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There’s been a lot of talk about the freelance economy over the last few years, and for good reason: engaging specialists on a project basis is starting to become the normal way to work.

Results from “Freelancing in America: 2017” (FIA) study show freelancers make up 37% of the U.S. workforce, contributing an estimated $1.4 trillion in annual earnings. And this group is growing three times faster than the overall U.S. workforce since 2014.

Individuals aren’t just enjoying more freedom living a freelancer’s life, companies benefit too. As work becomes more specialized, companies can access the experts needed to get critical work done.

If you’re considering utilizing freelancers, you probably noticed the workforce comes with its own vocabulary. For example, what’s an FMS versus an IC, and why should you care? This quick guide will help you make sense of it all.

NOT ALL FLEXIBLE WORKERS ARE THE SAME

This rapidly-growing workforce goes by many names. Although these names are often used interchangeably, they refer to different types of flexible workers.

Freelancers: Skilled, independent professionals who only work on a project basis. They often specialize in areas including IT, engineering, creative, and legal.

Independent contractors (ICs): Freelancers, consultants, agencies…these are all types of independent contractors that are part of the contingent workforce. Unlike temporary employees (temps), ICs are not employed by a company or staffing firm.

On-demand/gig workers: On-demand and gig are more often used when referring to contingent workers performing commoditized work, such as a waitress working a special event. What’s more, on-demand workers usually perform temporary jobs that require a very short, or no, vetting process.

WHAT IF YOU NEED A TEAM OF FREELANCERS?

Some projects are more complex and may require a team of different specialists. Or the project is so large, it may require several of the same type of specialist. Instead of sourcing and engaging everyone separately, you may want to hire a freelance, or remote, agency.

Remote agencies range in size and specialties such as marketing or web development. Agencies can consist of a few freelancers working together, such as a UI designer, a front-end developer, and a back-end developer. Or they can be large companies with hundreds of full-time employees working out of a central office.

Not only do you have a team of talent working on your project, you also have the convenience of a single point of contact.

It may be time to engage a remote agency if your project:

  • requires multiple freelancers with a similar skill set
  • is complex, with multiple workstreams and phases to manage
  • requires multiple disciplines (e.g., planning, development, design, QA)
  • is large and has a tight deadline
  • is longer-term, requiring a consistent availability of talent
  • requires different skillsets at different stages
  • may require future iterations or other work phases

WAYS TO ACCESS TALENT

Thanks to technology, it’s easier to access—and collaborate with—talent, no matter where they’re located. Below are the most popular options:

Crowdsourcing: For talent acquisition, crowdsourcing is when you seek talent referrals from social networking platforms, including those of other organizations or recruitment agencies.

Direct-source/self-source: Direct-sourcing is simply when you fill a job post on your own and cut out the middleman (e.g., staffing agency). You can do this by connecting with individuals directly, posting a project on job boards, reaching out to your LinkedIn network, and so on. Many companies prefer direct-sourcing freelancers because it often speeds up the project start time, reduces costs, and improves hiring accuracy.

Online freelancing platform: Freelancing websites provide a convenient way for talent and companies to connect. When you have a project need, you can go to these websites to source talent, contract them, and pay them.

Not only can you directly access a larger talent pool, you also save time. Freelancer websites streamline and automate many of the related engagement processes. On some platforms, like Upwork, you can engage individual freelancers or remote agencies.

Freelancer Management System (FMS): If your organization has several needs, you may want to use a more robust online platform called a Freelancer Management System. An FMS enables staff members across all departments to contract talent, track spend, pay freelancers, and ensure compliance from a single dashboard.

Whether you engage a single individual through a freelancing website, or use an FMS for multiple projects, online platforms are shown to create value several ways including:

  • Lower cost-to-hire by up to 60% over traditional channels
  • Fill projects within two to four days, versus the average six to eight weeks using traditional agencies
  • Deliver similar or higher quality work more cost-effectively

Human cloud: This refers to work models that enable projects to be established and completed through an online platform. The platform must support all stages of a project from sourcing talent to tracking project deadlines, to paying talent. For instance, a recruiting website may source talent worldwide, but it’s not part of the human cloud because it only handles talent sourcing.

Freelancers aren’t just for startups anymore

Before engaging your first freelancer, brainstorm the many ways they can help your company grow. Go beyond typical tasks as web-hosting giant, GoDaddy, did when they engaged over 60 web developers to create and launch a new product. And how mobile messaging app, Tango, utilized customer service agents in other time zones to provide 24/7 customer service support nearly overnight.

Freelancers can provide the efficiency, agility, and innovation companies need to remain competitive. Thanks to online platforms and online collaboration tools, it’s nearly as easy to work with someone across the globe, as someone down the hall.