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.
How innovation is transforming government
According to Washington Technology’s Top 100 list, Leidos is the largest IT provider to the government. But as Lieutenant General William J. Bender explains, “that barely scratches the surface” of the company’s portfolio and drive for innovation.
Bender, who spent three and a half decades in the military, including a stint as the U.S. Air Force’s Chief Information Officer (CIO), has seen action in the field and in technology during that time, and it runs in the family. Bender’s son is an F-16 instructor pilot. So it stands to reason Bender Senior intends to ensure a thriving technological base for the U.S. Air Force. “What we’re really doing here is transforming the federal government from the industrial age into the information age and doing it hand-in-hand with industry,” he says.
The significant changes that have taken place in the wider technology world are precisely the capabilities Leidos is trying to pilot the U.S. Air Force through. It boils down to developing cyberspace as a new domain of battle, globally connected and constantly challenged by the threat of cybersecurity attacks.
“We recognize the importance of the U.S. Air Force’s missions,” says Bender, “and making sure they achieve those missions. We sit side-by-side with the air combat command, intelligence surveillance, and reconnaissance infrastructure across the Air Force. There are multiple large programs where the Air Force is partnering with Leidos to ensure their mission is successfully accomplished 24/7/365. In this company, we’re all in on making sure there’s no drop in capability.”
That partnership relies on a shared understanding of delivering successful national security outcomes, really understanding the mission at hand, and Leidos’ long-standing relationship of over 50 years with the federal government.
To look at where technology is going, Bender thinks it is important to look back at the last 10 to 15 years. “What we’ve seen is a complete shift in how technology gets developed,” he says. “It used to be that the government invested aggressively in research and development, and some of those technologies, once they were launched in a military context, would find their way into the commercial space. That has shifted almost a hundred percent now, where the bulk of the research and development dollars and the development of tech-explicit technologies takes place in the commercial sector.”
“There’s a long-standing desire to adopt commercial technology into defense applications, but it’s had a hard time crossing the ‘valley of death’ [government slang for commercial technologies and partnerships that fail to effectively transition into government missions]. Increasingly we’re able to do that. We need to look at open architectures and open systems for a true plug-and-play capability. Instead of buying it now and trying to guess what it’s going to be used for 12 years from now, it should be evolving iteratively.”