Tapping into our greatest business resource - people

Callum Adamson at Distributed explores the contribution that freelancers can make business stability and productivity

 

Tech companies are facing sweeping layoffs amid what’s being predicted as the longest recession since records began.

 

In the past few weeks alone, we’ve seen another burst of announcements from tech giants like Microsoft, Klarna, Cazoo and more – showing that digital businesses aren’t immune to global economic turbulence. It’s no surprise then, that redundancy is one of the biggest worries for today’s workforce.  

 

Too often, business leaders are forced to make tough decisions about who to keep on or make redundant. But it doesn’t have to be that way. A crucial part of surviving future downturns relies on being less rigid with how they recruit and manage staff.

 

As the tech sector battles a yo-yo economy, it’s freelancers that represent an opportunity for businesses to engage a portion of the workforce that is on-demand, and could provide a crucial buffer at a time when forecasting resource requirements is so difficult.

 

Resilience in the face of recession

Avoiding big swings in headcount is not only kind on the company wallet, but to employees as well. Job security should come above all else, and seeing colleagues come and go will place seeds of doubt and erode trust for core retained staff.

 

Meanwhile, business leaders have to be nimble if they are to jump economic hurdles. Given recent events, most organisations already recognise this and are finding new ways to ensure they are agile enough to respond to economic turbulence. But this most often revolves around initiatives like hybrid working, and rarely extends to managing headcount itself.

 

The perennial mistake made by many organisations is an over-reliance on building and maintaining teams exclusively made up of permanent employees. It might look like growth, but only using retained staff limits an organisation’s ability to scale up and down quickly in response to market fluctuations. It leads to rash decisions like mass layoffs that ultimately result in high recruitment costs.

 

That’s not to say that having permanent, retained staff is not important for continuity and business knowledge, but they should be supplemented by an on-demand workforce made up freelancers that can be scaled up and down as required and line with market disruption, without needing to cut ties with valuable employees.

 

Embedding this flexibility into the workforce is vital for financial resilience, productivity and stability.

 

More than numbers

While it’s easy to think of flexible talent as just being extra staff on the proverbial shop floor, in reality, one of the biggest benefits for businesses is their consequent ability to harness multiple specialist skills as and when needed.

 

In the face of economic uncertainty, being able to adapt your company’s skillset alongside capacity creates resilience. This is especially true as customers face shallower pockets; meaning that being able to adapt and evolve the company’s ability to pursue specific projects with the right talent on board will better provide value to customers and build loyalty at a time when it’s needed most.  

 

Freelancers can play a vital role in this. With a roster of them on side, businesses can scale their workforces up and down as needed and with different skill combinations, depending on what their requirements are at any point in time. Doing so is a crucial competitive differentiator in a world where permanent talent is increasingly expensive.

 

Business sense and people sense

There’s been a stigma around tapping into flexible talent for years now – that it’s foolish to hire freelancers temporarily when you could offer someone a full-time position who works solely for the company. But times have changed, and the benefits of freelancing don’t just apply to organisations.

 

More people than ever are seeking independent careers, carving out their own path in a working style that suits them by taking the opportunity to freelance and work where and for who they want.

 

Even before the pandemic, Payoneer’s Global Gig Economy Index found that the UK had the second fastest growing freelancer market, behind only the US. Since then, further research shows that huge swathes of staff, often from the tech industry, are leaving permanent jobs in search of careers that will provide greater independence.

 

In fact, 11.2% of software developers were freelancing in 2021, up from 9.5% in 2020. In most cases, this encompasses a full shift from permanent to self-employment, but as the UK cost-of-living crisis continues, uptake of freelance careers will increase as professionals seek ‘side hustles’ to supplement full-time work.

 

Businesses choosing to regularly engage flexible talent not only minimise the risk of making mass layoffs but are making the path to independent careers stronger and more sustainable for those who choose to take it in place of traditional employment.

 

Hybrid and remote working is now an entrenched part of the employee experience. But until businesses find more flexible ways to recruit talent based on market demand, they will always be vulnerable to economic headwinds and risk being wrapped up in the next swathe of redundancies.

 

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Callum Adamson is CEO and Co-Founder of Distributed

 

Main image courtesy of iStockPhoto.com