company needs. When you need the right tech solutions to support your search, talk to us at BrightMove.