Companies need to include Freelancers and Contractors in their People Development Strategies
With a new generation of workers less willing to commit and a wider variety of employment options gaining popularity, Learning and Development can’t solely focus on full-time employees.
Employee commitment — how long?
New generations are perceived as less eager to commit to companies for years — they are said to switch employers more often than their older peers. The “job hopper” trend, especially seen in industries like tech or media, is helped by direct digital recruitment processes and powered by a desire for better career moves and higher salaries. Changing jobs frequently (1–2x a year) is a model associated largely with millennials, who are stereotyped as wanting everything “on demand.” While this phenomenon doesn’t tell the whole story — as, according to the U.S. Department of Labor, employee tenure is actually quite stable, and job-hopping is more a young worker trend than a millennial one — the widespread perception still remains and raises the question for companies about how much they should invest in these allegedly fast-moving workers, if at all.
Break up with benefits?
Employees who hop jobs may continue to contribute to their former employer indirectly or informally, even after their work contract has ended. For instance, in an effort to retain talent close to the core of the company activity, many companies are increasingly investing in corporate alumni networks, and even use the allure of these alumni networks as a recruiting tool for new hires. Valued as brand ambassadors and supporting recruitment and sales, former employees today are praised as the “2nd circle” beyond the company’s core.
Especially in project-based industries like consulting, it is becoming more commonplace to bring back previously trained talent on new projects, regardless of their employment status. At international consulting firm McKinsey, it’s quite possible to be put on projects as an independent contributor well after having moved on from being an employee, and the network is promoted as a “lasting benefit.”
While it’s becoming harder for companies to retain talent, keeping them close after they’re officially “gone” is becoming more routine.
For L&D leaders, this means that the employee experience is still vital, regardless of how long the employee stays with the company: shared experiences with colleagues and their collective onboarding are often just as formative as years spent on university campuses.
The New Independent Workforce
New ways of working and contributing are reshaping how companies are building and engaging their workforces. Some platforms are connecting companies to independent workers willing to jump in on a project on an hourly basis, while others let them find the right talent on a more regular but remote basis. From the single task contributor to the lifetime employee in one company, more options are on the table, and freelancers can be extremely different from each other.
According to the report “Freelancing in America: 2017” by freelancer platform Upwork and US-based Freelancers Union, the number of freelance workers is increasing three times faster than the rest of the workforce — contributing $1.4 trillion annually to the economy. Looking specifically at learning, 55% of independent workers are reskilling and preparing for the future and automation’s possible takeover of their work.
According to McKinsey, there are about 4 categories of independent workers which can be clustered by two factors: the freedom to choose freelancing (“Preferred Choice” vs “Out of Necessity”) and nature of the income (“Primary Income” vs “Supplemental Income”). If the largest category standing today is the “Casual Earners” (40%), the second largest is the “Free Agents” (30%), together making up 70% of independent workers choosing to be independent.
Among the “free agents” there is an interesting sub-trend: the top talents who decide not to be full-time employees. Specifically, in the US in 2018, according to the Labor Office, 12% of those freelancers were making more than $100,000 per year, and nowadays, they account for more than 21% of this category.
This means that more and more highly qualified workers decide to jump out of the employee wagon, and/or that more individual workers can thrive financially in such position.
From an L&D perspective, those independent workers are responsible for themselves. Learning usually happens on the job through a number of new projects, and development can be facilitated through community-building and support from platforms or communication systems within freelancer collectives.
The Opportunity for L&D
So why does this matter? On one hand, we have an increasing number of highly skilled talent who would rather engage as freelancers than being an employee, and on the other hand, those freelancers have a number of options to design their own career and development paths.
The battle for talent in a shrinking pool has become an all-out war, yet new ways for companies and talent to collaborate do offer promising opportunities. This nevertheless requires a new HR skillset to manage a growing “liquid talent” workforce.
Hiring for some functions has become so hard that some companies might start investing in freelancer education, as Gilbert Dietrich (Aperto) speculates:
“Today, we expect freelancers to be ready for work but that will possibly change.”
Onboarding can be key for external talent, yet they are often taken care of by procurement and not HR functions. This needs to be re-evaluated in light of this changing landscape.
Learning and Development functions needs to take contractors and freelancers into account in order to win talent, but also to use the opportunity to facilitate and foster a culture of learning: Having more talent from outside the company could actually be a great way to stimulate a company’s full-time employees.
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This Article is an excerpt from “The Future of L&D” — A Report about the State and Evolutions of Corporate Learning & Development: 2019 Edition