With all the recent talk of the new on-demand economy, you could be forgiven for believing that the notion of a freelance workforce emerged in just the last few years. But before the term became hotly branded by Silicon Valley start-ups like Uber, TaskRabbit, Airbnb, Instacart and others, on-demand work was a given in some industries. A look back into our nation’s not-so-distant farming past reveals a history of seasonal employees and migrant workers who were brought on to help with harvests.
Peaks and valleys in the needs of the labor pool—and the employment strategies that address them—are nothing new, but today we’re seeing them occur at much more rapid intervals and across a wider swath of industries than ever before. This trend is revolutionizing the way businesses work, and because businesses are evolving so quickly, it means that managers have to adapt on the fly, too, running distributed teams with an accordion-like flexibility while still achieving their goals and moving their companies forward.
At Replicon, managing freelancers’ time is our business, so if you’re a manager running a team or a business leader already knee-deep in the complexities of the on-demand economy, consider this your primer for what to keep in mind as you tackle today’s new definition of teamwork.
1. Set Up Shop: Get Your Employee Classifications in Order
No matter what level of manager you are, understanding the laws that govern how freelancers and contract workers are to be classified and treated in the workplace is paramount. In fact, the government has even created a form, the SS-8, to help businesses determine how best to classify these employees. In the United States, this classification is determined through a series of laws and regulations. And though some companies might run fast and loose with regulations in the spirit of disruption, a manager or business leader needs to remember that these laws were created for a reason: to make sure all workers are treated fairly and properly protected.
To that end, our advice is to take the moral high ground and remember that real-life people are impacted by the decisions you make and by the way a company classifies its employees. So do your best to live up to not only the letter of the law but also the spirit of the law. The rules and regulations apply to everyone, and that means they apply to you too. So spend time reading, researching and understanding what the law is asking you to do. In this way, you’ll set the right ground rules with your freelance staff from day 1 and avoid any legal landmines over the course of business.
2. Know Your Rights: Understand the Laws that Govern Freelance Work
Understanding the law is one thing, but keeping up with ever-changing laws and regulations is another. Federal, state and local laws can all present challenges to running a successful team, because not only are these laws constantly changing, but also they can often change in different ways with respect to one another. In order to prepare for a shifting ground game in which you can’t control the rules, it’s important to have a working knowledge of the issues that may apply to your company or workforce.
For example, when cities such as San Francisco and Seattle pass living-wage acts, the suburbs outside the cities may not have that same living-wage distinction. So if you are a small business with a distributed team or a franchise owner with 20 locations across localities, you’ll be operating in a very complex environment in which the employment rules in one of your towns may be at odds with the rules of another. Understanding these different laws and staying on top of changes will be crucial. Some of the most important laws to stay abreast of on the federal level are the following:
- Wages and the Fair Labor Standards Act (FLSA)
- Davis-Bacon and Related Acts
- Classification of Independent Contractors vs. Employees
- Affordable Care Act
In addition, each state and locality has its own rules on top of federal laws. These include mandatory overtime compliance, mandatory paid time off, vacation-accrual policies and more. As you get to know the complexity of your environment, there are two important things to understand: first, these sophisticated regulations will most certainly change; and second, the systems you use to manage your workforce need to be equally sophisticated in order to help you adapt to those changes.
3. Don’t Leave Freelance Management in the Hands of Your Employees
One of the worst offenses you can make is putting the onus on your employees to operate within your company’s legal constraints. For example, when the Affordable Care Act first came out, Staples told all their store employees that if they worked for more than 30 hours two weeks in a row, they would be fired. Staples’ reasoning was that they didn’t have the systems in place to ensure that the store managers were creating schedules in compliance with the new company policy. Generally speaking, the ramifications of this kind of threat to employees leads to dissatisfaction in the workforce, creates challenges in attracting the right talent and puts a stain on the company’s brand, which can ultimately impact the bottom line. The lesson to be learned here is that companies—and you as a manager—should not put the onus of compliance on your employees. Instead, invest in the systems that help you manage this complexity in a way that is best for your business and workforce.
4. Finding the Right Fit for Project and Program Management
Choosing whom to hire as well as how best to manage their workload is another crucial decision for a manager. From operating in different time zones to seamlessly handing off parts of active projects, there are a number of challenges to managing a freelance workforce, but creating a framework for understanding the scope, timeline and budget for a project or program will help you increase efficiency and improve your hiring decisions.
In terms of hiring, managers typically bring on talent for two reasons. The first is when there is a specific project with a clear end point in mind. This kind of work comes with typical project management issues such as defining how much time will go toward the project, how much money is in the budget, etc. The second reason for bringing on talent is for ongoing program management. This is more about staffing up to accomplish regular, specific tasks that ladder up to an ongoing program. In both cases, understanding workflow, marking milestones and staying on budget are crucial to maximizing the impact on your business, all of which put extra pressure on a manager to keep everything in line. The best way to do this is to track efficiency. If you can measure the output of your workforce against the company’s milestones and budgets, you’ll be able to stay a step ahead.
Whether your company’s org chart is clearly defined or looks like an indecipherable matrix, we recommend setting up an internal system to manage freelancers. The key to this group is making sure that they are not siloed but rather understand the different parts of your business and how all their objectives align toward a goal. Think through how you will set up a reporting structure and instill accountability within your team of freelancers. Once your internal strategy is in place and operations, accountability and workflow have all been systematized, bringing on more freelancers will be a breeze.
5. Build Your Freelance Software Stack
Lastly, let’s explore important considerations to keep in mind when searching for the right software stack for running your team. When it comes to collaboration tools, there are plenty of options, but it’s essential that as you think through your project needs, you also consider the best ways to build collaboration, support and communication with a team that might span the country or even the globe.
And while there are some single-point solutions out there that are touted as a way to manage your all-in-one business and team needs, they are not panaceas for freelance management. Instead, we recommend finding a specialized solution for each of your business-critical needs that can go deeper and expertly serve each part of your workflow. Here’s a brief view of how to get started on building your freelance stack:
Countless products offer the ability for teams to interact and develop work alongside each other in the virtual realm. Selecting the right task-management system is sure to improve your productivity and accountability. But in order to find the solution with the lowest barriers to adoption, it’s important to test out solutions and get input from your teammates on their work styles and platform preferences. Some popular choices are industry-leader Basecamp, rising-star Asana and Trello.
When it comes to getting work done quickly and finding answers on the fly, chat has always been a powerful ally in the office. Gone are the days of AOL Instant Messenger, but in its place are highly robust platforms for managing, searching and organizing chat conversations for the benefit of managers everywhere. If you aren’t using Slack yet, be sure to check it out, and don’t forget favorites like HipChat and Yammer.
The cloud has taken over collaboration tool sets in recent years. Dropbox, Beyond Google Drive and Box are now the new standard bearers for best-in-class suites for professional sharing services. All these platforms offer various sizes and cost structures to best match your management and team needs.
Those are three key components to a freelance stack, but there are also several other segments to consider. For example, you might think through the use of a ticketing system like Zendesk or expense-reimbursement and management options like Concur or Expensify. And on the time-management front, for a system that will not only streamline your employees’ workload hours but also input and monitor the ever-changing landscape of rules and regulations governing freelance and contract workers, check out our solutions at Replicon.
Today’s complex world of managing a distributed on-demand workforce sometimes seems nearly impossible to navigate, but there are powerful resources and intelligent software systems available at the tap of a button that can help almost any business. We hope this has provided you with a good overview of how to build a freelance workforce that moves the needle on your bottom line while keeping you and your team as productive as possible.