The Rise of the Freelance Economy: HR’s New Responsibility

The way that businesses fundamentally operate is evolving, and HR needs to adapt. For example, companies are increasingly leveraging freelancers, consultants and independent contractors. These professionals offer specialized knowledge and a fresh perspective crucial for completing key projects.

According to Shai-Lee Spigelman, the general manager of Fiverr Pro, this shift toward a more “organic” organizational structure allows companies to maintain a streamlined core of full-time employees supplemented by a flexible workforce.

During an episode of HRMorning‘s podcast “Voices of HR,” she discussed the opportunities and the challenges this poses for HR.

“Your talent can be from a different time zone and they can work while you sleep, or you can increase or decrease your workforce so you can focus on a specific project. But you can also [find new] ways to deal with skill gaps [by consulting] specific expertise you may not have in-house,” she said. “More and more businesses are hiring freelancers in different capacities [for] specific projects or ongoing projects. … Now this is a huge challenge for businesses, and especially traditional businesses that used to have only full-time employees, and now they wake up this morning and have [a different] kind of workforce.”

Embracing the Freelance Revolution

Research by Fiverr found that 78% of businesses around the world are likely to hire freelancers in the near future to fill talent gaps. Spigelman highlighted the demand for generative AI expertise, noting that many organizations don’t yet have an in-house expert in this area.

As a result, HR leaders will need to develop effective strategies to recruit, screen and manage this valuable external workforce, such as:

• Establishing a Chief Freelance Officer position. Managing the complex ecosystem of independent contractor and consulting talent is a significant responsibility for an HR staff. A new C-suite role dedicated to overseeing all aspects of the freelance workforce could be beneficial. “It could be under HR or supporting HR, but this is someone who can look end-to-end on the entire workforce, including freelancers and contractors, and how to make sure that it’s all aligned in an integrated way to help the business grow and accelerate,” Spigelman suggested.
• Developing best practices for managing freelancers. HR must establish clear procedures for vetting the experience and skills of freelancers, onboarding them, compensating them, and integrating them with the full-time staff without inadvertently creating an employee relationship, which can lead to legal complications.
• Staying on top of compliance. HR needs to stay aware of the various tax implications of using freelancers and ensure the company adheres to the Fair Labor Standards Act and all other applicable labor laws.