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Guide to hiring independent talent (part 1): Identify the need of freelancer vs permanent employee

By Johann van Niekerk

In the evolving landscape of modern business, the sharp boundaries between traditional permanent employment and freelancing have blurred, posing a critical question: How can companies harness the power of independent talent to stay agile and competitive?

Guide to hiring independent talent (part 1): Identify the need of freelancer vs permanent employee

The pandemic meant significant changes for business. While it presented some unique challenges, the most significant transformation has occurred in terms of workforce dynamics. Due to a change in the behaviour of skilled talent and the demand for flexible work schedules, there has been an unprecedented rise in the market for independent consultants, contractors, and highly skilled, enterprise-grade freelancers.

Employers and top leaders are now presented with an opportunity to either continue the outdated tradition of only offering permanent jobs or cherry-picking the skills when needed from talent anywhere in the world. In this blended model of the future, smart companies can keep a permanent workforce for their consistent roles and deal with the more fluid side through expert contract workers.

In Part 1 of our series on hiring independent talent, we’ll talk about how companies can identify the need for freelance talent, list its pros and cons, and compare the true cost of freelance over full-time talent.

Identifying the need: Hire freelance vs full-time talent

The freelancing hiring and contracting journey begins with assessing the need for external talent. So, here’s our 101 on how you can identify the demand for independent talent vs permanent employees.

1. Do you want to fill a skills gap temporarily? Will you be needing the talent for a long time, or just for a project? Or are you simply not sure?

Often, projects require personnel with a niche set of skills. This may deter firms from taking them up, because the person hired for the job might not be needed after it is over. At times, companies risk being over-staffed if the next set of anticipated projects don’t come in.

The solution? If the job is not a routine task, temporarily hiring a freelancer or independent consultant would make more sense. This way, companies can access specialists as and when needed without keeping them on their staff permanently.

2. Unavailability of full-time resources in a particular niche?

At times, there is a lack of talent ready to take up full-time roles in certain areas. By only relying on permanent talent or a local talent pool, organisations restrict their hiring ability for those hard-to-fill roles. Freelancers allow companies to tap into a global talent market, especially since remote working has become the norm worldwide.

When companies have a sole focus on hiring full-time resources, they close doors to opportunities to strengthen and refreshen their thinking and talent pool and the ability to hire people with the right technical competencies quickly.

Also, if budget allows, companies may be able to attract independent talent to fill critical roles for a defined period and, at the same time, continue the search for permanent solutions.

3. Unable to attract the right talent?

Some companies find it challenging to attract the right talent in specific fields for a permanent career. For example, an insurer may find it difficult to compete with the “Googles” and the AI scale-ups of the world to attract top-level tech professionals for permanent jobs. However, for an interesting project, the dynamics shift. Top independent consultants are not just interested in collecting cool brands for their portfolio; it’s just as much, if not more, about adding projects that expand their experiences.

To attract top talent, you need to sell the project to them in terms of the skills they will develop, their autonomy, etc. – but obviously, it needs also to be true. There’s also the global element of the new talent economy. Thanks to the rise of the freelance market, organisations that once found it hard to attract skilled people can now hire talent from across the globe. You can also enter global markets and explore opportunities by hiring local freelance talent who can add value and help your company tap a broader customer base.

If your organisation still struggles to attract talent, you may need to address your value proposition to freelancers and independent consultants more fundamentally. Have a look here.

4. How quickly do you need the person?

The fast-paced nature of today’s digital-led business landscape requires organisations to always have the right people in tow to build agile operations and boost productivity. However, this is often at odds with the realities of permanent hiring. Given lengthy recruitment processes and notice periods, it can take three months or more to source, hire, and onboard a full-time employee.

Through independent talent platforms like Outsized, you can hire vetted talent within a few days, fuelling innovation and improving speed-to-market. Moreover, having worked with a whole range of clients, these independents come in like a breath of fresh air, bringing in new ideas, enthusiasm, and perspective to your company. Read more: 5 ways consultancies are using freelancers to their advantage

Comparing the cost of hiring independent vs permanent staff

When deciding between hiring on contract and permanent staff, it’s important to compare the true cost of the two options.

As discussed earlier, hiring and onboarding permanent staff may take months, leaving companies in a bind when positions remail unfilled. On the flip side, organisations can hire freelancers within a few days. It’s all about the opportunity cost. Plus, freelancers often bring a high level of motivation to the table, consistently delivering their best work.  It is likely that contract positions attract top-tier talent more readily than permanent ones.

The actual cost of hiring freelancers often turns out to be comparable, if not cheaper than recruiting full-time employees. Why? Because freelancers spare companies from various overhead expenses like office space, certain benefits etc. Moreover, you only pay freelancers when you actually need them on projects. With permanent staff on the other hand, you might have periods when their skills are not really required or fully utilised.

Of course, it needs to be a fair deal for both sides for this model to work. Given the lack of certain benefits and the risk of downtime between projects, you should expect to pay independent talent more on a pure day-by-day comparison of fees and salaries. However, remember that such a comparison ignores the quality, utilisation effectiveness, and the total cost advantages mentioned above.

The workforce of the future is hybrid

Post pandemic, organisations have become comfortable adopting hybrid workforce models — a mix of onsite and remote employees, and permanent and freelance resources. While we advocate hiring independents when require resources with a niche set of skills, or for a temporary need, full-time hires of course still have their place.

Ultimately, the best approach would be to build a strong team with a healthy mix of permanent and independent resources to expedite business growth and accelerate innovation. And if you are still confused, you can always go in for a “try before you buy” approach by hiring freelancers, allowing both sides to see if you are right for each other.

In part 2 of our Guide to hiring independent talent we’ll go through the critical aspect of developing a clear scope for the independent talent.

About the author

Johann van Niekerk is Co-founder & CEO of Outsized, responsible also for the day-to-day operations of the South African entity. Johann is a qualified actuary and worked as a product development specialist at Metropolitan Life. He later headed the Business Development function at reinsurer RGA, later Marketing as well as being the General Manager at RGA Ventures – the corporate venturing arm. Before joining Outsized, Johann was the General Manager of RGAx, RGA’s innovation accelerator.