How This Freelance Approach Can Produce Full-Time Results

Companies are exploring a workforce model with 10 percent full-time workers and 90 percent freelancers.

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By Peter Johnston

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Not that long ago, people viewed freelancers as the people that carried out menial outsourced responsibilities. If companies had a low-skilled, repetitive task such as data entry or phone support that no full-timer wanted, they'd delegate it to a freelancer.

But the growing number of highly skilled talent choosing to freelance shows that it's not just mundane tasks that they're choosing to take on. In fact, 40 percent of the 1,267 American adults polled in December by NPR and Marist do freelance work in addition to their regular jobs; an additional study, a joint venture conducted by Harvard University's Lawrence Katz and Princeton University's Alan Krueger, found that 60 percent of the jobs created in the U.S. from 2005 to 2015 were of the freelance, independent contractor or contract company variety.

Related: The Future is Freelance: How to Optimize Independent Worker Output

This shifting workforce should be a signal to CEOs to rethink their internal organizational structures. And as we all know, rethinking leads to change, which can be difficult for a large organization -- even when it recognizes that one is needed.

Major independence

If the best talent is no longer keen on full-time employment, how will you structure your teams going forward? Some companies use a 50-50 freelance to full-time split, while others break it down to 90 percent full-time and 10 percent freelancers. But business is moving to a point where companies are starting to explore a model with 10 percent full-time workers and 90 percent freelancers.

Though the 10/90 model isn't well-known by that particular name, it has already been used with success. Publishing, for example, was one of the first industries to experiment with that shift. Over time, more and more editors, writers and contributors chose independence over steady gigs. Other professionals soon followed suit, and we're now seeing designers, software developers, project managers, research analysts and even educators adopt a freelance mentality.

If you move to a similar model, you'll have a few considerations to keep in mind. The following will often top the list:

1. Don't onboard with a one-size-fits-all mentality.

Your company probably has an onboarding and orientation process in place for new hires, but the onboarding of freelancers is completely different. Most state employment regulations prohibit you from training a freelancer the same way you would a full-timer, and freelance onboarding has to account for the workers' remote locations and various duties.

My tenure at Google opened my eyes to how important that distinction can be. During my time there, I saw all freelancers onboarded the same way, whether the job was a two-month-long on-site design project or a two-day-long one-off video shoot. That structure, which showed me how important it is for companies to adapt their practices to accommodate their diverse freelance workforces, was a crucial factor in why I started my current company.

Freelance work responsibilities, as the Google example indicates, mean different things for different employees. FreshBooks' second annual Self-Employment Report shows that 68 percent of those surveyed enjoy a greater work-life balance once self-employed, while 59 percent say they work harder than expected. No two employees are alike, so it's important not to treat them in a binary manner.

Some workers want to take on more, and others want to work on their own terms. If someone's freelancing for two weeks, that person doesn't necessarily need to learn the ins and outs of the entire company. Structure onboarding to reflect the services that the worker is delivering.

2. Don't take quality for granted.

Devoting 10 percent of your workforce to full-timers means it's a given that your in-house staff numbers will diminish. But don't let fewer internal employees inadvertently diminish your quality of work; instead, put processes in place to ensure that your services maintain consistent in quality.

Consider a marketing department at a consumer finance company like LendingTree. Marketing teams often have big project launches or seasonal peaks like tax season that result in incredible demand to deliver more marketing materials than other times throughout the year. This is why the consumer loan company automated its ad buying through RevJet while its marketing department puts human labor toward more pressing revenue-driving matters.

LendingTree's use of RevJet demonstrates that a company's services don't have to suffer during a reallocation of human resources. Setting clear expectations and deliverables for freelancers at a project's outset will ensure that quality issues are the exception -- not the rule.

A stripped-down staff doesn't mean your services need to suffer. To maintain consistency, assemble the right tools to track and compile output. Ask yourself, "What do I need in terms of resources to get this off the ground? What will I need as I try to scale and maintain a quality of work?" Put processes and resources in place to ensure stability in quality as you work more freelancers into the mix.

Related: How to Choose a Tech Stack for Your Startup

3. Get compliance in order.

The availability of technology is what makes freelancing such an attainable option for those interested. An Oxford Internet Institute study of online workers found that 24 percent of those who work online reside in India, followed by Bangladesh (16 percent) and the U.S. (12 percent).

Engaging international freelancers can have serious tax and employment implications, so understanding the rules and regulations for working with people across state lines and international borders is paramount. Otherwise, you could end up liable for fines or even end up in a lawsuit.

For instance, two participants in Netflix's "Project Beetlejuice" -- which pays freelancers to watch movies and choose clips -- filed suit against the streaming service because it misclassified them as freelancers rather than employees. They allege that Netflix tried to get around the time-and-a-half payment often associated with overtime. When the majority of your workforce is independent, you need to carefully consider factors like worker classification and compliance.

Get all your legalities in order. If your company works with freelancers in other states or countries, get a clear understanding of each area's respective freelancer laws. Then, ensure that each freelancer is classified correctly in order to avoid any financial or legal blowback.

Related: Protect Your Business From Regulatory Pitfalls, With 'Practical Compliance'

Freelance work is here to stay. And if business keeps moving in its current direction, there'll be no way to get around bringing more than one freelancer into the fold. So make sure you've got the right technology and processes in place for success.

Peter Johnston

CEO of Kalo

 Peter Johnston is the founder and CEO of Kalo, a San Francisco-based freelancer system. Johnston previously served as a designer for Google, a role that exposed him to the challenges presented by freelancer management and, ultimately, inspired him to establish Kalo (formerly Lystable).

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