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The way big companies are structuring their workforce and hiring employees is rapidly changing.
For the last 70 years, companies have hired most of their workers as permanent employees. Contractors were only employed for short periods between 3 and 24 months. They were seen as a stop-gap solution to cope with the rapidly increasing workload. A contract role also allowed hirers to “try-out” a candidate before offering them a permanent position.
Then there were tasks and functions that large organisations preferred to outsource. The reasons varied:
to keep the headcount down
to maintain a lean structure
to reduce operational costs
to access the expertise they didn’t have
They used to delegate these tasks to agencies or outsourcing companies, which operated under their strategic direction.
This modus operandi hasn't changed for several decades, until now. Only recently, some major trends have started to fragment the conventional, and often static, workforce model.
The evolution in technology and the need for flexibility for companies of all sizes, and workers alike, have started a real Freelance Revolution .
In line with this growing trend, large organisations have started to engage independent workers directly. This has allowed them to reduce their operational costs and stay competitive in an increasingly volatile market.
Companies like Ancestory.Com, Bloomberg, Expedia, Conde Nast and Facebook hire freelancers with the most diverse skill sets, such as:
data quality reviewers
robotics camera operators
magazine photo assistants
But another phenomenon, which only in appearance seems to be moving against the outsourcing trend, is also taking place. Big companies are bringing functions like marketing, data, and creative in-house.
Photo by ThisIsEngineering from Pexels
The NHL, Getty Images , Electrolux and Bayer have all taken various marketing capabilities in-house. These companies are looking to reduce costs, have more control over their brand voice, or build deeper relationships with their customers.
In a market where consumer needs are becoming more and more specific, brands seek direct access to data and insights. With a greater understanding of their audiences, companies can offer personalised products, services and communications. Taking advertising in-house also allows marketers to test more, faster and scale at will ( Naningans ).
But how can companies move functions internally and outsource to more freelancers at the same time?
The answer is that many big companies are keeping the most strategic roles in-house and delegating their implementation to freelancers.
Read on to find out 7 reasons why this works for them.
7 Reasons why Big Companies Hire Freelancers
Companies are changing their organisational structure and allowing freelancers to become part of their workforce for many reasons.
1. Retain know-how without the burden
As illustrated above, companies are keeping or moving certain functions in-house to maintain control over their most critical know-how.
These companies are making a clear distinction between their unique and invaluable IP and category knowledge, which can be accessed from the market effectively and economically.
By outsourcing specific tasks to freelancers, large organisations can free up time and resources to focus on their core competencies.
2. No overhead
From training costs to office furniture and supplies, from sick and holiday pay to other benefits and bonuses, permanent employees come at a price. Usually, all the associated costs plus a salary end up being higher than a freelancer’s fee.
The real comparison needs to be made considering the long-term view, not the pro-rata costs.
Salaried workers have job security and sometimes this translates into reduced engagement or productivity. Freelancers instead usually go the extra mile to impress their clients and obtain repeat business. Using freelancers is how they reduce their admin and briefing time, and increase their profits.
3. Freedom to adapt and evolve
The changes in technology, the evolution of customer needs, the environmental challenges and the Covid pandemic, all have shown that adaptability is key to survive and thrive in the current context.
Thanks to freelancers, companies can satisfy market needs at the time when they arise.
Image by hang niu on Unsplash
4. Resource elasticity
Keeping a close eye on staff costs is usually a major concern for smaller organisations. Faced with increased competition, now big companies are also using freelancers to deal with workload fluctuations and to reduce their fixed costs.
Companies have experienced that freelancers get the job done faster. This is crucial for organisations that need to be highly responsive to market changes.
Plus, hiring managers are sometimes not satisfied with staffing firms. They found that engaging independent professionals directly provides them with more transparency in the hiring process.
5. “On tap” access to unique talent
Companies hire independent workers to access very specific skills they don’t need on an everyday basis.
It could be a mural artist engaged to paint a wall for the head office. Or they might need a producer to develop a podcast series that promotes the company’s mindfulness program for its employees. These are very specific skills that are not required very often.
But they also hire freelancers for micro-tasks or time-consuming assignments. This frees up valuable time, which their employees can dedicate to more profitable projects.
6. Introduce new thinking
People with diverse backgrounds and different work and life experiences bring new perspectives to the table. This is crucial to discovering novel approaches, especially when consumers expect brands to understand them and be aligned with their values.
We are entering a time of liquid expectations which seep over from one category to another. If a customer experienced a seamless and human-like interaction with an online food grocery app, they know the technology and the processes are available for other brands to replicate.
Because freelancers work for a variety of clients, they can transfer ideas from one industry to another, or solve issues faster if they’ve faced them before.
7. Keep full-time employees up to date with their skills
When freelancers are introduced to existing teams, employees are subject to new stimuli that widen their thinking.
Introduced to new ideas, teams feel energised and have the opportunity to reconsider and improve their ways of working.
Often the desire to impress the freelancer who collaborates on the project results in a productivity boost.
Photo by ThisIsEngineering from Pexels
Whether they are restructuring and changing the way they hire their workforce or looking to fulfill specific needs at critical times, large organisations rely on freelancers to survive and thrive.
Research shows that companies will keep experimenting and evolving the way they engage with temporary workers. In fact, the worldwide freelance economy is expected to grow and reach a staggering 455.2 billion U.S. dollars by 2023 ( Statista) .