Are Freelancers a good option for your business?

Freelancer, contractor, consultant, associate; job titles commonly seen on LinkedIn profiles, including my own! There are around 4.8 million self-employed people in the UK and over 1 million people working in the gig economy, and as those numbers grow so does the confusion.

In fact, it has become such an issue that the government commissioned The Taylor Review of Modern Working Practices, published in July 2017, to try shed some light on the situation and make recommendations. The Taylor Review found that legislation surrounding freelancers in particular is ‘more complicated than it needs to be’, and called on the government to provide greater clarity for both individuals and employers. In their February 2018 response Good Work, the government has pledged a commitment to provide this clarity and is currently consulting on legislative reform.

Who and what are freelancers?

To keep things simple, for the purposes of this article I am going to use freelancer as a generic term for any individual who operates on a self-employed basis. This includes people who take on projects on top of having a day-to-day job as well as those who work independently full-time. This does not however include business owners, who may technically be self-employed themselves but have their own employees, or people on zero-hours contracts, who as discussed in my previous article would be categorised as workers.

The distinction between being a worker and being self-employed can be subtle but has major implications for employment rights or lack thereof. Depending on the balance of control, independence and obligation with an organisation, a freelancer may actually be a worker for all intents and purposes. This has led to a number of employment reclassification cases and is therefore something to be conscious of when looking to hire a freelancer as it could potentially cause issues later down the line if their contractual agreements are not clear.

So if it causes all this confusion, why don’t freelancers just get a proper job? Well, contrary to popular belief, it is not because they couldn’t. In fact, the CIPD found that only 14% of people they surveyed worked in the gig economy because they could not get a permanent position. While it may be the case that certain industries predominantly consist of freelancers based on the nature of the work, for example graphic design or social media, a CIPD survey found that the most common reason for taking on gig work was simply to boost income. With job satisfaction among gig economy workers similar to that of those in traditional employment, freelancing is becoming increasingly attractive to those who place a high value on flexibility and independence.

What are the benefits of hiring a freelancer?

As with zero-hours workers, freelancers offer companies greater flexibility in terms of managing fluctuations in demand and controlling labour costs. Engaging a freelancer for a specific project or a certain period of time has proven highly beneficial to small businesses in particular as it allows them to develop new high yield projects without diverting employees from their existing day-to-day operations. Freelancers are also often highly experienced or specialised in certain subjects, bringing with them much needed skills and expertise a business may currently lack or be unable to afford on a permanent basis. Being accustomed to starting new projects all the time, they should also not require a long period of on-boarding so should in theory be working up to speed in a shorter timeframe than when hiring a permanent employee.

What should I watch out for?

The biggest concern when hiring a freelancer has to be control. Without a recommendation it can be hard to gauge whether they are reliable, and you have less control over their quality of work than with an employee you have trained. The main attraction of engaging a freelancer is that they provide flexibility, but the other side of this is that they could be busy when you need them. Many companies therefore have a pool of freelancers to draw from, which can come with it’s own challenges in terms of resource management. One additional consideration is cost; while a freelancer may be cheaper than hiring a permanent employee they can prove more expensive on daily terms, so some careful calculations are required when weighing up the decision.

So should I hire a freelancer or not?

There is no doubt that hiring a freelancer can greatly benefit any organisation, big or small. Freelancers bring skills and experience as well as flexibility, perfect for short-term or highly specialised projects. Given that we are currently experiencing a tight labour market, hiring a freelancer could even offer a temporary solution to your recruitment issues by buying you more time to resolve hard to fill vacancies.

The number of freelancers in the UK is expected to keep rising as people continue to prioritise flexibility in their working lives. Those looking towards retirement are particularly well suited to freelancing as they have years of experience and knowledge to offer but may not want to be locked into a permanent position. Keeping older people engaged in the workforce will not only go some way to relieving pressure in the labour market but can also provide long-term benefits if their experience is utilised in the development of younger generations.

While there are certain pitfalls to consider when engaging a freelancer, an awareness and preparation for these eventualities will minimise their impact. As in the case of zero-hours contracts, managing expectations and establishing a healthy working relationship will ensure that freelancing is beneficial to both the individual and the organisation hiring them. Freelancers have a lot to offer your business, so make the most of it!