Morten Bruun is VP, Global Operations at Really.
getty
For an industry that prides itself on being innovative, technology often follows established patterns. Let me know if this story sounds familiar: An exciting startup raises millions of dollars, hires hundreds of employees, then gets fired in quick succession. It becomes a permanent theme.
We often hear that it is caused by inflated evaluations, growth that comes too fast, the need to turn around or inappropriate leadership that leads to this whiplash for employees. Even well-funded companies are not immune. Take, for example, the recent layoffs at mega-brands like Netflix, Coinbase and Twitter.
I would suggest that the problem is not with the companies themselves, but with the way we have been taught to look at our employees. It seems to me that the traditional approach of hiring a fleet of full-time employees is not necessary for a company to experience high growth. In fact, I’d say it’s a mistake.
Contract workers become the norm
According to the Bureau of Labor Statistics, almost 40% of the workforce consists of contract workers. That’s about half of all workers in the United States, and more are leaving full-time jobs every day to work independently. In fact, a recent study conducted by Worksome found that 14% of its freelancer base consisted of people who quit their jobs during the ‘Great Dismissal’.
Freelancing fulfills many employee needs, including autonomy, flexibility, and the opportunity to leverage their unique skills. It is also a phenomenon that companies can benefit from. By looking beyond the traditional workforce, it is possible for companies to better drive their growth.
The risk and reward matrix of full-time hires
The full-time employee structure carries many risks for both the hirer and the hirer as it requires significant commitment. As an employer, you’re expected to give a next step and a reason to stay, and if you can’t, you’re likely to lose that employee. All the time, energy, and education you’ve invested in that employee will leave as soon as they do. With the average cost of hiring a full-time employee around $4,000 and an average onboarding time of one year, the costs are at odds with the average new hire of 1.8 years.
On the other hand, there is a tedious process if it doesn’t work out with an employee. A management framework needs to be put in place, performance improvement plans made, and then you eventually split up. Then you start the recruiting process all over again. This whole process is time consuming and burdens your other internal resources, and is very stressful for the employee as they are likely to be financially dependent on the role.
The future looks flexible
Despite being the standard for decades, this is clearly not a great system. But the sharp rise in the number of talented consultants and freelancers provides an escape from this rigid framework.
So, how do you know if adding a more flexible work tier really works for your organization? There are a few important components for a good flexible structure.
• Make sure your core competencies are covered. When it comes to key positions in your company, such as high-level managers or team leaders, it often makes more sense to keep filling them with full-time employees. There must be people who can effectively manage the consultants and contractors. You can then rely on the expertise of those leaders to determine the gaps you can fill with flexible employees.
• Prioritize a compliance-aligned system. Hiring and hiring a large fleet of freelancers can be time consuming and full of procurement gaps. like more regulations regarding contract work companies that are not well informed about their external contracts can face heavy fines. Make sure you have a knowledgeable in-house resource or partner to guide you through this process.
• Create an effective recruitment strategy. Finding good freelancers involves more than just running to a job board and contacting the first available option. When it comes to more technical roles, recruiting contract workers becomes a recruiting exercise. Candidate screening, interview management and onboarding is a process that requires internal planning.
The work world as we know it has been turned upside down in recent years, and the real area we need to innovate in response is how we structure our organizations. The positive effects of a flexible workforce speak for themselves. Companies that are open to the idea of outsourcing get top-level talent within a scope and schedule that makes sense to the business. Yes, full-time workers will continue to be needed, even in the most flexible structures, but if we can change our thinking about what makes a workplace, there are benefits to be had everywhere.
ukbusinessupdates.com Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?
