Freelance labor has become part of most employers' labor strategy. But managing it well is a different challenge.

Everyone is focused on understanding the "gig economy" and its impacts on how work gets done. There are so many nuances and, as such, those who understand the current labor environment along with the future of work, and successfully adapt, will find and maximize ways to take advantage of trends in the market.

The labor evolution has the potential to positively impact both worker and employer. Workers are interested in leveraging their skills and avoiding activities not related to those skills. Workers want to market and execute the work they want to do, when they want to do it, and how they want to do it.

In ADP's 2018 The Evolution of Work study, 80 percent of North American workers surveyed were "eager or excited" about defining their own work schedule based on what is convenient and effective for the worker, and 81 percent showed positive emotional responses to the trend of workers choosing to work on things of personal interests and things that impact society. In some ways, this defies traditional employment and the mantra of "doing whatever needs to be done".

Conversely, employers are continually working to reduce costs, staff at the perfect levels of workload (no idle time), and get work done quickly, with a high degree of quality and by expert talent. So, this sounds like a winning combination.

Full-time employment is in no danger here, but the trend of leveraging freelance labor is real. Fifty-five percent of respondents to ADP's survey showed positive emotional responses to the trend of employers shifting exclusively to contract workers. This was inclusive of both employees and employers, but highlights a shift from traditional thinking. The study also illustrated that most respondents (88 percent) feel this trend toward contract workers is being realized now or will be in the future.

ADP recently acquired WorkMarket, an innovative company that provides an "FMS," or Freelance Management System to clients. This acquisition was rooted in the phenomenon known as the "gig economy." WorkMarket, an ADP Company, has brilliant associates who are enabling employers and workers to both benefit from the gig economy.

Most organizations are already leveraging a material level of freelance or contingent labor, in place of traditional full-time employees. What is cool about this is simultaneously, while organizations are evaluating the benefits of leveraging freelance labor, there is a growing desire among the labor force to do freelance work. This is incredibly interesting as it feels like a great alignment opportunity, maybe similar to the industrial revolution.

If This is Good for Employers and for Workers, What is the Challenge?

Traditional HR platforms are not designed to help employers manage freelance workers and how the work gets done. Today, department managers keep their own lists of contractors, often in a spreadsheet. Employers don't typically have a good singular view of this talent pool, and thus, also have some exposure tied to credentials, background checks, and other items critical to internal company compliance.

Also, there is the finance aspect of it. Many organizations don't have a good view in to the cost of this labor category, and whether they are getting the best quality work for the best rates. Lastly, it is not easy to market a freelance opportunity, engage with qualified talent, award the opportunity, track the completion, and then compensate in a timely fashion.

As with any challenge, this opened the window for the innovators at WorkMarket to create a solution that helps employers organize, manage, and pay freelance workers according to their company rules. The solution offers the ability to organize freelance labor into what are called labor clouds or pools of labor with specific characteristics. From there tasks can be marketed to only those who qualify based on a rules-based approach. The task is then marketed via mobile app, and freelancers can review and accept the task and terms immediately.

Once the task is completed, it is documented through the system. The freelancer then has options to be paid on typical accounts payable terms, or elect a faster payment schedule. The system provides the opportunity to input quality ratings on the work, much like those found on Amazon.com or UBER. By using this singular system to organize and engag freelancers in the completion of work, HR and finance leaders have a full view into this labor category. This empowers them to report on and better understand how successful their freelance labor strategy is.

Freelance labor and the gig economy are here. They're critical elements of the future of work. As such, this labor group should be as visible and transparent to finance and HR as full-time employee populations are. It is clear that freelance labor has become part of most, if not all, employers' labor strategy - and is likely to grow. Now employers need to focus on how to better manage it. After all, there was a time when most employers managed HR data for their full time employees in spreadsheets. Nothing stays the same.

Tags: Trends and Innovation Workforce Planning People Management and Growth HR Administration and Outsourcing