How (And Why) Companies Should Engage The Liquid Workforce
The rise of the liquid workforce is transforming how companies and people work together. Are you ready for the future of work?
The rise of the liquid workforce is transforming how companies and people work together. Companies are learning that temporary, specialized workers — or what is increasingly known as “the liquid workforce” — can help them stay relevant in the rapidly evolving, project-based, digital landscape.
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The Growing Liquid Workforce
You may have learned the term “liquid workforce” from Accenture in a 2016 report describing the growing trend of freelance workers in the marketplace. Since that report was published, the number of freelancers has continued to grow. A report from Upwork and Freelancers Union estimates that 57 million people worked freelance this year (an increase of 4 million since 2014) and contributed $1 trillion to America’s gross domestic product.
This increase has made it easier for companies to engage the liquid workforce and recognize their numerous benefits — including more flexibility, instant support for specific projects, on-demand access to expertise, reduced overhead and lower costs. Tapping into the liquid workforce allows businesses to be nimble by fluidly shifting their business as new challenges arise.
Who Makes Up the Liquid Workforce?
Freelance work is not a new concept. The vast majority of people in creative fields, such as entertainment and fine arts, have long operated as freelancers. For educated professional workers in fields such as IT, marketing and consulting, however, the normalization of working remotely has allowed more people to unchain themselves from traditional W-2 employment in favor of a more autonomous work life. Moreover, the current availability of online training and certifications allow freelancers to learn skills independently — making them appealing to traditional businesses that may only require those specific skillsets for a short period.
Freelancers today view their work as a long-term, intentional option, not simply a way to supplement income or recover after a job loss.
Why Use a Liquid Workforce?
Businesses are evolving faster than their full-time employees can keep up. By utilizing the on-demand liquid workforce, a business can assess a need and onboard a freelancer to address it more quickly than they could train up their own employee.
Download Liquid’s Independent Contractor Agreement Checklist as a handy reference guide.
1. Specialized Skills
With the rise in talent-matching platforms, it’s become simpler to find the right on-demand workers. There are now platforms to hire software developers, business consultants, content writers, marketers, designers, accountants, lawyers and even salespeople. Once you’ve found the right worker and sign a contract agreeing to terms, they can start working ASAP. Moreover, with low unemployment rates, it’s often easier to find a freelancer for a short-term project than it is to fill a full-time role.
To find the right freelancers with the specialized skills you require, you must clearly define the project — including detailed proposed deliverables, qualifications and work experience required, and payment. Highly experienced freelancers are busy and in demand, so make sure your project is compelling.
2. Reduced Cost
With companies increasingly shifting to project-based workflow, once a project is complete, the freelancer is released without any burdens on the corporation — no health benefits to pay, no pensions to guarantee. Without benefits or office space, companies can expect to save 30%–40% annually when working with freelancers versus employees. It’s easier to ramp up or pull back on spending on freelancers than it is with salaried employees.
To make it easy to activate your liquid workforce whenever your company needs project-based support, set up a standardized onboarding process for your freelancers. Automating onboarding will save you time and money, plus help avoid compliance risks.
Freelancers thrive on repeat work and repeat customers to stay in business. They aim to deliver top-notch work, every time, in order to maintain relationships. While employees know that a bad week likely won’t affect their pay, freelancers know that client contracts are always subject to renewal.
Every time you are considering hiring a new freelancer, make sure to review the freelancer’s past work and client ratings/testimonials. A quick interview helps you not only verify a match for the project but also align expectations. Consider engaging the freelancer for a smaller test project to thoroughly vet skill set and fit before commencing a critical project.
Freelancers see innovation as a part of their working method rather than just a buzzword. Generally, they’ve developed flexibility, the ability to make sense of uncertainty and complex ideas and an understanding of how to communicate new ideas and roll them out quickly.
To hire freelancers adept in agile methods and thinking, talk to them about their project management style. How do they communicate and collaborate with their clients? How do they self-assess their work?
Working with the liquid workforce allows companies to find talent outside their geographical limits. Sometimes this means reduced costs. But it can also deliver insights into new markets. Using freelancers may open the door to growth while minimizing risk in case things don’t pan out.
When hiring freelancers internationally, make sure to assess mutual communication fit. This fit is more than language — you and your freelancer must be able to understand each other fully or this will become a hurdle that may cause project delays and rework, and potentially incur an additional cost. Communicate availability windows upfront to avoid causing project interruptions while the freelancer waits to hear back from you.
Contingent workers have become a critical resource for companies needing deep expertise or additional on-demand brainpower. The liquid workforce is becoming an increasingly valuable component of a talent acquisition strategy. As companies hope to compete in today’s global marketplace, they must learn to engage the liquid workforce or risk getting left behind. Companies that tap into resources for freelancer acquisition and freelancer management will decrease their costs and increase their revenue — helping companies stay ahead of their competitors.
Ready to get started? Liquid simplified onboarding, managing, and paying your freelancers and independent contractors. Try Liquid today!
Category: Freelancer Management Industry Trends
Updated: February 10, 2020
Quick note: This is not to be taken as tax advice or legal advice or payroll advice. Since tax rules and laws change over time and can vary by location and industry, consult a CPA / tax advisor and/or attorney for specific guidance.