Why Don’t Companies Hire More Freelancers?

The obstacle is actually a prejudice, and prejudice is defined as being “a preconceived opinion that is not based on reason.”

Managers with the authority to hire set aside the possibility of employing a freelancer because they somehow feel that a freelancer is a worker of lesser quality and capability. That statement alone shows the absurdity of the notion especially when the organization very likely hires – or worse, retains – lawyers, accountants and other such specialists on an as-needed basis. That on-demand, or as-needed, relationship means those individuals and those firms are not permanent employees of the hiring organization and yet, these are acceptable.

These external parties come in when you call them, when you want them, or otherwise they are working for other companies or for other people. How is that different from engaging a freelancer? When a freelancer is not working for you, they are doing exactly the same thing, and working for other companies or for other people.

The prejudice therefore, is that freelancers are less capable, somehow less professional, less desirable as workers simply because they are self-employed, but if they just signed a document and became full-time workers of the company, then they would suddenly be capable, professional and desirable. Again, the lack of logic in the hiring prejudice is obvious.

“The greatest obstacle to hiring freelancers is a purely mental or psychological one.”

If this prejudice did not exist and the organization is prepared to hire a freelancer, what would be the circumstances which would make such an engagement valuable if not, outrightly desirable?  Usually, it is because the organization does not internally have the skills which are needed, and thus, the skills need to be brought in from the outside. There is no choice and everyone is aware of that.

Consultant firms can be called in for this work – and they often are – but this is likely to be extremely costly by a factor of several times at least. Thus, for companies which don’t need to explain to their Board why an expensive, but renown, consultancy was not engaged, an individual ‘consultant’ is taken on.  That person, that individual ‘consultant’ is a freelancer.  Presented as a consultant instead, there seems to be less resistance to the concept but the basic premise, and even the person him/herself, is the same.

Another occasion when a freelancer might be desirable is when the hiring organization badly needs an extra pair of hands.  The company has the capability but it doesn’t have the manpower at that moment, to cover all the urgent work.  A freelancer is taken on, purely to bridge the gap until that time when the workload dissipates suciently that the primary workforce within the company can cope.  Technically, like the case when the needed skills are absent, this is a situation of desperation and thus, almost grudgingly, one freelancer (or more) is engaged.

“The organization is prepared to hire a freelancer... because the organization does not internally have the skills which are needed...”

What is starting to happen, however, is that companies are now being swayed by that biggest of motivators, the Quest for Greater Profit, to hire freelancers. Covid and the Fourth Industrial Revolution is causing a level of business uncertainty that business owners and leaders – whether from micro, small, medium enterprises or from MNCs – are realizing that hiring freelancers to undertake on-demand work is saving them money. Job roles are being broken down into a series of tasks and those tasks are being assigned to specialist, highly capable and professional freelancers. When the required task is complete, the freelancer is released from ‘employment’ and the company continues functioning but without the added cost of having taken on a full-time hire.

“... hiring freelancers to undertake on-demand work is saving them money.”

You have to love the fact that eventually, regard for the bottom line always drive change much faster than other forms of business logic.