How to overcome the challenges of managing a freelance workforce


A guide to overcoming the challenges of managing a freelance workforce

Freelancers are not employees. They are not bound, or managed, by the same rules and it is common for hiring managers, line managers and operational teams to experience challenges as they start to engage a larger number of freelancers.

In this guide:

How to overcome the challenges of managing a freelance workforce

Lack of visibility

The issue of visibility arises as soon as an organisation engages with more than about 20 freelancers.

As the number of freelancers increases, it becomes difficult to maintain visibility over every freelancer: Where are they engaged? What skills do they have that are being used? What skills do they have that could be used? How is the quality of their work? What do line managers and team members say about their work?

A lack of visibility can lead to other related issues:

Apparent skills shortages

Without visibility of where and how freelancers are engaged in an organisation, it is possible for 'phantom' skills shortages to appear. For example, one department can have a number of freelance software developers engaged but underutilised, whilst another department could be struggling to find and hire freelancers with the same skills.

Unnecessary hiring

Frequently unnecessary hiring is a by-product of the apparent skills shortages caused by a lack of visibility. It's easy to see how an organisation, in it's desire to move projects along, can hire freelancers unnecessarily when they could have unseen, underutilised freelancers already engaged elsewhere.

Uncontrolled freelancer costs

Where there is a lack of visibility, no single point of 'truth', it's common for an organisation to be engaged with a number of very similar freelancers, doing very similar jobs, but paying very different rates. Of course, this creates cost inefficiencies (compounded by the unnecessary hiring and underutilisation factors).

The solution to visibility challenges

The solution to every visibility challenge is to create a central, consolidated, view of the freelancers engaged by an organisation. At a very minimum, the view should detail:

With all this information and these reporting dimensions available in a central system, available to all, hiring managers can make much better resourcing decisions.


Onboarding issues

Whereas visibility challenges require a number of freelancers to be engaged by an organisation, onboarding issues can present themselves from the very first freelancer.

Onboarding issues typically originate from how easy it is to hire a freelancer. Freelance marketplaces enable any line manager with a credit card to hire a freelancer. The ease of hiring creates unchecked and mismanaged hiring processes, often bypassing existing HR and established onboarding processes.

Common onboarding issues include:

No contracts

It's possible to engage a freelancer with as little as a verbal brief. Of course, without a formal contract or statement of work, this exposes the organisation to a risk of incorrect or incomplete work being delivered.

IP

Without a structured or controlled onboarding, it is possible for a freelancer to assume they own the intellectual property of the work they deliver. This creates a risk for an organisation hiring freelancers to work on brand and mission critical projects.

Security

Unless there is a system in place to remove the freelancer from accessing sensitive business information when their contract finishes, freelancers with access to internal systems or those who are included on internal email distribution lists pose a data/information security risk.

Regulatory

An example of regulatory risk is the IR35 legislation in the UK. If a freelancer is deemed to be a 'disguised employee', both the freelancer and the organisation could be liable for financial penalties. Without the right checks being made, it is possible for a line manager to unknowingly create an IR35 risk by hiring a freelancer for a role that looks like employment.

The solution to onboarding challenges

Overcoming onboarding challenges has two steps:

  1. Consolidate all freelancers, engagements and reporting in one central system
  2. Include a mandatory, automated onboarding process, which prevents a freelancer from starting work before they have completed necessary onboarding steps. E.g., signing a contract, an NDA and passing a security check.

Day to day management

Once your freelancers are onboarded and visible, another set of challenges emerge around the day-to-day management of their work.

Hours of operation

The first challenge is operating hours. A freelancer is not an employee and therefore they are entitled to keep their own hours. Of course, where the freelancer is working alone on a project this may be fine. However, as soon as the freelancer needs to integrate into an existing team of employees, it is normally better for the whole team to keep similar hours.

Hours of operation: Solution

There are two ways to overcome the challenge of different operating hours:

  1. Include a service level agreement in your freelancer's contract, which ensures a standard response time during your office hours.
  2. Offer your employees flexible hours.

Each option has its pros and cons. Deciding the right option for your organisation comes down to answering a few key questions:

Collaboration

In addition to keeping similar hours, effective collaboration is another challenge to consider. Your internal teams will have access to communication, workspaces and software to enable them to collaborate effectively.

Collaboration: Solution

For the majority of freelance engagements, the messaging and file-sharing functions of an FMS platform will provide a simple solution.

Where a deeper level of integration into projects is required, for example with software development, where fully-fledged project management and version control software is required, the solution to enable a freelancer to collaborate with your internal team is to grant them access to the same project management and version control software. There are, however, two considerations when going to this level of collaboration:

Change in project scope

In today's fast-moving, agile business world, a project's scope is extremely likely to change. Retasking employees is straightforward as their employment contracts allow for it. But where a freelancer is engaged to deliver against a statement of work, a change in project scope could prove problematic.

Change in project scope: solution

The solution is to use an FMS that enables quick, simple project posting and rehiring. When your project scope changes, you can simply end one project and rehire the freelance to deliver against a new statement of work with minimal admin.


Availability

Employees are a reliable resource of output. Their employment contracts guarantee a mutuality of obligation. Freelancers, on the other hand, are free to move on as soon as their contract is over. There is no obligation for the organisation to provide more work, and there is no obligation for the freelancer to accept more work.

For an organisation using freelancers to deliver parts of a larger, ongoing project, it can create a problem if a crucial freelancer decides to move onto something new.

Availability: Solution

The immediate answer that jumps to mind is to offer the freelancer a longer, ongoing contract. This might be sensible but it does start to cross into IR35 territory so shouldn't be the default solution for every organisation.

Another solution for the availability challenge is to use Talent Pools.

Talent Pools enable a hiring manager to create a bench of vetted, pre-qualified freelancers for a particular skill or project. You are then not dependent on one particular freelancer and instead have a number of viable options to resource the next part of your project.


The overall solution is choosing the right Freelancer Management System

In summary, the majority of the challenges of working with a freelance workforce can be solved by using the right Freelancer Management System (FMS).

Visibility

An FMS provides a central, searchable directory of freelancers with rich profiles.

Onboarding

An FMS provides configurable, automated freelancer onboarding.

Day to day management

An FMS provides flexible project hiring, communication and file-sharing facilities.

Availability

An FMS provides Talent Pool functionality.

To learn more about how an FMS works, take our product tour.


Other Resources

How to prepare for changes in freelancer employment rights

Learn how proposed changes to freelancer employment rights could affect your business.

Working with Freelancers: How to prepare yourself for GDPR

GDPR will significantly impact how your organisation manages its freelancers. Learn how to get yourself prepared with this guide.

Watch our introduction video

Learn how TalonFMS can help you make better resourcing decisions and maximise the potential of your freelance workforce.