How Businesses Can Leverage the Gig Economy
The gig economy is growing and by 2020, one in five workers will be freelance or on contract — this according to the EY Global Contingent Workforce Study. A fancy new name for freelancing in the digital era, the gig economy refers to the growing workforce of freelancers working ‘gigs’ — tasks performed as once-off jobs.
The acceleration of the gig economy has primed the market for opportunities — for both freelancers and businesses. So how do you leverage this trend for your company?
Embrace the blended workforce
While Africa’s digital maturity is not on par globally, the gig economy is gaining momentum thanks to technology, collaboration tools, video conferencing and virtual offices, creating much-needed opportunities and new revenue streams.
For businesses, the main benefit is the ability to source talent instantly from anywhere in the world at competitive rates. Additionally, hiring freelancers on-demand on a project-by-project basis means you do not need to fork out on pension plans and medical aids.
Permanent employees are working side by side with freelancers in coworking spaces, whether online or in person. However, with a blended workforce comes the challenge of project managing teams working from different locations.
Work better, smarter and faster
By including freelancers in your workflow management system, you can actively improve collaboration between your contractors and your core company team, resulting in better understanding between the relevant parties, improved workflow and increased profitability.
It does not matter whether you are using Asana, Meistertask or Trello, just make sure you have visibility across your teams to get a bird’s-eye view of who is doing what, who has capacity on which day and to whom you can allocate work according to their skillsets.
Hire the right fit
While you have access to a fast-growing, highly-skilled economy of freelancers, it takes
a particular kind of person to be successful — hardworking, organised, experienced, intelligent and highly-skilled are some of the attributes to look out for when hiring freelancers.
A freelancer’s hourly or daily rate will be higher than you would pay your permanent employees. However, there’s usually no need to provide any employee benefits, healthcare, insurance or perks to your contingent staff. In most cases, you will not even need to supply a desk, chair or computer. This saves you money.
Freelancers can do anything employees can do, but it makes financial sense to only hire freelancers for specific types of work:
● Once-off projects: hiring a new employee for a single project makes no sense if you know you cannot keep them on after completion. Paying a freelancer to do the work is much more practical.
● Highly-skilled, short-term work: training staff members in new skills can be expensive, which is why it makes sense to bring in the skills you need as and when you need them.
● Creative work: freelancers typically rule creative industries such as the media, design, writing, production and audiovisual because there are defined briefs, clear specifications and measurable end-products.
● Commission-based work: freelancers are accustomed to being paid for the work they produce and have the skills required to meet goals efficiently.
Hiring freelancers is like installing a revolving door — there’s a higher rate of personnel turnover compared to that of permanent employees, but the trade-off is you gain access to a flexible and innovative group of workers who are highly-skilled and cost-effective.
Here are some of the ways your business can save money by hiring freelancers:
● Real estate and equipment: with most freelancers working remotely, you don’t need to supply physical office space or equipment such as computers, telephones, desks, and chairs.
● Training for specialised skills: instead of spending money on training, hire a freelancer who already has the skills that you need and knows how to do the job well, shaving thousands off your budget and delivering higher-quality work.
● Save on benefits: most freelancers charge more per hour than full-time employees, but you’ll still save a significant amount as you are not required to contribute towards their medical aid or pension funds.
● You only pay freelancers for the work they deliver: your full-time employees get paid even when they don’t have a lot of work to do, which means that your business spends a lot of money on compensation even when you don’t have much revenue coming in. When you hire freelancers, you pay them only for the work they do.
Keep the bigger picture in mind
According to PayPal’s new Global Freelancer Insights Report, the most significant challenge for freelancers in South Africa is irregular income. On the plus side, gig-economy work can improve work-life balance, often blurring the lines between personal and professional life. Freelancers can pick up kids from school and then switch back to their roles with little interruption. However, while the gig economy is creating new opportunities and unleashing innovation, it is also raising thorny questions about workplace protections and what a good job will look like in the future.
Although the broader socioeconomic effects of the gig economy are as yet unclear, businesses that embrace the agility of the gig economy have the opportunity to redefine the workplaces of the future