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

5 things employers must do to build a Freelancer Value Proposition to attract top independent talent

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 economy, the employer of choice will be the organisations that enjoy preferred status in the eyes of flexible talent which simply means that they will prefer taking the opportunities of the preferred organisations over other employers, thereby giving the much-required talent advantage to the organisation.

Introducing the Freelancer Value Proposition

From an organization’s perspective, the Freelancer Value Proposition, much like EVP, is the overall proposition that attracts on-demand talent to choose opportunities at the stated organisation 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 freelance economy. Compensation is NOT the key driver for on-demand talent. Inundated by unlimited opportunities, talent needs 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: Freelancers can be hired for numerous projects, but it’s essential for organisations to pinpoint specific areas where they can offer steady opportunities. There might be 2-4 key domains where dedicated initiatives can make the organisation a top choice for freelancers. Incorporating this focus into the company’s talent strategy is crucial, ensuring they consistently attract and work with the finest freelance professionals
  2. Provide a conducive work ecosystem: While a freelance hire might not be a permanent fixture in your organisation, employers shouldn’t overlook the significance of the ecosystem in influencing a freelancer’s success and, crucially, their engagement preferences. Organisations, 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 consultants to deliver using only their resources
  3. Fair compensation: Engaging freelancers can help companies optimise and vary talent costs while also accessing specialised skills. However, it’s crucial to offer fair compensation to these freelance professionals. The rates provided by on-demand talent often relate to their current work demands and may not truly represent the value they deliver. As a result, a highly skilled freelancer might offer a lower rate due to reduced demand. Organisations should avoid taking advantage of such situations. It’s vital for companies to undertake both internal and external benchmarking to determine a just compensation for the freelancer’s contributions
  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 flexible talent. It is the right time for organisations 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: Work culture significantly influences engagement, performance, and retention. Organisations should strive to foster communities for on-demand talent that embody the company’s culture. While establishing such a culture can be challenging, building an authentic organisational ethos has never been simple. If organisations wish to extend their culture to the freelance realm, they should emphasise the most defining aspects of their work environment for these freelancers. Technology, among other tools, can be pivotal in making this happen

The freelance economy is firmly established. Even as workplaces have reopened, the freelance workforce has positioned itself as a major contender. Organisations now need to view this alternative more than ever as a primary option. Adopting a long-term vision and a mutual benefit approach will be the foundational pillars for organisations navigating this landscape.