The benefits of working with freelancers to manage the talent shortage

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The talent shortage remains a significant problem. The issue has been growing exponentially, although identifying one single cause of the talent drought remains a challenge. It does not present itself equally in all markets and every geography, and therefore, requires nuanced analysis and strategy. However, across markets, one actor stands out as a key solution: the freelancer. Here, will cover hiring and working with freelancers effectively, what impact employing more freelancers can have on HR policies, and how businesses can adapt to these changes.

A recent webinar I took part in with Outvise, alongside Olivia Blanchard (Digital Future Society), Nacho Rodriguez (Repeople) and one of the founders of Outvise, Alex Collart, highlighted the key issues around the talent shortage. The webinar prompted a lively discussion around whether the problem is new or not and also how it has changed over the decades. 

We also discussed the ways companies can manage the talent shortage and how freelancers can fill the gaps. Importantly, we also covered issues around how for some, the increase in remote work has exacerbated and morphed gender and location based inequalities. For the full run down, watch the webinar. Alternatively, read on for the essential briefing.

How serious is the talent shortage? 

Within the knowledge sector, people have been talking about the talent shortage since 1990. It is my belief that although the conversation about talent shortages is not new – in reality it’s at least three decades old – the conditions around it, especially since the pandemic have changed significantly. One of the ways it has changed is that it has become more visible and is more widespread, impacting businesses globally. This is a direct result of the more globalised nature of work and how talent markets now operate in every region of the world as one. 

Any discussion around the talent shortage must also take into account how it varies across sectors and regions around the world. When we’re talking about workers, who are we referring to? Whose work is it? It is one thing to talk about male workers and another to talk about women in the labour market. The rise of the digital marketplace and working with freelancers has entailed a sea change in how different genders make up the workforce, particularly since the pandemic. 

Another important factor in the talent shortage is how the markets of different countries have now become homogenised as one. For example, a Spanish language translator based in Spain is in a pricing competition with similar workers from Latin America, who do not have the same cost of living requirements and can charge less. This geo-arbitrage could be a downside to the interconnected, globalised talent market for people that are not able to take advantage. However, for those that can benefit from these movements in the talent marketplace, there is a lot of money to be made and new experiences to be had.

Another issue behind the talent shortage is how many economies are tied down to traditional ways of working, with a failure to embrace the power and potential of freelance work. In my country, Spain, there are no business schools that teach students that working with freelancers or as a freelancer is a boon to progress. Students being prepared for management positions are not taught how to incorporate freelancers into their team, nor how to lead distributed teams. The movements we see in Spain towards returning to the office are in a large part a result of the presenteeism that pervades our working culture. Therefore, tackling the talent gap requires a rethinking of working practices and teaching managers how to embrace remote work and freelancers. 

In addition, it’s worth noting initiatives that actively promote freelancing in Europe. For instance, Talent R-Evolution Spain organises an annual Summit where freelancing platforms convene to discuss the state of independent talent at the national level. Furthermore, there are legislative efforts like Free Trade Europa’s petition, which aims to protect and support freelancing across member states. 

How do you manage freelance employees?

With the awareness that there are barriers to the full implementation of freelance work culture in Spain, there are areas we can look to for inspiration. Nacho,one of our webinar guests, connects freelancers with coworking spaces in the Canary Islands. There, he is fomenting a community of like-minded individuals. Coliving spaces like these have the double benefit of promoting the positive side of freelance culture, which is the opportunity to work from wherever you find most comfortable, including luxurious spaces by the beach. 

If the benefit of this style of work is to be able to connect to anywhere, from anywhere, then a decent support infrastructure is needed to facilitate the lifestyle. Talent platforms such as Outvise have risen from the intersection of technological change, the growth of AI, data, mobile, Internet economy and changes in the labour market. These changes, such as the outsourcing of work to external parties, part-time work, and self-contracting work, have provided ideal conditions for platforms like these to grow. 

Freelance talent acquisition is a benefit for companies because they can source talent from outside of their geographical location. This can help reach a labour force outside of a company’s city or country. However, when doing so, establishing some practices to ensure success are vital:

1. Establish communication norms and practices. Ensure there is a firm timeline in place to initiate a good relationship from the get-go, which guarantees deliverables when you need them. This should include project expectations and objectives. Talent platforms like Outvise can help with these initial communications and creating contracts.

2. Create regular meetings for check-ins and feedback sessions. Opportunities to touch base should be high on the list of priorities with freelance employees. The nature of the work means that there’s a high chance many will be in different locations, working away from the office in different cities or countries. Therefore, keeping regular contact helps managers stay in touch with the progress of the project and maintain important social interaction.

3. Respect the freelancer’s independence. Freelancers are not traditional employees and are usually not subject to the same hierarchies that exist within organisations. Avoid micromanaging and trust them to deliver their work within agreed timeframes but without expecting them to be connected at the same time as you.

4. Support iterative work. Regular feedback sessions can be backed up by encouraging freelancers to work in sprints. Adopting Scrum methodology allows regular sprint sessions to be collaborative in nature. In spite of the physical distance between freelancers and the rest of the team, this can encourage teamwork. 

How do you manage a freelance team?

Managing a team of freelancers requires similar skills, but scaled up. Working with freelancers as a team can actually be preferable than just one freelancer surrounded by traditional employees. For one, this creates greater equity between workers as everybody involved in the project has a similar relationship. Another benefit for businesses is increased flexibility and the opportunity to take advantage of a wide talent pool. 

As Nacho eloquently spoke about during the webinar, before the pandemic freelancers were mostly solo-preneurs or working with and for very small teams. There was also a majority of males identifying as freelance. Nowadays, the practice has become more normalised and subsequently has seen an exponential growth of a community with greater diversity. We have seen an increase of digital nomads, who are largely made up of young people with less attachment to one single place. Meanwhile, we’ve seen a growth in freelancers coming from more stable backgrounds, often with families and other domestic responsibilities. 

Therefore, working with freelancers in a team nowadays can mean a similarly minded group of individuals is formed. However, it can also mean that the freelancers in a traditional team feel separate from contracted employees. This issue is particularly acute among people who work from home, like mothers who are responsible for domestic duties. Those who cannot attend work in person often miss out on the important conversations that happen around meetings, the water cooler conversations that often start as social events but end in increased opportunities. 

Not all freelancers work remotely, but the majority do. So much so that the idea of a freelancer now often automatically alludes to the work from home lifestyle. These stereotypes often exacerbate harmful gender gaps that already exist and are a hangover from pre-pandemic life. As my co-panelist Olivia Blanchard put it, there has been a greater trend towards mothers being self-employed because it gives them the flexibility to work around care duties. While this can be empowering for women and give them greater earning potential (particularly in developing economies), it has the danger of perpetuating the idea that women must have two jobs, the paid work and the unpaid domestic work. Coupled with the risk of invisibility while working from home and the missed social opportunities, it could exacerbate the gender gap.

However, this does not by any means imply that freelance and remote work should be avoided. It just means that the onus is on managers to find ways to ensure that these negative possibilities are avoided by fomenting a culture of collaboration, conversation and sharing outside of the formal meeting structure. Working with freelancers in a team means that they should be able to feel part of the process in whatever way possible. This can be achieved by providing in-person meetings, being part of in-company Slack channels, and keeping video meetings open for informal discussions and collaborative working. 

Working with freelancers in teams doesn’t just benefit them, either. Freelancers have a different set of soft skills that traditional employees often don’t have. For instance, they can teach others how to manage time properly and maximise productivity within timeframes. They can also teach other workers in teams about adaptability, problem solving and reacting to adverse situations. Furthermore, freelancers are often excellent communicators that have a wide range of experience in emailing, meetings and active listening with clients and collaborators from all over the world. 

How do corporations need to adapt?

While talent platforms and the talent themselves are driving changes in hiring culture, corporations have been known to be left behind. However, to adapt to an uncertain economic climate, 78% of business managers have said they will continue working with freelancers to fill talent gaps. Corporations that are not embracing working with freelancers are leaving themselves open to the instabilities of the market after having made significant investments in their labour force. 

Traditional corporations are often heavy, slow-moving beasts. A new regulatory framework has been necessary in Spain to oversee how companies are treating freelance employees and ensuring they are subject to the same rights as traditional employees. Of course, it has the extra benefit of improving freelancer’s tax liabilities and increasing revenue for the government. By comparison, the UK’s IR35 law has existed for a number of years and aims to catch out those freelancers that are avoiding paying tax. Its existence, and other laws like it around the EU and the world offer a reminder of how other countries have some catching up to do. 

If the talent shortage is here to stay, find ways to mitigate it

There are arguments that say that the increase in freelance and remote working, especially since the pandemic, has made matters worse. Corporate attitudes, slow takeup of truly integrated freelance workers, and the increasing divisions of gender and class that some workers are experiencing have begun to tarnish the image. 

However, working with freelancers in a way that benefits the individual, the company and the economy at large is possible. It involves accepting that freelancers are here to stay but that they need to be a part of the conversation, that working with them brings a wealth of benefits through varied work experience, increased soft skills and time management practice. 
Plus, the economic benefits for companies of working with freelancers during difficult times are countless. I invite you to watch the webinar for yourself for the valuable insights left by my colleagues and have a look at the talent available on the Outvise platform.