To freelance or not to freelance?
In an eye-opening 2010 study about the trends and forces likely to shape the business landscape over the next decade, software giant Intuit predicted a growing movement toward a contingent workforce.
Contingent workers, according to Intuit, include freelancers, independent contractors, temps, part-time workers, and other specialists. Contingent workers don't have full-time employment status and generally are retained on a temporary basis.
Contingent workforce to grow
Based on its survey of businesses across the country, Intuit estimated that 20 to 35 percent of the US workforce was contingent in 2010 but said that a whopping 80 percent of large corporations planned to sharply increase their use of a flexible workforce over the coming decade. Intuit predicted that by 2020 contingent workers will make up more than 40 percent of the US workforce.
The use of freelancers is nothing new, of course, but it's a movement that clearly accelerated in the wake of the Great Recession, the disastrous economic slump that followed the financial crisis of 2007-2008.
Wholesale recession-related layoffs
Businesses hard hit by the recession were forced to lay off large numbers of their full-time staffers in order to weather the economic impact of the worst economic downturn since the Great Depression.
Afraid to commit to rehiring full-time workers against a backdrop of feeble recovery, many firms filled out holes in their staffing by contracting with freelancers who could help get the job done but didn't qualify for the benefits usually provided to full-time employees.
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Perhaps the most attractive feature of using freelancers is the cost savings most businesses can realize by doing so.
Although many companies pay their freelancers somewhat more per hour than full-time employees, they can avoid a number of other expenses and bookkeeping hassles that are required to retain full-time workers.
As previously mentioned, independent contractors don't receive benefits, which can be extremely costly to employers.
Businesses using freelancers also need not worry about paying workers comp insurance, state unemployment compensation insurance, or the employer's share of Medicare and Social Security taxes. Because many freelancers work off-site as telecommuters, employers can avoid expenses associated with providing office space and equipment.
Flexibility is a big plus
Among the other benefits associated with using freelancers, added flexibility is clearly one of the most attractive features.
A company can bring in a freelancer for a specific project with the understanding that the relationship will terminate with the successful completion of that project. This eliminates all the trauma, hassle, and expense that are associated with the firing or laying off of regular employees.
Generally speaking, freelancers act as independent contractors and thus forgo many of the rights that are normally provided to regular employees under state and federal law.
Freelancers have no right to receive overtime pay, state or federally mandated minimum wage, nor do they have the right to form a union.
Although independent contractors are protected by law from racial discrimination, they cannot sue for employment discrimination on the basis of gender, national origin, or religion. And they are not entitled to time off because of sickness in the family or the birth of a child.
What about the downside?
So much for the pros of hiring freelancers.
As pointed out in an article for Nolo.com by attorney Stephen Fishman, there are some disadvantages that ought to be considered before going the freelancer route.
Companies using freelancers generally have less direct control over how the workers complete a project for which they've been retained. The very nature of freelancing affords these independent contractors a degree of autonomy that is not enjoyed by a company's regular employees.
Because they are usually hired for the term of a specific project, freelancers come and go, which in and of itself can be somewhat disruptive.
Freelancers' levels of expertise and competence vary, which can result in a somewhat uneven work product over the long haul. And again, because of the temporary nature of their work arrangements, freelancers rarely develop any sense of loyalty to the companies who hire them on a temporary basis.
Intellectual property concerns
The copyright to a creative work -- article, book, or photograph, for example -- produced by a full-time employee in most circumstances automatically belongs to the worker's employer.
Intellectual property developed by a freelancer usually belongs to the freelancer unless a specific agreement transferring copyright ownership is negotiated. Employers using freelancers to produce such products should protect themselves by drawing up a contract governing the conveyance of copyright to the employer in such cases.
Unlike regular employees who are covered by workers' comp for on-the-job injuries they may sustain, freelancers are not covered. Thus, they may sue your company for injuries sustained during the performance of the work they do for you.
Each company must decide for itself whether using freelancers makes sense, given the business's unique goals and needs.
For their part, workers who decide to offer their services as independent contractors need to recognize that in so doing they'll be giving up much of the safety net that is afforded a company's regular employees.
This makes it especially important for them to spend time learning about the basics of financial management for freelancers.
About the author
Don Amerman is a freelance author who writes extensively about a wide array of business and personal finance topics.
Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.