Unlocking the freelance economy’s potential: 5 strategies for employer success in the talent marketplace

5 things employers must get right to win in the freelance economy

The talent marketplace is, perhaps, the only market in the world where one seller sells to another seller. 

On one side, organizations sell opportunities to work, and on the other side, prospective employees sell their skills and capabilities to create economic value. There is essentially no ‘Buyer’ in the war for talent. And this seller-to-seller complexity is accentuated multifold with the acceleration of the ‘gig economy’ where talent, opportunities, and work arrangements have achieved unprecedented agility.

Fortunately, or unfortunately, this is going to be the norm for the next battle in the war for talent. Stakeholders in the talent marketplace, i.e. full-time employees, part-time employees, freelancers/ independent consultants, enterprises, hiring managers, talent acquisition professionals, platforms, marketplaces, all will need to reskill, realign and reinvent themselves. Such complexity of the talent market never existed in the past.

As organizations are recalibrating their policies and processes to tap into the huge potential of the Freelance marketplace, there is a need to also derive what I call a ‘Winning Freelancer Value Proposition’ aka FVP.

FVP is critical because, in the freelance marketplace, the employer of choice will be the organizations that enjoy preferred status in the eyes of the freelancers/ independent consultants which simply means that the identified freelancers / independent consultant will prefer taking the opportunities of the preferred organizations over other employers, thereby giving the much-required talent advantage to the organization.

Introducing the Freelancer Value Proposition

From an organization’s perspective, the Freelancer Value Proposition, much like EVP, is the overall proposition that attracts a Freelancer/ Independent Consultant to choose opportunities at the stated organization over others. Affiliation, image, benefits, compensation, continuity, and many more factors go into the creation of a compelling FVP giving a strategic advantage to the employer in the Freelancer marketplace. Compensation, as has been well established by now, is NOT the key driver for the Freelancer/ Independent Consultant. Inundated by unlimited opportunities, Freelancers/ Independent Consultants need to be engaged and retained using newer approaches and mindsets.

5 imperatives of creating a strong FVP

  1. Move from one-off to consistent engagement: While Freelancers may be engaged for a variety of projects; organizations must identify areas where they can create consistent opportunities. These may be 2-4 areas where concerted efforts can be put to become an employer of choice. This should be an important consideration in the organization’s talent strategy and where it should engage the best Freelance talent regularly.
  2. Provide a conducive work ecosystem: Though the concept of the workplace is redundant in the Freelancer Economy, employers should not underestimate the role the ecosystem plays in Freelancer’s success and more importantly their engagement preferences. Organizations, therefore, must invest in a work ecosystem that must include digital work applications, information sharing systems, tools, and skill enablers, among others. It will be suicidal to expect Freelancers/ Independent Consultants to deliver using only their resources.  
  3. Fair compensation: While engaging Freelancers is a means to optimize and variabilize talent cost (in addition to access sought-after specialist skills), it is important to compensate the freelancer talent fairly. The price that the Freelancer/ Independent Consultant quotes is often based on their workloads and not necessarily reflective of the value that they can bring. Consequently, a high-quality/ highly experienced Freelancer professional may quote a low price due to the lesser demand s/he can generate. Organizations must resist the temptation to exploit such trends. Organizations must conduct internal and external benchmarking to arrive at a fair price for the freelancer talents efforts.
  4. Long-term loyalty: Ever noticed how loyalty points drive your decision while booking a hotel room or a flight ticket. Having long-term retention hooks will be a key for attracting freelancer talent. It is the right time for organizations to start thinking about longer-term retention strategies that may manifest in financial rewards linked to the longevity and the quantum of work delivered by a freelancer. Every small entrepreneur misses the comfort of social security and the benefits that come with a permanent job. In current times, social security, and benefits, if extended to the freelancer community can be a potent tool of invoking long-term loyalty. This anchor will also augment the points above to create long-term, preferred engagement. 
  5. Extending the work culture: Engagement, performance, and retention are all known to be strongly impacted by the work culture. Organizations must find a way to create communities for freelancers/ independent consultant that can live the culture of the organization. This imperative is perhaps the most difficult to build. But then again, when has culture creation been easy? Organizations wanting to export their cultures to the freelance communities must start with enabling the strongest character of their work culture for their freelancer workforce. Technology certainly can play a game-changing role in enabling is, among others.  

The freelance economy is here to stay. As the workplaces wait to reopen, the reality is that when they open, the freelancer workforce would have emerged as a formidable competitor and organizations will have to have look at this option as a mainstream second. Long-term perspective and having a win-win mindset will be the two fundamental pillars on which the organizations will make this transition.