There are 4.8 million self-employed people working in the UK, IPSE reported in 2017.
The number of solo self-employed people – that is, freelancers, contractors or locum staff who are in business alone without employing other people – has grown by 34% since 2008.
These solo self-employed people contributed £271Bn to the UK economy in 2017. IPSE says that’s enough to fund the NHS twice-over, to give the number some context.
The point is, freelancers, contractors and locum staff are becoming a major element of the UK workforce. More than ever before.
And that means our old ways of hiring and managing those people are no longer fit for purpose.
How freelancer management used to work
If your business worked with freelancers, contractors or locums ten years ago, they were likely a tiny minority of your workforce. You relied on them when you had to, but most businesses pushed hard for permanent employees. And the security of a permanent employment contract was what employees wanted too.
That’s true even in industries where locum coverage has always been higher, like healthcare, teaching and the legal sector.
For example, the General Medical Council report an increase of almost 12,000 licensed doctors working as locums from 2013 to 2017. The number of locums in the UK has increased by 38% in only five years – now 1 in 5 of all licensed doctors work as locums.
That meant hiring and managing locums, contractors and freelancers was hardly a priority. Internal recruiters built their own talent pools of permanent candidates and worked hard on their employer brand from a permanent employees’ perspective – but did little on the freelancer, locum and contractor management solution front.
Even as talent shortages made recruitment harder and more competitive, the focus stayed largely on the permanent workforce.
When you did need freelancers, contractors or locums, it was so comparatively infrequent you’d typically outsource to 3rd party recruitment agencies to get someone in quickly.
The value proposition made sense. Contingent recruitment was expensive but you didn’t have to rely on it often. Even higher fees to manage contingent workers – track their time, manage compliance, run payroll – made sense.
It’s only because it didn’t make sense to change your internal systems and processes for a small minority of the workforce.
That’s what’s changed.
Problems with traditional contractor management solutions
The value proposition for this old way of hiring and managing freelancers, contractors and locum staff simply doesn’t add up anymore.
It’s costly.
Like, the NHS spends £480M a year on recruitment agency fees. Overall costs of agency staff hit £3Bn in 2014-15, leading to massive pressure for the NHS to cut costs of locum spending.
School spending on supply staff is increasing too. Schools spent £556M on agency fees in 2015-16 – an 18.5% increase over four years.
The traditional way of managing freelancer, contractor and locum staff means that a businesses recruitment costs are big. And where it hits our public sector hardest, its an unnecessary drain on the economy.
It’s time-consuming.
Recruitment is time-consuming enough for permanent hires, who you’d hope would stay with the business for at least a couple of years. You put the same time, cost and effort into hiring freelancers, contractors or locums – but they might only be with you short-term. Hours, even.
Then you’ve got your ongoing freelancer management efforts. Like making sure they’re working the hours they say they’re working and making sure they’re paid for those hours. And you might also face complex rate changes and overtime rates, which increase your time spent on payroll – or your money spent outsourcing to agencies.
It’s a poor recruitment experience for candidates.
Imagine you’re a freelancer, contractor, locum or temporary staff. You want to work with people who value your skills. Where you feel part of the team and culture, even if it’s only short-term. Where you get paid on-time for the right hours, without endlessly chasing.
The traditional model of contractor management solution doesn’t work well at scale, so you’re often letting your freelancers down on those basic things. And the result is, they’re less likely to come back to you. Which makes hiring more difficult still and increases your time and cost burden.
Traditional Contractor Recruitment is risky.
If you hire and manage contingent workers, compliance is a huge pressure. And in the traditional model of freelancer management, you’re placing a lot of faith in external agency staff. Or your own time-poor recruitment team who mightn’t be experts in contractor compliance. Either way, it increases your risk liability more than is comfortable.
There’s a new way, that remedies these problems.
A new model for freelancer, contractor and locum management solution
Agency recruiters will always have their place. They can add heaps of value, especially if you need urgent and unexpected cover fast. But they’re not the best solution if you’re consistently hiring a large number of freelancers, contractors and locums.
In that situation:
- You should be building your own talent pools, maintaining your own lists of go-to contingency staff.
- You should be able to manage that talent pool online, to avoid time-consuming calls and scheduling.
- You should be able to automatically manage compliance in a totally auditable, fool proof way.
- And you should be able to easily record the performance of your freelance, contractor and locum hires, in one place, so you know who to hire again.
That’s where contractor management software has its place. A relatively new category, freelancer management software has sprung up to help businesses to hire and manage their contingent workforce in a more agile, more efficient, more affordable way.
Contractor management platforms also dramatically improve the experience for candidates, which is a massive competitive advantage. Freelancers, contractors and locum staff who have a fast, seamless, easy experience with you will more likely apply again – so you’re building an on-tap trusted resource you can always rely on.
For instance, with modern contractor management software:
- Candidates get info about potential job opportunities direct from you, through a secure cloud-based any-device portal.
- Contractors submit timesheets and track their shifts, invoices and payments from one place, making the whole process fast and simple.
- Contractors communicate with their hiring manager and upload relevant compliance docs (and get reminders when they need updating).
Many freelancer and contractor management systems offer a complete one-stop-shop, better for freelancers, contractors and locums – and better for the businesses that rely on them.
If you’re one of the thousands of businesses that depend on the flexibility and productivity of the contingent workforce to drive growth, contractor management software could be a smarter approach.
