Freelance is starting to compete with traditional forms of employment. So, for 2023, 55% of customers of such services are businesses, and another 25% of companies plan to use them. As for the earnings of the freelancers, in October 2023, their average monthly income reached 49.5 thousand rubles, which is 63% higher than in 2022. Let’s figure out why it is profitable for international business to use freelance services.
Why is freelancing a global trend?
The market decides. Obviously, the reasons for the popularity of freelancing are much deeper than the convenience of working from home. Today, the fourth industrial revolution (Industry 4.0) is taking place in the world, its feature is “synergy and convergence of large-scale technologies.” This changes significantly the nature of the business environment and affects human resources management. Freelance is an advanced consequence of the market, so more companies are resorting to this type of service.
VUCA-world. You can see that the concept of life and progress is changing. We live in a VUCA world. This term is an acronym of English words: volatility, uncertainty, complexity and ambiguity. Indeed, there is a sharp change in economic courses, specialists are required for short-term cooperation, since it is not always possible to provide full-fledged jobs. It is more profitable for companies to work with freelancers, because concluding an agreement takes less time and resources than a full-fledged hiring of staff.
International experts are always appreciated. The global economy is blurring state borders, making the labor market truly international. One of the obvious consequences of this state of affairs is the desire to find workers in less developed countries. For example, in India, the turnover of the freelance market is expected to grow to $25 billion by 2025, while 60% of specialists are young Hindus under 30 years old. The reason is the relatively cheap labor used by wealthy Western countries (for example, the United States and the United Kingdom). HR, IT, design and finance are highly valued.
Searching for employees becomes easy. Applications appear that help search for workers for one-time and simple tasks – on-demand apps. In Russia, this is YouDo, Profi.ru, and in the world market there are Uber, and Fiverr. The concept of such applications gave rise to the creation of freelance platforms such as Upwork, freelancer.com, etc. Of course, Uber is significantly different from Upwork, since in the latter the tasks concern highly qualified labor associated with digital professions. But the principle of freelance platforms is similar to on-demand apps: the customer user publishes the task and selects the performer based on proposals.
Working with freelancers is simply cheaper. For example, it is more expensive to maintain a design team than to outsource tasks to the same freelancer. The EvroDev team found out that in Russia and Europe, the employer pays 30% of the employee’s salary to the state in the form of mandatory taxes and contributions. If the company works with the project executor, then the need to pay insurance premiums for him disappears, because he is not an employee. In our country, after the introduction of self-employed status, it has become much easier and safer to cooperate with performers, because the responsibility for paying taxes is transferred to the contractor.
Trends in the development of international teams on freelance
It is worth noting that the method of labor management is changing. Companies are heading for an active search for talents and the humanization of HR practices, where the basis of the paradigm is “company as a family.” In such a system, it is believed that a good worker is a healthy and happy worker. It seems that any company wants to make its employee happy, doesn’t it? In fact, Generation Z is entering the labor market, which is extremely demanding of labor conditions and comfort in the workplace.
As the business environment changes, so does the organization’s model. Flexible companies are becoming more common, in particular cross-functional teams and heterarchical structures. There, each team is a separate group of specialists of different profiles, while all participants work on a common task. Thus, the stake in modern conditions is placed on the team, and not on a specific specialist.
This, by the way, is reflected in the latest study – Deloitte 2023 Global Human Capital Trends, which provides the results of a survey of 10 thousand professionals in the field of personnel management.
“We allow teams to try new things, make mistakes, gain experience and move on. As a result, we received many new undertakings and strategies, respondent Olesya Azevendo, Chief Human Resources Officer at AdventHealth, says.
The attitude is changing not only towards employees and the organization of teams, but also towards physical locations. Previously, the core of the company was traditionally an office, but today the physical place of work is a place for cooperation and association. The office was important as the only access to the company’s data. However, thanks to digitalization, any employee from any place in the world can gain secure access to data. For Generation Z, which is used to living in a close intersection of the digital and real worlds, an adaptive multi-level office is the norm and standard expectation.
Together with the role of the employee, the role of the HR specialist also changes. HR managers now do not manage personnel, but help solve business problems and achieve goals. In particular, a marketing function is also added to the staff management function. The HR department now needs to captivate applicants, make them a valuable offer and tie a person to the company even before he receives an offer.
Challenges in managing freelancers and remote teams
The HR specialist always faces the task: “How and where to find such an employee who would fully fit the rest of the team?” Although this wording allows you to describe generally the essence of HR’s work in the company, it does not pay due attention to additional issues related to the operating side of hiring.
First, working with a remote specialist (not important, an employee or temporary executor on a project) can cause payment problems. If the company is not in Russia, then sending money to a remote contractor will be difficult due to sanctions. Although some banks allow you to send money in foreign currency or in cryptocurrency, the company needs to report for such expenses to the tax office. It is difficult to obtain closing documents for cross-border transfers.
Secondly, there is an issue of communication. The HR specialist needs to decide how to help team to communicate at distance, and to help everyone to feel valuable and involved. It should be noted that the inclusiveness in life of the company means more, than presence at meetings with the camera. The employee needs to understand the purposes and tasks of business and to share them.
Thirdly, during the work with removed performers there is a question: what information volume should be shared with the performer to provide him enough information for performance of a task? Though that team leader in whose team the help is required will work with the freelancer most often, HR should develop process where any team leader can interact safely with the removed performer.
How to increase inclusion in remote international teams
As for communication and inclusion of the employee, there are some tips.
In order to manage the staff effectively, it is necessary, first of all, to know the employees. Obviously, this may not be easy if we are talking about medium and large businesses, where the number of employees exceeds 100 people. To do this, there are convenient HR tools – surveys that allow you to collect data and interpret it correctly for further decision-making. You can use the Gallup Q12 questionnaire to assess employee engagement. It was developed at Gallup, the oldest international public opinion institute. As a result of many years of testing and volumetric sampling, a list of questions was identified for the most accurate assessment of the most important elements of personnel involvement. The questionnaire asks you to answer 12 questions.
- Do I have all the necessary equipment and materials to do my job?
- Does my company have someone who supports my professional development?
- Is my opinion taken into account in decisions that affect my work?
- Do I receive recognition and encouragement for doing a good job?
- Is there someone on my team who really cares about my wellbeing?
- In my company, do colleagues strive for high-quality work?
- Do my direct leaders support my development?
- Do I have the opportunity to do a job that I’m good at?
- Do I feel attached to our company’s mission?
- Do I feel like my work achievements matter?
- Do I have a friend at work who supports me in the effort?
- Does my company value work-life balance?
The impact of employee engagement on the organization is measured in numbers. Productivity is 21% higher in companies where engagement is high and turnover is 87% lower. In addition, the likelihood of self-realization is 64% higher, and profit is 22% more.
An employee’s involvement in a company depends directly on the company’s involvement in the employee. There should be human relations between them that will show the employee that he is important and appreciated by the team and bosses. To do this, you should conduct surveys that allow employees to receive feedback.
Gallup Clifton Strengths is suitable for this. In the test, all qualities are divided into 4 domains: Executive, Influencer, Relationship Building, Strategic Thinking. As a result of passing the test, a person will be able to identify 5 dominant talents, which are a source of strength for him. They should be invested in the basis of career decisions and the future path. To offer to pass such a survey to an employee means to show a real interest in his development.
In a remote team environment, it is also important to develop and use emotional intelligence. Sensitivity and interest should be shown primarily to managers. Emotional intelligence is a key factor in effective remote team management. The ability to read and manage emotions in the work team affects significantly the involvement of the team.
Freelance globalization is a trend worth paying close attention to. With competent interaction with remote employees, work in the company will become really international.
By Yulia Bataltseva, Marketing Director, EasyStaff