Using freelancers may not be as cheap as you think

Using freelancers may not be as cheap as you think

Freelancing is all the rage in the gig economy. It has been further fueled by the resetting of working norms during the Covid-19 pandemic which made work from home, or WFH, an acceptable part of work. Though the lockdowns and restrictions on movement have substantially eased since, what started as work from home seems to have settled down as a permanent feature, in the form of virtual work.

Employers and workers are getting together in numbers greater than ever before, for the purpose of freelance work. The engagement is usually specific to an assignment, after which they are free to go their respective ways. They come together either through directly contacting each other or through the many platforms that have emerged as facilitators of freelance work, such as Freelancer.com, Fiverr.com, and Upwork.com.

A future workplace report published by Upwork in 2021 found that more than 70% of the companies surveyed by them planned to either stay at extant levels or increase their efforts at hiring freelancers to work for the company.

As an established outsourcing provider, oWorkers tracks developments in the freelancing world. oWorkers provides a credible solution to companies looking for creative, reliable, inexpensive ways of working, and takes on projects in various areas. In its chosen space of data-based BPO services, it is now recognized as one of the top three providers in the world.

 

Benefits

If the trend has caught on, it must be driven by some underlying benefits that accrue to either the freelancers, people and companies who hire them, or both.

For freelancers

By choosing to work as freelancers, people seem to be making a statement of taking their life into their own hands, after decades of messaging in the media about seeming exploitation at the hands of large corporations. Many are rejecting the idea of sacrificing themselves in pursuit of putting together a nest egg based on which they can have fun in old age. They are choosing to have fun today, while still trying to create a nest egg for old age. Through freelancing, they can work at the pace they choose, and provide time for the other important things in their life, which could be hobbies, greater involvement with the lives of their young children, or any other.

For employers

Freelancing sets employers free from the need to find constant work for their employees since they are anyway being paid a salary. Sometimes work is created so that they do not sit idle. Looked at from another angle, with freelancing, they get resources when they have work, and not otherwise, which results in cost savings, as they do not need to pay salaries even when there is no material work to be done. In addition, the freelancers are likely to be experts in their craft as that is the one skill, or set of skills, they have been offering to clients again and again. As opposed to in-house resources, who tend to become generalists, and develop limited skills in their field. Moreover, freelancers also get wider exposure as they solve the problems of different clients and learn to apply their skills better.

The above notwithstanding, a company looking for a processing solution can get a lot more with a partner like oWorkers. For example, it has pursued a policy of working with a multinational and multicultural, employed team. A direct benefit that has emanated from a consistent adherence to the policy is the development of a multilingual team. oWorkers can support client requirements n over 20 languages. No freelancer can do that.

 

What lies beneath – the downside

While these benefits are understood, there are many limitations of freelancing that employers often fail to appreciate, leading to dissatisfaction and ineffectual performance.

While freelancing certainly creates opportunities on both sides, companies would be well advised to take a minute to understand the downsides as well, before they do jump onto the bandwagon.

There are many moving parts in a company

A company operates in a dynamic, competitive environment. It has to manage a multitude of moving parts, all together, to give itself a reasonable chance of success.

Full-time employees are sensitive to changing requirements. They understand that the long-term success of their employer is beneficial for their long-term well-being and display flexibility in accommodating them. This enables the company to operate as a cohesive unit and in a better position to deliver to client requirements.

A freelancer comes with a limited perspective; the successful completion of his/her assigned task. Perhaps justifiably so, as it is quite likely that his/her compensation is based on it. Hence, if the sensitivity to changing circumstances means compromising on the commercials, it is an unlikely accommodation, giving rise to the possibility of dissonance within the organization. Moreover, if freelancers are permitted greater leeway, it could cause friction amongst employed staff members.

Thanks to its leadership team, which has several decades of hands-on experience in the industry, oWorkers has been able to keep the various moving parts of every client’s business moving in tandem.

Access to limited talent pools

Companies thrive on identifying and developing talent, as people are a key resource. They are able to access freelancing talent through many standard channels such as freelancing marketplaces, job boards, and talent consultants. It has been found by many companies that the talent available on job boards and freelancing sites are often similar. Choosing a freelancing option to hire does not give them access to any newer or richer vein of talent for their work. Many people looking for jobs could also be the ones looking for freelancing work.

A partner like oWorkers prides itself on its access to talent. By contracting with them, not only will a company get access to another source of talent, in a new geography, it will not have to make any effort in attracting it too. The position oWorkers occupies, as a preferred employer, in each of the geographies it delivers services from, provides it with an unparalleled pipeline of walk-in talent. This not only saves money, as they do not need to advertise to attract talent but also facilitates the identification of the best resources for their various client projects.

Infrastructure does not change

Freelancers are required to operate within the confines of the infrastructure that a company has created for its work, be it physical space, be it technology, or be it other experts. The extent that these were limiting factors for the company, does not change. A freelancer does not bring any newer infrastructure or technology or resources with him/her. What he does bring is his/her ability, skills and knowledge, and the desire to do a good job.

In fact, on account of freelancers relying on their own private resources such as laptops and network connections, in many cases, they may not even have a setup that could be considered optimum for the task.

With oWorkers, a client gets access to infrastructure that includes not only the physical facilities but often also technologies that will create efficiency in their business processes. Each employee is provided with the tools and technologies that will enable him/her to provide optimum efficiency and quality to the client. oWorkers provides cutting-edge technology owing to the partnerships it has nurtured over many years with leading technology companies.

Task versus responsibility

With freelancers, the responsibility of managing them continues with the employer. The freelancer is almost like another employee, with the contractual terms being different. Whether hours are being clocked, and whether work is being done timely, needs to be managed at the individual freelancer’s level, and there could be many of them operating for the company at the same time. This could create management overhead and cost.

When oWorkers gets into the picture, the task management responsibility shifts to them. The engagement level is contractual, with all the different tasks and responsibilities under it being managed by oWorkers on a day-to-day basis or as required. It provides periodic dashboards to clients to ensure they are aware of the progress of their assigned business processes, without the need to manage them on a task or day-to-day basis.

Frequent transactions

Each freelancer is unique. He/she is perhaps good at the job, but not much more. From the freelancer’s perspective, this is the way it is supposed to be.

For the employer, it means that hiring transactions are frequent, probably many more than the transactions for hiring permanent employees, since permanent employees are expected to stay longer and perform a variety of different roles, as required by the company. The costs add up quickly and could offset the financial gains of working with freelancers.

Though it might rely on freelancers occasionally, oWorkers follows a policy of working with employed staff. This gives permanence to the staff and enables the building of skills that benefit client delivery. oWorkers is also able to cater to sudden, unplanned requirements of resources, again thanks to its position in the local community. It has been able to hire over a hundred additional resources within 48 hours on several occasions.

Uncertain outcome

There is an ever-present risk of being left high and dry by a non-serious or uncommitted freelancer. Though the company would take the hiring decision only after verifying the antecedents and perhaps references, the risk of a sudden abandonment never goes away. The reason could be that the freelancer has got a much more lucrative offer, or personal developments make it impossible to continue with the assignment. There are no backups available. The reason freelancing is lucrative for a company, that is works out cheaper, could work against it here. The eventual financial benefit to a freelancer from an assignment is always limited, unlike in employment, where a lifelong career could be at stake. Hence, it is easier to abandon an assignment as compared to either full-time employees or an outsourcing partner. Who knows, one freelancer might even be handling multiple assignments at the same time. At some point, he/she could choose to just focus on the one they like or is more remunerative and abandon the rest.

oWorkers operates as an extension of the client. It has the people and processes and systems to be in a position to offer 24×7 support. It means that for the contracted processes, it has multiple resources that can execute, else a 24×7 coverage would not be possible. And it has significant business investment and goodwill at stake, which they are unlikely to jeopardize for one assignment or even one client.

 

In conclusion

Outsourcing to a competent partner is equivalent to creating a branch or unit of your business. It could be in close proximity, or thousands of miles away, depending on the need of the business processes as well as the terms available.

While there is a fair number of freelancers who operate in this manner as a choice, there also seems to be a large number who bid for freelancing opportunities while they look for a more permanent role elsewhere. After all, the benefits one might get as an employee, such as retiral contributions, assistance with taxation, insurance, etc. are not available when one is a freelancer, and one needs to handle all the various compliance requirements individually or take assistance from consultants. It is a cost and a demand on time.

Results are mixed. While there are many companies who are happy with their decision to freelance certain roles, there seems to be at least an equal number who are unhappy, for one or more of the reasons above.

Cheaper resources for an assignment might cost the company a whole lot more in the long run. It is better to consider and evaluate the options available. Outsourcing is an option that can deliver many of the same benefits and substantially reduce the risks present in freelancing.

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