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:
- Lack of visibility
- Onboarding issues
- Day to day management
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.
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:
- Freelancer's skill
- Freelancer's previous projects, with hiring manager review/rating
- Freelancer's current project(s), if applicable
- Freelancer's availability
- Freelancer's rate
- Freelancer's invoice history, with cost attributed to project, hiring manager and department
- A method of contacting the freelancer
With all this information and these reporting dimensions available in a central system, available to all, hiring managers can make much better resourcing decisions.
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:
- Include a service level agreement in your freelancer's contract, which ensures a standard response time during your office hours.
- 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:
- What percentage of your workforce are freelancers? If your organisation is largely dependent on a freelance workforce. You may decide to include a standard SLA in your freelancers' contracts.
- How easily can you find freelance talent? If you hire freelancers for very hard to find skills, you may not wish to impose SLAs in case it turns talented freelancers away.
- What implications does offering your employees flexible hours have? If your employees maintain core hours for an important business reason (e.g., customer service hours), you may not wish to introduce flexible working.
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.
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:
- Licenses. You will need to consider software licenses.
- Access control: You many only want your freelancer to access certain areas or systems. You also need to have a system in place that removes their access rights once their contract finishes.
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.
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.
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).
An FMS provides a central, searchable directory of freelancers with rich profiles.
An FMS provides configurable, automated freelancer onboarding.
Day to day management
An FMS provides flexible project hiring, communication and file-sharing facilities.
An FMS provides Talent Pool functionality.