Time For HR To Manage The On-Demand Workforce

In many companies, freelancers are often the “hidden” workforce. The human resources (HR) team is not always involved in the hiring and management of freelancers. But as organizations shift to being project-based versus role-based, HR must take the lead in managing the on-demand workforce. We must rethink the role of HR in enabling the future of work.

I find there are five key areas that HR leaders should first focus on as they take the lead on managing the on-demand workforce.

Establish Hiring Practices

The HR team has the best expertise for hiring and engaging freelancers. Your recruiting resources are experts at sourcing and assessing talent — managers should be leveraging these recruiters to find the best freelance talent.

And just as your company has defined practices for hiring employees, hiring practices also must be defined for engaging freelancers and independent contractors. It’s just as critical when working with freelancers.

Set the minimum standards for what needs to be completed before a freelancer can be engaged for the first time. For example, specify that at least two interviewers should speak to the freelancer to assess qualifications and fit. Always require background and reference checks. Decide whether a non-disclosure agreement (NDA) is mandatory or define the conditions that trigger this requirement. Establish benchmarks for hourly rate ranges for the types of freelancers your company will most frequently engage.

Provide Internal Training

The HR department should also provide training for managers on best practices for working with freelancers and independent contractors. This training is important for boosting project success rates and ensuring that managers understand compliance requirements.

When working with freelancers and independent contractors, managers need to be aware of local, state, and federal regulations regarding engaging freelancers. For example, the IRS considers the behavioral control, financial control, and relationship of the parties when evaluating worker classification. Understanding the regulations is critical to ensure workers are not misclassified as freelancers instead of employees, which exposes your company to legal penalties and liabilities.

Standardize The Onboarding Process

It’s a best practice for companies to have standardized onboarding processes for their employees. The HR team should establish a standard onboarding process for freelancers and independent contractors. This process will be distinct from the employee onboarding process and reflect the different needs and requirements related to freelancers.

For example, rather than collecting a W-2 during onboarding, your company will need to collect a W-9 from U.S. freelancers or a W-8 from foreign freelancers. Your onboarding process should include all the essential documents for a freelance engagement, like an executed contract, NDA, etc. Onboarding should also include the critical “welcome” elements, such as information on any tools that the freelancer will need to access.

Standardizing the freelancer onboarding process ensures that all the essential documents are completed for every engagement and saves your company significant time.

Set Performance Evaluation Guidelines

Establishing performance evaluation processes and standards is a key element of any HR team’s responsibilities. Performance evaluations with on-demand workers are both similar and different from evaluating employees.

Performance assessments should be done on a project-by-project basis and should include a recommendation as to whether the worker should be considered for future projects. In addition to the project evaluations, the skill sets of each worker should also be tracked. Insights into skill sets help hiring managers source the best fit for upcoming projects from already vetted on-demand talent.

Determine Supporting Tools And Systems

Many companies manage their freelance engagements through a hodgepodge of tools. For example, some companies manage freelancers entirely manually, tracking information in various spreadsheets. Manual management of freelancers can become time-consuming and is prone to errors. And with an assortment of tools, it’s hard to have complete visibility of all freelancer and independent contractor activity and expenses.

The human resources team should take the lead on defining the central tool or system for the company, making it easy for finance, legal, HR, and line managers to collaborate and have complete visibility of on-demand workforce engagements. Freelance and vendor management systems, like the solutions my company offers, provide the integrated capabilities critical for on-demand workforce management.

With a central tool or system, you can more readily develop an external talent bench to support your company. An on-demand talent bench can help your company be much more agile as well as digitally ready.

Leading The Development Of The On-Demand Workforce

HR should be leading the sourcing and development of all talent, not just internal talent. HR leaders have the expertise and the right skills and resources on their teams to develop an on-demand workforce successfully. A blended talent strategy will supplement and complement internal teams. It’s time for HR to lead the transition to the future of work.

This article was originally published in Forbes.


Yolanda Lau is an experienced entrepreneurship consultant, advisor, and Forbes Contributor. She is also an educator, speaker, writer, and non-profit fundraiser.

Since 2010, she has been focused on preparing knowledge workers, educators, and students for the future of work.

Learn more about Yolanda here.


FlexTeam  is  a mission-based micro-consulting firm, co-founded by Yolanda Lau in 2015, that matches talented mid-career women with meaningful, challenging, temporally flexible, remote project-based work opportunities. FlexTeam’s clients are businesses of all sizes across all industries and sectors. FlexTeam’s most requested projects are competitor / market research, financial models, and investor decks. FlexTeam is also the team behind Liquid.

How (And Why) Companies Should Engage The Liquid Workforce

The rise of the liquid workforce is transforming how companies and people work together. Companies are learning that temporary, specialized workers — or what is increasingly known as “the liquid workforce” — can help them stay relevant in the rapidly evolving, project-based, digital landscape.

The Growing Liquid Workforce

You may have learned the term “liquid workforce” from Accenture in a 2016 report describing the growing trend of freelance workers in the marketplace. Since that report was published, the number of freelancers has continued to grow. A report from Upwork and Freelancers Union estimates that 57 million people worked freelance this year (an increase of 4 million since 2014) and contributed $1 trillion to America’s gross domestic product.

This increase has made it easier for companies to engage the liquid workforce and recognize their numerous benefits — including more flexibility, instant support for specific projects, on-demand access to expertise and reduced overhead and lower costs. Tapping into the liquid workforce allows businesses to be nimble by fluidly shifting their business as new challenges arise.

Who Makes Up The Liquid Workforce?

Freelance work is not a new concept. The vast majority of people in creative fields, such as entertainment and fine arts, have long operated as freelancers. For educated professional workers in fields such as IT, marketing and consulting, however, the normalization of working remotely has allowed more people to unchain themselves from traditional W-2 employment in favor of a more autonomous work life. Moreover, the current availability of online trainings and certifications allow freelancers to learn skills independently — making them appealing to traditional businesses that may only require that specific skill sets for a short period.

Freelancers today view their work as a long-term, intentional option, not simply a way to supplement income or recover after a job loss.

Why Use A Liquid Workforce?

Businesses are evolving faster than their full-time employees can keep up. By utilizing the on-demand liquid workforce, a business can assess a need and onboard a freelancer to address it more quickly than they could train up their own employee.

1. Specialized Skills

With the rise in talent-matching platforms, it’s become simpler to find the right on-demand workers. There are now platforms to hire software developers, business consultants, content writers, marketers, designers, accountants, lawyers and even salespeople. Once you’ve found the right worker and sign a contract agreeing to terms, they can start working ASAP. Moreover, with low unemployment rates, it’s often easier to find a freelancer for a short-term project than it is to fill a full-time role.

To find the right freelancers with the specialized skills you require, you must clearly define the project — including detailed proposed deliverables, qualifications and work experience required and payment. Highly experienced freelancers are busy and in demand, so make sure your project is compelling.

2. Reduced Cost

With companies increasingly shifting to project-based workflow, once a project is complete, the freelancer is released without any burdens on the corporation — no health benefits to pay, no pensions to guarantee. Without benefits or office space, companies can expect to save 30%–40% annually when working with freelancers versus employees. It’s easier to ramp up or pull back on spending on freelancers than it is with salaried employees.

To make it easy to activate your liquid workforce whenever your company needs project-based support, set up a standardized onboarding process for your freelancers. Automating onboarding will save you time and money, plus help avoid compliance risks.

3. Quality

Freelancers thrive on repeat work and repeat customers to stay in business. They aim to deliver top-notch work, every time, in order to maintain relationships. While employees know that a bad week likely won’t affect their pay, freelancers know that client contracts are always subject to renewal.

Every time you are considering hiring a new freelancer, make sure to review the freelancer’s past work and client ratings/testimonials. A quick interview helps you not only verify a match for the project but also align expectations. Consider engaging the freelancer for a smaller test project to thoroughly vet skill set and fit before commencing a critical project.

4. Agility

Freelancers see innovation as a part of their working method rather than just a buzzword. Generally, they’ve developed flexibility, the ability to make sense of uncertainty and complex ideas and an understanding of how to communicate new ideas and roll them out quickly.

To hire freelancers adept in agile methods and thinking, talk to them about their project management style. How do they communicate and collaborate with their clients? How do they self-assess their work?

5. Globalization

Working with the liquid workforce allows companies to find talent outside their geographical limits. Sometimes this means reduced costs. But it can also deliver insights into new markets. Using freelancers may open the door to growth while minimizing risk in case things don’t pan out.

When hiring freelancers internationally, make sure to assess mutual communication fit. This fit is more than language — you and your freelancer must be able to understand each other fully or this will become a hurdle that may cause project delays and rework, and potentially incur an additional cost. Communicate availability windows upfront to avoid causing project interruptions while the freelancer waits to hear back from you.

The Liquid Workforce

Contingent workers have become a critical resource for companies needing deep expertise or additional on-demand brainpower. The liquid workforce is becoming an increasingly valuable component to a talent acquisition strategy. As companies hope to compete in today’s global marketplace, they must learn to engage the liquid workforce or risk getting left behind. And it becomes increasingly important for organizations to use software like Liquid to manage contracts and payments for the liquid workforce. Companies that tap into resources for freelancer acquisition and freelancer management will decrease their costs and increase their revenue — helping companies stay ahead of their competitors.

This article was originally published in Forbes.


Yolanda Lau is an experienced entrepreneurship consultant, advisor, and Forbes Contributor. She is also an educator, speaker, writer, and non-profit fundraiser.

Since 2010, she has been focused on preparing knowledge workers, educators, and students for the future of work.

Learn more about Yolanda here.


FlexTeam  is  a mission-based micro-consulting firm, co-founded by Yolanda Lau in 2015, that matches talented mid-career women with meaningful, challenging, temporally flexible, remote project-based work opportunities. FlexTeam’s clients are businesses of all sizes across all industries and sectors. FlexTeam’s most requested projects are competitor / market research, financial models, and investor decks. FlexTeam is also the team behind Liquid.