A Freelance Economy: The New Normal

A Freelance Economy The New Normal

The shift in the American workforce to freelancing is a permanent change in the idea of what it means to build a workforce. This is the new normal.

We have seen a significant drop off in direct hire positions and an increase in professionals working on a consulting basis. According to a recent US Bureau of Labor Statistics study released last week – companies are hiring consultants five times more frequently than direct hires. Companies have reasons to hire but are still faced with uncertainty and volatility. As a result they are turning to the flexibility of consultants. Windows of opportunities that companies are trying to capitalize on open and close faster than ever before. An adaptive labor force allows forward thinking organizations to take advantage of these timely and unique opportunities without the risk of overextending themselves. What’s more, using professionals on a project basis gives companies a way to access the innovative insights of outsiders without making a long term commitment.

Like all seismic shifts to the status quo, this one is causing discomfort for organizational leaders who are still wary of ‘outsiders’. Even the most progressive decision makers are skeptical that consultants can ramp up quickly enough to do high level projects and complex problem solving.

These concerns, while valid, are becoming increasingly irrelevant and short sighted. Companies will need to develop new networks and systems that will allow them to quickly identify and vet professionals. The vetting will need to go way beyond matching skills and will need to include the intangibles of culture and fit that are hard for even the most seasoned and committed executives to articulate.

My challenge to industry leaders is to consider two things. First, for those not using consultants because of lack of trust, I would suggest they challenge the default response of “we don’t use consultants” and be open to the idea that the trends are changing and there are ways to differentiate and capitalize on opportunities that would have ordinarily passed you by. Secondly, for those that ‘do’ use consultants frequently for a certain level of task and role, I would challenge them to consider exploring their use for more challenging and higher level positions. Stay open to the idea of re-thinking how you look at your workforce and consider that a lower percentage of direct employees may create competitive advantages.

In order to do such a thing in the right way, there are three keys to building a culture that effectively and efficiently integrates consultants in key roles.

  • Voracious Vetting. In addition to testing the capability of doing the job, make sure you are also digging deeper into what you mean when you say you’re looking for a “team player” and other buzzwords. What is it about this group and what they value in people and who is going to be a good fit and best successful? Be willing to take a little more time considering what these words mean.
  • Commitment to Culture. Most of even the most intelligent executives have a hard time articulating what their company culture is and what it takes to be a good fit. They view it as the reality, the way it is – like a fish in water. As one client said “I just want someone who ‘clicks’ with us.” He knew what it looked like when someone didn’t “click” but couldn’t describe what made that happen. Being able to describe and protect the values, attitudes and traits that make up your unique organizational culture is key to finding the right consultants, especially those in high impact positions.
  • Feedback and Flexibility. Looking differently at your workforce and how you are going to most efficiently solve problems, get work done and innovate for the future is not a cookie cutter formula. This is a process not just an event. This takes commitment and a willingness to stay the course even when things don’t go your way. Mistakes will be made. You and your partners in the process of finding consultants to play important roles will learn and improve each time. This thoughtful approach can take a little more time up front but can quickly and consistently accelerate once the foundation is laid. In the words of Monte Roberts, the original horse whisperer, I call this “slow is fast.”

Project professionals can actually outperform internal hires for project work, as their mandate is solely to complete the project assigned, and they do not have other demands competing for attention. In that sense, project professionals are often more reliable than existing employees.

This accelerating trend and change in our thinking of the workforce presents both challenges and significant opportunities if done well. It is not for the faint of heart. Progressive, open minded leaders willing to take some risks to outperform their rivals in an exponentially increasing global marketplace will reap the rewards.

Here’s to the new normal.

By Peter Laughter, CEO at Wall Street Services
pjlaughter (at) wallstreetservices.com
212-509-7200