People Strategy

What HR Needs to Know About the Freelance 'Revolution'

October 15, 2021
November 7, 2023
Jennifer Ernst Beaudry 
Lattice Team

To say the past 18 months have been transformative to the workplace would be an understatement. As many firms deal with staffing shortages, new or renewed commitments to DEIB initiatives, and hybrid workplaces (and possibly permanently hybrid workplaces), HR departments have been grappling with what business as usual looks like now — and how it will look going forward. And experts say one big, potentially lasting change from the pandemic is how employers and employees alike are looking at freelancing now. Is it a Freelance Revolution? Some say yes, and it might just change the future of work.

What Is the Freelance Revolution? 

While freelancing — workers who are self-employed and take on jobs on a contract basis — is hardly a new concept, experts say that the pandemic took the growing interest in freelancing and turbocharged it. According to freelance platform Upwork’s Freelance Forward 2020 survey, 36% of the American workforce, or some 59 million workers, freelanced last year — an increase of 2 million freelancers since 2019.

“This is a very competitive job market,” said Patti Johnson, CEO of Southlake, Texas-based consulting firm PeopleResults. “Talent market expectations have made a big shift in the last year [and] more top talent is considering freelance and more creative options.”

“I definitely see more people opting for freelance work,” echoed Lauren Milligan, career coach and founder of resume service ResuMAYDAY. “Many are parents — women and men — who want a career, but don't want their entire paycheck to go toward daycare. Other people are simply tired of dealing with a commute or bosses and coworkers they don't like. They want to do a specific type of work, but don't want all the ‘baggage’ that comes with it.”

What Freelancers Want

While there are as many reasons for freelancing as there are freelancers, the data suggests patterns when it comes to who is opting into freelance work. 

According to the previously mentioned Freelance Forward survey, freelance growth over the past two years was fueled by highly skilled workers who were choosing freelance work for the increased flexibility and autonomy, whether it was for caregiving purposes or just work-life balance in general. The trend is especially pronounced among younger workers: The survey said that half of Gen Z workers aged 18 to 22 have freelanced in the past year.

Experts said that the explosion of remote work — and the doors it’s opened at many companies unwilling to consider it in the past — have spurred many workers to take the plunge. The competitive job market has also meant that many candidates are feeling more confident in their financial prospects as well. While freelancers don’t benefit from the traditional trappings of full-time employment, like health insurance and paid time off (PTO), and have to pay their own employment taxes (which are paid by employers), freelance compensation can be a major benefit. According to the Freelance Forward survey, 75% of respondents said they made as much or more freelancing as they did while working full-time for a traditional employer. 

The Benefits of Hiring Freelance Workers

HR pros said there are several reasons that freelance talent can be an incomparable asset when deployed strategically. 

“Freelancers can be a tremendous asset to Human Resource professionals” said Robin Elledge, leadership coach and President of Janus Coaching and Consulting. “They give you the opportunity to quickly add manpower for an urgent project, provide greater staffing and budget flexibility, and allow you to upgrade skills in a specific area without adding headcount.” 

“Some HR teams are still managing the pain of furloughs, pay reductions, and other steps taken to reduce costs, and better utilizing freelance workers is a strategy that offers more flexibility,” Johnson agreed. “HR and Talent Acquisition should consider freelance and project resources as a part of the sourcing and talent strategy, not an extra when they can’t find someone to hire. Freelancers can meet the talent market and give more flexible options to a company.”

What the Freelance Revolution Means for HR Teams

But HR teams looking to add or expand their freelance workforce should make the decision a calculated one, experts said, with the company’s short-, medium-, and long-term goals and needs being weighed. Here are four tips to keep in mind. 

1. Choose with care.

If you’re looking to bring on freelancers, experts stressed that it’s essential to have a robust plan for what roles you’re hiring for, and why. Johnson shared a good guideline to go by: “This past year has reinforced the value of hiring [for the] core skills [your company needs] and using external freelance experts for projects and work with a beginning and end [that isn’t] core to the business,” she said. 

2. Communicate.

“Some companies don't think about the impact [hiring freelance workers] may have on their current full-time employees,” Elledge cautioned. Transparency, she said, is always helpful in allaying employee concerns. An influx of new freelancer staffers may be unsettling to your full-time employees, who might worry that the company is planning to eliminate positions and backfill them with what they perceive to be cheaper contracted labor. There may be concerns that company culture will go by the wayside if less-invested contract workers participate (or don’t) in the workplace. Reassurances that freelance positions supplement — not supplant — current full-time roles, and that the workplace culture is a priority, can go a long way in assuaging these common concerns.

Of course, keeping an open dialogue with your freelance talent is a best practice as well. While many workers are committed to the freelance lifestyle, it can’t hurt to touch base periodically with especially valuable contract workers. 

“Some freelancers want to be freelance; other freelancers are filling in gaps while looking for full-time work,” Milligan said. “When the company is hiring, let your freelancers know about your open positions, just like you [would with] your traditional employees.” If your favorite freelancer is looking for a full-time position, it can be a win-win: They get a nine-to-five job with benefits at a place where they know the work and the workforce, and the company gets an experienced worker they know can do the job. 

3. Know when to make them part of the team...

Freelancers’ services can be in high demand, so experts said that showing freelancers that their work is valued — and even more critically, that they are considered a key part of the team — is essential for the most productive relationships. Fully incorporating freelance staffers with core full-time employees is critical for morale, too, as well as the all-important creation of company culture. To accomplish this, treat freelancers the way you would other long-term workers. 

“HR professionals should consider an onboarding process for freelancers that involves not just the details of the project they’re working on, but also information about the company’s mission, values, communication protocols, and culture,” advised Elledge. “This knowledge can help them see beyond their immediate tasks to enable them to make suggestions on how to improve the process or project outcomes. 

“Managers and employees can often overlook the needs of freelancers in regard to information, relationships, company events, regular communication, [and more],” she continued. “This can impact the quality of the freelancer's work and commitment to the company.” 

Elledge recommended regular one-on-one meetings between the freelancer and the staff member supervising them to keep everyone on the same page when it comes to budgets, progress, and deadlines. One-on-ones have the additional benefit of providing freelancers with a dedicated time to check in with their main company contact. These meetings can also be used by the supervisor to strategize with the freelancer, share praise and positive feedback, or even provide some real-time coaching. And while traditional benefits are reserved for in-house employees, experts said that including freelance staff in social events or extending workplace perks to them that full-time staff members have access to, like company-paid lunches, can keep them from feeling siloed or like second-tier team members.

4. …and when not to.

But, experts cautioned, it’s important to remember that freelancers are not full-time employees — and that legally and practically, there are critical distinctions. Employers that hire freelance workers but treat them as employees by dictating their hours or their work processes are subject to lawsuits, fines, and other ramifications. The legal standing of freelance employees is always in flux: The fight this summer over California’s Proposition 22 that would have reclassified thousands of independent contractors as employees is a high-profile example, which only underscores how essential it is to consult your state and local regulations on the most up-to-date rules and requirements for employing freelance workers. 

But while individual circumstances may vary (and should be vetted by your legal team), the rule of thumb is that while the employer is able to control what they ask for from their freelancers and when they need it by, they shouldn’t put any strictures on how and where the work is completed. 

“There are many best practices to ensure freelancers are legally considered a contractor — things like allowing them to select their own work hours and location and use their own equipment, and managing them around the 'what,’ not the ‘how,’” Elledge explained. “In other words, manage them by the outcomes and results, and not by the process used to achieve those results.”

And don’t think that pushing the boundaries on what you ask of your freelancers will go unnoticed, Milligan warned. 

“Freelancers talk to each other!” she said. “Companies that treat their freelancers poorly will start to notice their talent pool dwindling.” 

The shifting demands of the modern workplace have made freelancing more attractive than ever for many workers — and smart HR departments need to figure out how to make the Freelance Revolution work for them. Organizations willing to seek out and reward top contract talent with the flexibility and compensation they demand will be able to reap the benefits of a mobile, dedicated workforce that can be shaped to company needs — a major advantage as they create a nimble, responsive business. 

“As we've learned over the past 18 months, it doesn't take much to create a 'new normal,’” Milligan said. “Freelancing work is on an upward swing and will only continue to grow.”