Enterprises and large organisations all over the world face the same challenge. How to continue to satisfy their customers' requirements, produce great products and services, grow and maintain their margins - all at the same time?
In this guide:
"I need you to create me a [insert some new, trendy, weird, yet wonderful thing here]" are requests enterprise organisations are receiving from their stakeholders with increasing regularity. Fuelled by the speed of innovation in technology, businesses are constantly looking to new and exciting ways to market their products and services.
Every new 'thing', whatever it may be, poses an interesting challenge for any organisation. Get it right and everyone's happy. Get it wrong and it exposes a gap for a competitor to take advantage from.
This make or break gap created by the 'thing' is usually a result of resourcing. Does the organisation have anyone on staff they can use to create/design/code/build it?
Organisations have traditionally had two choices:
An ambitious organisation would hire a new member of staff with the skills needed. The result usually sees the incumbent team face internal pressures to demonstrate utilisation or justify another hire. There is also the 'productivity gap' to manage and pay for.
In order to remain agile, flexible and responsive, the second option an organisation has is to pay a premium to outsource the project or requirement to an external supplier. For example, meeting the majority of marketing challenges, means hiring a marketing agency. Of course, this puts pressure on already stretched budgets.
Organisations are making these choices everyday, but they are risky. Hire and risk being slow. Outsource and risk increased costs.
What if it didn't need to be that way? What if an organisation could be ambitious without having to take a such a large gamble.
A new elastic resourcing method that adapts, expands and contracts according to demand is growing in popularity and it could be the solution.
The model has 3 key components:
There a number of benefits to using the elastic resourcing model:
The use of 'on-demand' talent means that 100% of the team is utilised, elimating the cost of underloaded employees.
Hiring a full-time member of staff can take a long time, with senior hires often having 3 months notice to serve. The benefit of using on-demand freelancers is there is relatively no time lag between receiving a brief and work starting.
The freelance marketplace also opens up access to the freelance community. Being able to access a large number of professionals who freelance as a second job, or who are on maternity/paternity leave means it can be easier to reach hard to find talent.
Organisations have used in-house staff for decades, why change that?
Firstly, our culture and attitude to work is changing, powered by technology. By 2020, the majority of the workforce in most developed markets will be freelancing. To continue to attract the best people, organisation will need to change how they resource projects.
There are also two good reasons why an organisation would embrace the elastic model right now.
An organisation that limits itself to hiring people in a commutable distance from their physical location severely restricts their access to talented people. The world is a big place, with an ambundance of talent who live more than a 90 minute commute from your offices.
Advances in cloud computing, file-sharing and video-conferencing have completely negated the need for a person to be in the same room as you to collaborate effectively.
And by using a freelancer management system that enables seamless vetting and onboarding, you remove some of the factors that might affect quality.
This is probably the most common reason for using freelancers - the chance to reduce operating expense.
Whilst it's normally true a freelancer's day rate will be more than a traditional PAYE employees, an arbitrary comparison of day rates doesn't reflect true cost.
Let's look at an example of a mid-weight designer:
Day rate: £350
Equipment cost: £0
NI contributions: £0
Downtime cost: £0
Equipment cost: £2,000
NI contributions: £4,000
Downtime cost: £8,000 (80% utilisation)
The freelancer offers the benefit of 100% utilisation, controllable costs and no hidden overheads such as equipment costs, holiday pay or sick leave. The PAYE employee may be cheaper day to day, but in this example, the permanent hire will cost £46,000 whether they are working on a project or not.
Getting started with a freelancer management system is a four step process:
The audit should help you to understand your pain points. Build up a picture of how and where your organisation is using freelancers. What roles are they fulfilling? How much are they costing? How are they engaged? What problems are you seeing?
Selecting a suitable FMS partner is only the first step. In addition, you should empower and incentivise internal teams and stakeholders to make a change.
With the right FMS technology and an empowered team, you should create a small, managed scenario to deploy an FMS. If you are a global organisation, this could be a particular country, market or region.
The pilot process will create both new challenges and learnings. What went better than planned? Did anything not go as predicted? What feedback did you encounter?
As you plan for a staged roll-out, incorporate as much of your pilot experience and feedback as possible.
Providing workforce insight for large organisations.
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.
This guide looks at what the gig economy is, explores some of the benefits (and the negatives), looks at how it can fit into a wider talent strategy and what part it plays in the future of work.