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We’re working in a gig world.
According to a LinkedIn study published in August, 70 percent of small businesses have hired a freelancer and 81 percent of those businesses planned to hire freelancers in the future.
Fifty-two percent of small business hiring managers said they would hire more freelancers in the next five years.
According to a 2017 study by Upwork and the Freelancers Union, which studied 6,000 U.S. freelancers, 57.3 million people freelanced in 2017, and the freelance workforce has grown three times faster than the overall U.S. workforce since 2014.
And businesses are reporting results with freelancers — in the same study, 83 percent of managers said freelancers “greatly help their business get the job done.” And according to another study released by Upwork, in 2018, small businesses are now 40 percent of the organizations hiring freelancers.
So who are these people?
For starters, they’re soon to be the majority. A study by Upwork estimates the majority of U.S. workers will be freelance by 2027.
Here’s how one local business has built a format for working with freelancers to get the job done.
Content marketing company Influence & Co. works with freelancers on an independent, contract basis, says managing editor Diane Kielhofner. She manages Influence & Co.’s team of freelance writers and designers who are based around the country.
Influence & Co. freelancers usually fall into one of two groups — either they’re self-employed and write 10 to 15 articles per week or they have full-time jobs and enjoy occasional projects. Good freelancers are flexible, want to deliver good work, and are eager for feedback, she says. A good fit will have a similar outlook on payment expectations and will understand your business model, who your clients are, and what they need.
Managers hire freelancers for many reasons, according to the LinkedIn study. Sixty-two percent of the managers surveyed said they lacked the needed experience on their team to complete a project, and 47 percent indicated the less expensive cost of hiring a freelancer as a reason.
The industries that indicated they were currently hiring freelancers were art and design (66 percent), education (67 percent), technology (64 percent), consumer goods (58 percent), and consulting (57 percent).
According to the study, the most in-demand skill for freelancers was website design, followed by accounting, web development, marketing, and graphic design. Forty-seven percent of working Millennials freelance, more than any other generation. On average, full-time freelancers are working 36 hours per week.
Freelancers are also more up to date with skills than a standard full-time employee. The Upwork study indicated 65 percent of fulltime freelancers update their skills as their jobs evolve; only 45 percent of full-time employees said the same.
Influence & Co. does have a recruitment and onboarding process for all freelancers, much like they do for full-time employees. Kielhofner suggests that each freelancer you’re interviewing should submit a formal application and resume. Ask them to include past experience in their field, the kind of projects they would want to work on, references, and previous examples of work.
Don’t be afraid to administer a test yourself, Kielhofner says. Influence & Co. will ask freelancers to write a test article based on an interview from past clients. The work is not published anywhere, but it’s a useful tool for internal evaluation.
“It’s good to have that test article there to make sure that it’s a good fit for both of us,” she says.
Once you make a hire and collect that first completed project, provide in-depth feedback on every project, Kielhofner says. Outline best practices and explain what was done well, what wasn’t, and why certain things were changed. Hopefully the freelancer will apply those practices to the next article and align it more closely with expectations.
Ninety-five percent of the time, freelancers are willing to collaborate and re-do work to get the project where an employer wants it to be, Kielhofner says. And that process can build trust.
“It’s really about open lines of communication and giving the freelance writers as much instruction and context and ingredients as they’ll need to essentially succeed in writing that article,” she says.
Assign projects well in advance, as scheduling can be a barrier to working with freelancers, many of whom have other projects in the works and may not be able to fit yours in.
“Freelancers aren’t just there to complete assignments at your beck and call,” Kielhofner says. The gig economy is a great innovation in the workforce, but freelancers depend on fulltime employees to advocate for them — your freelancers should be treated with as much dignity and respect as full-time employees.
“Just because you’re not seeing this person in the office everyday doesn’t mean they’re not delivering a huge value to your business,” Kielhofner says. And, even if a freelancer is well integrated into the company, there is still a barrier between them and the staff. Often, freelancers are based all over the country or the world, and it’s difficult for them to feel a connection to the company culture. They also might not grasp the nuances of your company’s processes and procedures.
Even though their freelancers are not often connected with the fulltime staff, Influence & Co. works to try to create a freelancer culture. Each year they give out freelancer superlatives, awarding writers things like “most creative” or “most consistent.” These don’t just make freelancers feel good; they can also add authority to their resumes. Surveying freelancers on occasion is also a good practice, Kielhofner says. Influence & Co. uses surveys to determine time spent on projects, how their processes compare with other companies the freelancers work for, and whether compensation models are in line.
Kielhofner suggests making sure your company creates a framework so freelancers view you as a reliable employer. Create a consistent payment structure that is outlined in a contract. Showing consistency with the little things, like paying freelancers on the same day every month, helps build the relationship.
A contract should also lay out how they can use work they’re doing in a resume or portfolio — especially if they’re creating content that will not bear their name. Line out how raises and bonuses will work, expectations for delivery of product, and so on. Influence & Co. pays its freelancers by assignment and will sometimes give bonuses in addition to the base fee for additional research or a quick turnaround. Writers typically have 48 hours to craft a standard article.
And, should you decide to let a freelancer go, handle it like any other firing, Kielhofner says: provide specific reasons why the relationship isn’t working out, whether it’s evidence of work not delivered on time or the freelancer ignoring instructions.
Across many industries, freelancers are becoming the backbone of business, so it’s important to set up the framework for utilizing them. “I don’t see a need for freelancer workers in the marketing world slowing down anytime soon,” Kielhofner says.
Want to utilize freelancers? Start by doing your research. Does the freelancer live elsewhere? In some states, they’ll need to register as an LLC before you can legally pay them, Kielhofner says.
“Freelancers” are independent contractors, from an accounting standpoint, says Jessica Lehmen,CPA at Williams Keepers LLC. Evaluate your business agreements with freelancers to make sure they’re not actually performing duties as an employee.
“Make sure that the relationship between the business and the freelancer is one of an independent contractor type relationship and not an employee relationship,” Lehmen says.
For example, if a contractor is working almost full-time hours for one company, they might not technically be a contractor if it’s limiting their ability to work for other companies. It’s a gray area, says Lehmen.
The IRS has a guide to help small businesses determine whether a worker is an employee or an independent contractor. It asks questions like whether the company controls how the worker does her work, whether expenses are reimbursed, who provides tools or supplies to do the work, and whether the worker receives any “employee-type benefits.”
Other questions to consider include “will the relationship continue and is the work performed a key aspect of the business?” There is not a set formula to determine if a worker is an employee or an independent contractor, and there is no one factor that is the final determiner. Instead, the guide says to look at the whole relationship.
“While there is a factor that’s based off of how much time or money is spent, it has more to do with control, usually, than it has to do with the amount,” Lehmen says.