Engagement Among Freelance and Contract Employees

Engagement Among Freelance and Contract Employees

Four Key Findings about Independent Workers

Advancements in technology that have lead to a more mobile and global workforce have also made consultant, freelance, and contract workers a norm for organizations today. The percentage of independent workers in the U.S has doubled in the past nine years, and the idea of staying in one career for a lifetime ("cradle-to-grave employment") has become antiquated. In a 2005 report, the U.S. Bureau of Labor Statistics estimated about 10 million workers were independent contractors (~7% of the workforce); and in a 2014 study by Edelman Berland (commissioned by Freelancers Union and Elance-oDesk) it was estimated that about 21 million workers in the U.S. were independent contractors (~14% of the workforce).

What is the impact of independent workers on an organization, and what do we know about them? Perhaps not considered fully "part" of an organization, independent workers still have a critical effect an organization's productivity and culture, and should not be overlooked when considering workforce/talent management and strategy.

Key Findings About Independent Workers

A recent report by the IBM Smarter Workforce Institute takes a global look at independent workers (comparing independent workers to regular employees in a sample of over 33,000 workers across 26 countries) and discusses the implications of their findings for the HR function. Their research highlights four key findings about independent workers:

  1. Independent workers are more engaged than most employees - and have greater pride and satisfaction than high potential employees.

    IBM's first insight discovers that independent workers are highly engaged and satisfied, and more engaged with their clients than employees are with their organizations. As IBM points out, this finding is interesting considering that independent workers are typically excluded from organizational programs aimed at improving employee satisfaction and productivity.

    Another surprising discovery is that independent workers are very similar to "high-potential" employees – more so than to other employees. The only engagement item where independent workers did not score higher than regular employees was on commitment. Independent workers are more likely to think about finding another client, even when the arrangement with their current primary client is expected to be long-term. When it came to job satisfaction, independent workers were just as satisfied with their jobs as high-potential employees and significantly more satisfied with their jobs than other employees.

  2. Independent workers value their autonomy

    IBM's second key finding revealed that independent workers are driven by a desire for autonomy, which may explain the high levels of satisfaction and engagement that they report (studies have consistently shown that the degree of control one has over when/how/where they work correlates to job satisfaction). When respondents were asked to rate 16 factors in their decision to become an independent worker, decisions relating to autonomy ranked at the top:

    Fig. 1: Top factors for becoming an independent worker.
    Source: WorkTrends 2013/2014; Notes: Error bars represent a 95% confidence interval. Non-overlapping error bars represent statistically significant differences (p<.05).

  3. Independent workers are highly innovative

    IBM's research found that independent workers are significantly more innovative than other employees and nearly as innovative as high-potential employees.

    Fig. 2: Innovation among independent workers.
    Source: WorkTrends 2013/2014; Note: All differences are statistically significant (p<.05).

  4. Independent workers are nearly as collaborative as most employees

    While more innovative than regular employees, independent workers do fall slightly behind high-potential employees when it comes to collaboration. However, this is still not an area where they lag immensely, falling below high-potential employees but reporting similar levels of collaboration as "other employees." As IBM points out, this lag in cooperation could be explained by the fact that, by their nature, independent workers may be less inclined to compromise (15% of independent workers reported having sole decision-making control as the best part of their work arrangement – not exactly a trend conducive to team efforts). Furthermore, when asked what the worst parts of their work arrangements were, only 4% cited working alone.

Building Trust, Pride and Camaraderie with Independent Workers

Independent workers are clearly valuable members of the workforce, yet can present a unique challenge for managers when it comes to building the trust, pride, and camaraderie critical to the experience of a great workplace. However, there are many ways to help independent workers have a top-notch experience of your company:

  • Build a sense of inspiration by sharing the mission and vision of your organization with independent employees, so they understand how their efforts help drive a greater purpose.
  • Convey how their contributions are making a difference to the team or company.
  • When possible, include them in fun or celebratory events so they can build more meaningful relationships with the people they work with at your company.
  • Don't be afraid to recognize the great work of your independent workers in company communications.
  • Solicit their feedback in team post-mortems for projects they were involved in.
  • Keep independent workers in the loop with timely communications and updates on projects they are involved in – don't leave them in the dark.
  • Set an example by treating them with the same level of respect as full-time employees, and speaking about them respectfully in front of full-time workers.

On the reverse side, there is a powerful lesson to be learned from independent employees that can be applied to their full-time counterparts. Great Place To Work® findings over many years corroborate the point above, which is that autonomy is a key factor of engagement. In fact, among the 100 Best Companies to Work For, a whopping 87% of employees on average report "Management trusts people to do a good job without looking over their shoulders." While full-time employees will never have the same level of autonomy as their independent counterparts, managers should be aware that trusting employees to do their jobs without undue oversight is a fundamental ingredient in building a great workplace.

The decision to become an independent worker versus a full-time employee is one that many people grapple with. By being aware of the points above, managers can attend to the needs of both types of employees, helping to create a great workplace for all.