The prospect of engaging independent talent can bring up a lot of questions, especially if this is new territory for your business. There are many common misconceptions about the independent workforce—a rapidly-growing, nearly 41-million strong talent pool.
One important distinction to note is that independents don’t just make up the on-demand economy—Uber and Lyft drivers, Task Rabbit-ers, and side-giggers. Rather, this segment of the independent population generally represents occasional workers who pursue these jobs on a part-time basis. On the other end of the spectrum are full-time independents: a highly-skilled workforce that has built businesses around their expertise.
As you navigate the waters of utilizing independent talent for your business needs, keep these 10 myths in mind.
The segment of the independent professional population that you will engage for projects or specialized work has a wide range of skills. Remember, these full-time independents have built a career out of being experts in their industry. These are workers whose talent is highly sought after, especially in competitive areas such as IT, marketing, biotechnology, and pharmaceuticals. In fact, one in five independents earns more than $100,000 annually from their work, and more than 41% have college degrees—compared to only 33% of the general population. If you have concerns about a contractor’s skill level, review their resume, portfolio, and past client reviews. Don’t be afraid to ask for references or review detailed questions upfront.
As the use of independent talent becomes more widespread, organizations today can engage these individuals with minimal risk. The key here is ensuring that you have a worker classification policy and guidelines in place as well as a written contract for all independent workers. In the news, you’ve probably heard about high-profile employee misclassification lawsuits. Partnering with an organization experienced in independent contractor engagement, such as MBO Partners, can help you put the right measures in place to minimize risk and ensure compliance.
In fact, numerous studies have pointed out the opposite: the project-based economy is here to stay. Independent talent provides organizations with a number of benefits including financial incentives, staffing flexibility, and access to specialized expertise. On the other side, many traditional employees are turning to independent work for the freedom it provides. We predict that by 2027, six in ten workers workforce will have spent time as an independent worker at some point in their lives.
While one of the benefits of using independent talent is having the flexibility to bring in workers when and where you need them, that doesn’t mean they are limited to short-term work only. Many independents work with clients on long-term projects that may span a year or more. The ability to establish long-term relationships with contractors who work well with your company is actually another benefit of utilizing this talent pool.
As competition for top talent increases, the price of employment will continue to rise. Engaging independents on an as-needed basis is often more cost-effective than hiring a full-time employee who may not be needed in the long run. Because independents are experts in their field, they can save businesses time and money on training, onboarding, and management. Independent contractors are also responsible for their own health insurance, taxes, and other employer-provided benefits. Because independents generally have a set bill rate, you’ll know what to expect cost-wise.
It is true that independent work is not for everyone—some only turn to it out of a need to supplement their income between traditional jobs. However, the percentage of these reluctant workers fell to just 24% of all independents in 2017, the lowest measurements in our study’s history. Among full-time independents, just 10% say they’d seek a full-time job. The vast majority plan to stick with independent work or even build a bigger business.
The market today is saturated with a wide variety of marketplaces where businesses can source independent talent. However, many of these marketplaces are geared towards freelancers looking for gig or part-time work. Instead, many companies are turning to direct sourcing: identifying candidates for a role using internal resources rather than a third party such as a staffing agency. Online direct sourcing solutions, such as MBO Connect®, are evolving to help organizations directly and compliantly source and retain independent talent. These networks allow you to invite, build, and manage your talent to help reduce supply chain costs, minimize onboarding time, and re-engage with talent you’ve worked with in the past.
A successful contractor-client relationship begins with communication. By starting with a clearly written RFP that states your goals, vision, and project requirements you’ll be able to attract the right talent form the start. Once you’ve found the right person to work with, work together to draft a contract that defines the scope, methodology, and project requirements. Starting out on the right foot in terms of communication will help to create a positive working relationship.
Running your own business as an independent isn’t easy; they have to worry about having an unpredictable income, planning for retirement, and are constantly on the lookout for the next project. At the same time, however, independents are incredibly motivated and love what they do. The ability to be their own boss, have greater work-life flexibility, and follow their true passion are all reasons they’ve chosen to dedicate their careers to helping clients solve problems.
Because the regulatory environment for independent contractor engagement is complex, many organizations don’t know where to start when it comes to creating an engagement process that isn’t geared towards traditional employees. Often, it is helpful to work with an organization that has experience in this area. Companies like MBO can help you develop an independent workforce program tailored to your specific business needs to quickly and efficiently find, engage, and manage independent talent.
What to learn more about contingent workforce solutions? We’re here to help answer your questions!