contractors

How the New “Gig Economy” is Going to Help Business

By Catherine Lang-Cline

I am sure that you have been hearing a lot about the new “gig economy.” But what exactly is it?  As a former graphic designer and someone that has created a business based on workforce solutions, I can tell you that this way to work has actually been going on for quite a while and it has been a very successful way to get work done. I can tell you that when I worked as a contractor, I loved it. I knew I could bring my best game, my strength, to any project and really enjoyed each experience. As someone who has also hired freelancers and contractors, there really wasn’t anything more exciting than hand selecting and working with people that were the best in their field, or at least far better than me.

A “gig economy” defined by WhatIs.com is “an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements.” This is actually something that graphic designers, writers, illustrators, etc., have been doing for years because they find their jobs in marketing and advertising. Marketing and advertising departments of all sizes have always ramped up talent as needed as part of their business model. They have always found people with special talents for special projects as they needed them. They have also always sent them away when they were longer needed. This has been an accepted model for many, many years and now the rest of the workforce is mimicking this idea and with great success.

This model can work quite successfully in business for a number of reasons:

Flexibility & Freedom

Today’s workforce is wanting more and more flexibility. What better then to have people work as needed and not pay for the downtime? They have freedom, you have less overhead.

Temporarily Fill Skills Gaps

You have access to all of the talent out there without having to officially add to your staff. This kind of flexibility in a company can save a lot of money if a surge in business is temporary. If you are a small business or start-up, this is a really great way to build your business by just having someone help out hourly as needed in areas that are not your strength.

Save Money

With that said, an hourly rate or project rate can sound intimidating, you actually are saving money by not having any costs to onboard, to contribute to worker’s compensation, and of course, benefits. No phone line, no business cards, etc.

Optional Employee “Trial Run”

Millennials are wanting to experiment more with different jobs. You can both check each other out without any kind of deep commitment. But with luck, in time, you could find out that you can’t live without each other. While they are freelancing or contracting with you, you get to understand their skillsets and their work ethic. You both get to find out if there is a culture match.

You can hire specific skills as needed. There is no expense in having to train staff if you can just bring the talented people for a specific project. For example, you need someone to rebuild your website or write new content. This is a task that only needs to be done once. Hire the specialist and when the job is complete, they move on to the next gig and you have a stellar new website.

Keeping #4 in mind, always make sure that this “gig employee” is set up in an actual company. Get a W-9 on file. If they don’t have W-9, you are leaving your business exposed from a tax standpoint. One option to avoid this is to start a great relationship with a company that specializes in temp workers. Find one that you really like working with and really understands your company's needs. That way you are just one phone call away from finding the best talent at the price you can afford. Another option is to ask for references and build your own database.

A study by Intuit predicted that by 2020, 40 percent of American workers would be independent contractors. How might that number change your business model? Even if you are opposed to the idea, this is the way the workforce is wanting to work today. This is how the best talent is going to be available. Think about how this could work where you are. Because the “gig economy” is here and if you are open and ready, it could be the best thing to happen to your business by having access to the best talent available, only when you need it.

Freelancing Is The Future of Business

By Catherine Lang-Cline

According to Dustin Haisler, the Chief Innovation Officer of e.Republic, there are currently 53 million people, or 34% of the American workforce, freelancing.

By the year 2020, an estimated 74 million people, 50% of the American workforce, will be freelancing. 

What is causing the shift? First reason, the Millennials. While we have all been discussing the working practices and beliefs of the Millennial workforce as they started to enter the market, something happened: they grew to be a larger demographic than the Baby-Boomer generation. What this means is, if you want to be competitive in business, you are going to have to hire a lot of Millennials, and they are wanting to freelance.

The second reason, everyone else wants to freelance as well. In general, everyone is looking for a lot more life balance and finding their purpose. A lot of that purpose lies in the things that they are very good at. So even the seasoned workers are opting out of “business as usual” and looking for something that is giving them more purpose, more freedom to be with family, aging parents, or to just simply do the things that they want to do. Money may not matter for some as they are setting their own schedules and starting their own businesses. They are measuring success not by money, but by time, the time they get to choose what they want to do. And the time they get to work on things that they love to do.

What is great is that it can still result in positive results for your business. Staff having control of their time does not mean that they will work less. Most people work more, but choose when they will work. It can also help your business by eliminating the cost of hiring and firing. You can hire people as needed. You can afford to have people that you normally could not afford work on special projects for you because you are not hiring them and needing to keep them. You can briefly afford to hire the best in the business because they leave when they have completed the job.

As always, understand how this relationship works. Freelancers and contractors are not employees. Be very clear about this to people coming in who want to serve as a freelancer or consultant, as well as the people on your team. Not doing so could lead to tax implications and employment violations. If you have any concerns about how this is handled, you may want to contact your accountant or look into having a staffing company take on freelancers and contractors as temporary employees. That way, the responsibility of taxes, healthcare, etc. would be the responsibility of the staffing company.

Freelancing is becoming more of the norm. In many ways, this can be a real advantage to your company. You can work with people as they are needed rather than worrying about the cost of hiring, firing and overhead. Plus, you can surround yourself with the professionals that are working with a purpose.