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As an emerging business that wants to penetrate today’s competitive market, you would want employees that are dedicated and productive for your enterprise. In terms of employment, you have two options, going the traditional route and hiring full-time workers through a vigorous process or recruiting freelance workers.
However, there is a heated debate regarding whether hiring freelancers is truly the right choice or not. Statistics note that freelance workers are productive up to 87% of the workday, whereas regular employees are only productive about 60% of the time.
So is it truly worth it to go through the traditional hiring process, or do the perks of hiring freelancers outweigh it?
What Makes Freelancers So Productive?
In recent years, a vast majority of big names within various industries agree that the freelancer workforce places a huge part within their organization. This fact is not surprising considering that over 4.5 million Americans alone shifted to remote work in 2021, giving this huge shift a name of its own, the great resignation.
However, what makes freelancers so productive? Is it the flexibility or the high rates of earning? The answer is simple, both time and money are huge factors that play their role in increasing the productivity of freelancers.
Remote Work is Productive Work
A popular study conducted by Stanford University professor Nicholas Bloom in 2013, which involved 16,000 call-center employees, showed that remote working increases employee productivity by 10%.
In fact, 71% of freelancer workers said they value flexibility in working hours offered by remote work. Statistics show that 66% of freelancers agree that time flexibility and the ability to be their own boss plays a huge part in why they decide to become freelancer workers and have greater productivity.
Besides time and pay being huge factors in increased productivity, a survey filled by freelancer workers indicated that productivity was directly correlated to fewer distractions at home and no time spent during commuting, not to mention the money saved on commuting.
An IBM study also showed that freelancers were more engaged in their work than regular employees were. This was owed to the fact that freelancers cannot afford to be disengaged since their capacity to draw exciting and fruitful business rests on a reputation for vigorous participation in the project and a commitment to delivering a solid result in order to get further work and enhance their profile.
On the other hand, many studies conducted have pointed out that regular employees work with full concentration for about only 2 hours and 53 minutes. The Bureau of Labor Statistics reports that the typical American works 8.8 hours per day. This may even translate to spending 30% of their time at work.
However, a survey of over 2,000 full-time white-collar workers found that the majority of them spend most of their time at work, not actually working.
What Causes Unproductivity?
According to research, workplace distractions cost firms $600 billion a year, and remote employees are 35–40% more productive compared to their coworkers in offices.
Researchers affiliated with the University of California, Irvine carried out an investigation and found that an average employee is interrupted about every three minutes, and it takes approximately 23 minutes to refocus on the task given, proving the reason for this lack of productivity.
As many as 66% of employees agree that they would be more productive if they worked from home as this would remove distractions and reduce stress, therefore, increasing productivity. Besides distractions and stress affecting productivity, statistics have shown an average employee spends 4 hours preparing for meetings and attending them.
However, these meetings are not even necessary as 24 billion hours are wasted annually because on unproductive meetings.
Should Your Business Hire More Freelance Workers?
Let’s do the math to figure out how many hours is 87% of a productive workday. Assuming a freelancer would work 5 out of 7 days a week, and they complete a total of 8 hours a day, we would find that they are productive for almost 7 hours a day.
Besides what many may believe, many organizations, as a result of COVID-19, have re-evaluated what it means to hire a workforce to get the job done. The trend is now in favor of hiring freelance workers over regular employees.
However, a successful business looks beyond what is trendy and finds reasoning for adopting change. Rational decisions need to be made when considering hiring freelance workers for your business.
You would be surprised to know that as many as 70% of small business owners hire freelance workers and that more than 30% of Fortune 500 companies rely upon freelancers as their workforce.
This is because freelancer workers, especially in the fields of computer programming, marketing, IT, and business consulting, are highly skilled and make up about 50% of the freelance workforce in the US.
It is estimated that more than half of the United States workforce will shift to freelancing in the next six years. Moreover, it is anticipated that freelancing work will rise by 168% in the next decade or so. Hence, it is only a matter of time before every business will hire at least one freelance worker.
Why Has Hiring Freelancers Become Trendy?
The biggest reason for hiring more freelancer workers was seen in a poll, where 27% of hiring managers stated that cost-effectiveness was their top motivation for utilizing freelancers. In comparison, 24% stated it was simpler to locate talent using freelancers.
Furthermore, Harvard Business School and Boston Consulting Group (BCG) found that 40% of companies said that hiring highly competent freelancers aided in accelerating time to market, increasing efficiency, and fostering innovation.
Freelancers Vs. Employees: Pros & Cons
As stated previously, freelancing has become a booming business and has seen a great surge in the number of people opting to work as freelancers. In fact, according to recent research, 53 million Americans, or 34% of the employed workforce currently work as freelancers. This army of 53 million Americans contributes about 715 billion dollars annually to the economy.
However, is hiring freelancers a better choice than regular employees? We let the facts speak for themselves.
Pros of Hiring Freelancers
- When comparing the cost of hiring, either one of the two studies has shown a 20-30% saving when hiring a freelancer. This is because employers do not have to worry about providing retirement, Medicare, Social Security, and health insurance. Moreover, global reach with freelancing platforms is high. Hence, you can hire someone from another part of the world for half the cost of hiring within the country.
- If you hire someone as a freelancer, that individual is not entitled to the benefits that a regular employee would be subjected to, such as unemployment insurance. Moreover, they don’t have the right to hold you legally accountable for any loss that they may incur.
- The quality of work you get by hiring freelancers is much higher than what you would get from your regular employee. This accounted for high rates of productivity in independent workers.
- Availability is never an issue since the freelance market is overly saturated. There are always options to jump back to if you need to hire someone urgently for a project.
Cons of Hiring Freelancers
- If you were paying a freelancer by the hour, you would constantly need to provide supervision to ensure that work is being done on time. By the conclusion of each month, you would need to devote your time to reviewing freelancers’ work and answering any inquiries that may arise over time.
- Little to no information about the background and expertise of the freelancers can push back the time for completing the project. Freelancers tend to work alone and often are not in communication with the team. Hence, much time is spent communicating information that would otherwise be known.
- Lack of dedication on the freelancers’ end is a huge disadvantage to the business. Since freelancers take up multiple projects at once, they tend to be less dedicated to a single project, which can push back completion time.
Pros of Hiring Full-time Employees
- When hiring a full-time employee, you have the assurance that the person hired has relevant experience, which benefits your organization.
- Full-time employees are more open to collaborating with the team and asking questions. This allows for easy communication and completion of the task.
- Employees hired by you will always be available for tasks you need to assign. You do not have to wait for them to make time.
Cons of hiring a full-time employee:
- In the long term, it is cost-ineffective, as you would have to pay for benefits like health insurance on top of their pay and compensate for overtime work.
- Training of employees will be needed, which requires both time and resources resulting in more money spent.
- You will need to allocate resources each time an employee quits, first towards hiring and second towards training the new staff.
You will see that, for a variety of reasons, freelancing is currently the most common type of employment. However, your business might also need full-time employment to enjoy the advantages of in-house personnel.
People worldwide are growing increasingly enamored with freelancing, which is more than simply a method to make money. According to these figures, freelancing is well on its way to becoming a highly sought-after career option and building a pool of seasoned individuals who can help different businesses even during difficult economic times.