Written by Benjamin for iqDynamics
The gig-based economy has been slowly but steadily gathering traction over the years and with good reason. Freelancers offer employers the freedom and flexibility to bring together a group of highly-talented individuals with specialized skill sets for short-term or projects.
The costs associated with hiring freelancers are usually lower when compared to taking on full-time employees as they are not entitled to receive benefits that would otherwise be available to regular employees.
Alongside this, softer economic conditions and changing demographics have encouraged an increasing number of Singaporeans to enter the freelance marketplace. Most of these freelancers have honed their skills working as full-time employees and are now seeking to monetize these skills.
As the prospect of a global recession looms on the horizon and a grim economic outlook, Singaporean companies have already begun taking steps to reduce costs and optimize their operations – a fact that could open the door for the increased adoption of freelance workers.
Furthermore, as has been demonstrated by other countries, large offices could become a thing of the past due to the need for social distancing to be practiced. The workplace of the future could instead be represented by teams of freelance contractors working remotely on different projects.
This poses a question to HR professionals everywhere – with the rise of the freelance economy, would HR management still be relevant? And if so, what is the role played by HR in the gig economy?
The mindset that freelancers play the role of simple contractors or temporary staff members is an outdated one. With freelancers becoming increasingly commonplace, blended workplaces i.e. enterprises hiring a mix of freelance and permanent employees are likely to become the new norm.
Unlike regular employees, freelancers are driven and motivated by an entirely different set of factors. Thus, HR professionals need to work together with internal stakeholders to identify and recruit freelancers whose goals are aligned with that of the organization.
For example, some freelancers prefer to work on a project basis for a large client base where others prefer to focus on developing a steady stream of repeat work with a smaller group of clients.
All too often, the lack of communication coupled with unrealistic expectations has led to numerous failed projects. A fact which highlights the need for HR to understand the requirements of their organization alongside the expectations of freelancers.
Situations where freelancers have been shortchanged or even cheated outright by clients are regular occurrences as they often have little to no legal recourse. Not only is such behavior unethical, but it can also result in an organization being blacklisted by freelancers.
Upwork and Fiverr are one of the most popular freelance sites and they offer freelancers the opportunity to rate their clients and vice-versa. Oftentimes, poorly rated clients are avoided by other freelancers which can make hiring talent difficult.
The HR department has a responsibility to ensure that ethical practices are maintained when recruiting and hiring freelance employees. Whilst freelancers may not be full employees, employer branding still plays a critical role in order to ensure that the organization’s reputation remains protected.
Freelancers have long occupied a legal grey area in the realm of employment law. Their status as contractors has meant that they do not enjoy the same protections as that afforded to full-time employees.
The argument over how freelancers should be treated under employment law statutes remains a murky one with plenty of pitfalls.
With the variety of legal and tax implications introduced by the Singaporean government, companies need to take appropriate action to ensure that they remain compliant with government regulations.
This can be done by ensuring that the organization’s HR management software remains compliant with the latest government statutes whilst also regularly updating employment policy.
From a 2017 study conducted by Toptal, it was found that the majority of front-line and mid-level managers surveyed lacked the required skills needed to manage a diverse and blended workforce.
Given the radical nature of freelance work i.e. remote working and flexible work hours, some managers may struggle with the concept of managing team members who are not physically present.
Additionally, the relationship dynamic between manager and freelancer differs considerably from that of a manager and subordinate. Hence some managers may struggle with the concept of leading or directing people other than their subordinates.
To address all these concerns, HR professionals must facilitate the flow of two-way communication between managers and freelance workers. Training managers in the art of negotiating and building soft-skills will be crucial if leaders are to be equipped with the right tools to better manage a blended team.
Freelance work or the gig-based economy represents the future for an uncertain world. In order to remain relevant and effective, HR professionals need to take the right steps to ensure that change begins internally. As the economy becomes increasingly competitive, optimization will be the only way forward.
If you are keen in looking for ways to optimize the way your team works, check out our HRMS solution here today!