Long gone are the days when freelancers were associated with startups. Since the recession of 2008, even large and well-established enterprises are actively looking at cutting overheads and saving costs.
The rapid advancements in communication technologies have also contributed to the growth of the gig economy. Increasingly, seasoned professionals are moving out of the corporate sector to strike out on their own. Parallelly, established enterprises are beginning to realise that the most experienced person for the job is often in the ‘alternative’ job market.
If you’ve been wondering whether freelancers are a good option for your business, take a look at the data:
- According to a study conducted , 42% of both large and mid-sized companies stated that freelancers, contract workers and consultants helped them meet seasonal demands. An article from Business Insider reported that Amazon added over 120,000 contingent workers in 2017 during Christmas. This trend is only expected to increase.
- 36% of businesses stated they were using gig workers for timing benefits. Most gig workers possess industry experience and expertise and can jump on board from day one. They are responsible for the know-how required to contribute meaningfully to the business, saving the company the trouble of following the company’s onboarding protocol.
- More than 57% of businesses stated they were saving money. Over 43% estimated their overall savings to be about 20%. Many other surveys indicate that clients put their overall savings between 20-30%.
Where do these savings come from?When you look at savings per employee, you may feel the savings are insignificant. However, when you begin multiplying the number of gig workers, you’ll begin to see substantial savings.
For one, you do not have to provide health benefits, life insurance or medical reimbursement to freelancers. At a modest amount of Rs. 30000 per employee (often insurance cover is much higher), this works out to almost Rs. 3,00,000. Nor do you have to pay for 36 days of paid leave. Do the math!
You do not have to invest in equipment as freelancers work on their own devices, take care of their internet expenses, software upgrades and anti-virus protection. For ten employees, you’d save about Rs. 7,00,000 at the very least. You would also save on real estate as most freelancers work from their own premises.
You do not have to invest in training or offer various motivational perks to stimulate disengaged employees (according to a Gallup Poll, 49% are disengaged while 18% are actively disengaged). Goodbye to costly office retreats! You’d only pay for work done, meaning that you do not have to pay for the ‘cyberloafing’ that most full time employees resort to.
The savings become more dramatic when you take into account senior management roles. Often, a company needs executives in-house to get the work done. Most senior roles however provide strategic input. It is a widely known secret that they do not offer these insights round the clock or ‘work’ eight hours a day. However, they are indispensable to the business as they come with domain expertise and knowledge. A senior consultant with industry experience would be able to offer you the same depth at a fraction of the cost.