Here Are The Three Strategic Questions To Be Asking When Using Outsourced Talent
Open talent is a phenomenal solution to the skills gap crisis—and to moving businesses forward in an era of rapid digital transformation. But to tap into this growing segment of the workforce means considering new worker-company relationships from all sides. This is on the minds of business leaders in the Open Assembly Collective, but it’s something that all businesses will need to consider at some point, given the growth in hiring freelance talent.
More contract workers means employers are no longer paying for the costs of regular paychecks, benefits, and automatic withholding for taxes and retirement. This is a significant shift in worker and company relationship. While on-demand platforms navigate the regulatory and legal challenges regarding worker classification and rights (California’s controversial Assembly Bill 5 [AB-5] took effect January 1st, 2020), they need to consider the facts and make strategic decisions based on information to stay ahead of the learning curve.
1. How will your culture change?
According to the Mercer’s 2020 Global Talent Trend Report, at least 79% of executives predict that contract and freelance workers will replace full-time employees in the future. But a vast majority of organizations haven’t considered these issues in depth and still struggle to achieve harmony and a cohesive cultural identity within their current models.
This is concerning. As the independent workforce and open talent models grow and mature, businesses will need to rethink rewards and engagement tactics to include freelance or contract and full-time workers, recognizing that all worker types are driven by similar motivations to find meaning, learn, advance, and be rewarded for their work.
2. What is the contract worker experience?
Engagement studies must include freelancers or contract workers for accurate data. In a time when the employee-employer relationship bond is weakening overall, measuring employee engagement is critical. Unfortunately, companies are spending valuable time and resources to measure traditional employees only, a shrinking percent of their workforce, leaving out freelance or contract workers.
This is a missed opportunity. As the open talent workforce grows, companies would be wise to track their engagement, too, to ensure they are building a robust and resilient workforce.
3. What about benefits?
Although a sweeping majority of businesses plan to hire more freelance talent in the near future, most have not considered benefits. Businesses need to consider and embrace how to reward independent freelance or contract workers as well as full-time employees and what these rewards look like from a practical and financial standpoint.
Benefit models inadequately reflect new employee-employer structures. Benefits and rewards structures are still set up for a workforce comprised of traditional employees. However, healthcare and other insurance, paid vacation and leave, and access to retirement savings plans, are seemingly not attractive or strong enough to deter a growing number of workers from choosing alternative, freelance or contract work arrangements.
Although not all freelance or contract workers choose alternative arrangement by choice, analysis suggests that a significant number are—and that they are happier in that choice than traditional employees. On the surface this may seem like good news—companies might see significant reduction in benefits costs. This is shortsighted. Companies will still need strategies to keep their workforce engaged and happy, to cultivate the strong relationships that give them access to the right talent at the right time.
