Is Your Firm Prepared to Work With Freelancers?

Most organizations don't have any protocols for directing, supporting, or administering their work. Here are some freelancing best practices suggestions.

The Freelance Economy is starting to achieve maximum penetration. In the space where Graphite operates (investment banking, finance and consulting), freelance talent is being engaged on a regular basis by many of the same firms that have traditionally treated those roles as full time employment. Now, they're finding that using freelance talent gives them greater flexibility, competitive insight, and the ability to respond rapidly to dynamic changes.

Many organizations using freelance talent can also run into some friction points, though. Normally, the HR department takes care of things like on-boarding, internal employee disputes and disbursing pay checks. Managers don't have to focus on those housekeeping issues for regular employees. Freelance administration is a whole different matter.

With freelancers, most organizations don't have any protocols for directing, supporting, and overseeing the work of freelance projects on any consistent or disciplined basis. To get the best work from freelancers, a little advance thought and planning can maximize your chances for success. Here are some suggestions:

1. Develop some Best Practices for using freelancers at your firm. Identify the best resources or staffing platforms (such as Graphite) where you can find links to the kind of freelance talent you need. Outlining in advance the procedures for recruitment, contracting, dispute resolution, and payment can head off a lot of problems.
2. Make sure everyone on your team understands the benefits of bringing in freelancers. Oftentimes this is defined by such factors as easy access to specific expertise, faster deal closures, or the introduction of new ideas and methodologies into a project. To avoid grumbling, wariness or suspicion, give everyone involved with the project the opportunity to meet and chat with the freelancer as things get underway, and make sure to explain the value they're bringing to the team.
3. Provide a freelancer-friendly work environment. Having the flexibility to work where and when they want is why most freelancers have chosen that route. Yet many companies today still require work to be conducted on site. If there's a substantive reason for that, so be it. Otherwise, an agreement on milestones and due dates should be enough. Unless you offer a flexible work environment, you could be limiting your options to only local freelancers, and/or those who are willing to work out of your office.

One of the Best Practices your firm should implement is freelancer payment terms. Net 14 or even 7 days are preferable terms for independent workers.

1. Adjust your accounts payable policies to ensure that your freelancers are paid in a timely manner.  As independent contractors, freelancers are often paid slowly, just one more line in a stream of accounts payable to multiple vendors. Net 60-day payment terms for someone providing mission-critical, high level work for your company is a great way to alienate your freelancer. In most cases these are individuals, not large consulting firms that can absorb longer payment schedules. One of the Best Practices your firm should implement is freelancer payment terms. Net 14 or even 7 days are preferable terms for independent workers. At Graphite, we've recently enhanced our invoicing and payments system so freelancers can automatically get paid in a timely manner once their work products are approved by the client.

More and more of the best minds in finance and consulting are leaving the W2 world and moving to 1099 freelance/contractor status. Most surveyors are forecasting that freelancers could be 40% of the workforce by 2020.  The sooner you adapt your firm to freelancing best practices, the better off you’ll be in the coming years -- when much of the best talent will be freelance talent.