Why using a freelancer is better than a full time employee

These days, freelancers are not odd jobbers waiting to get into full time work, they prioritise control over their life and the ability to work on different projects.  That’s why they are often reported to have a better work life balance than full time employees.  A better work life balance means happier workers, which tends to lead to better output.

One of the main costs for businesses is recruitment and staffing.  In the last few years many businesses in the Middle East had to lay off employees to counter the effects of the economic downturn.  In some service industries, where headcount is related to amount of clients on the books, the cost of continually recruiting and laying off full time employees can be quite expensive.  Replacing an employee has been estimated as costing 150% of that persons wage.  Another factor impacting cost is the high expatriate population especially in the UAE, as expats tend to return home after a few years.

Thus, using freelancers seems to be a perfect fit for firms in the region.  It allows companies to benefit from dynamic resourcing, quickly tapping into expertise when business is good, and limiting liability and cost when business slows down.  It also solves the problem of a continuous churn of expats who, according to a recent Hay Group study, are 8% less likely to stay in their current jobs compared to the global average (UAE sample).

In addition, many global firms are rapidly entering the Arab market.  The cost of setting up business is still high compared to other cities and quick growth is required. This often results in a high demand for digital talent, marketing and creative skills in addition to bilingual staff, as our Q1 2013 figures suggest.

Business growth is not being matched by a similar growth in skill pool, so smart businesses will look to find alternative ways of sourcing expertise in order to succeed.  Up until now there has been little clarity on using freelancers from a business operations and HR point of view, a legal standpoint or general media support.  There also hasn’t been a formal platform where freelancers can register their skills and employers can post their requirements.

Nabbesh.com is solving the platform problem.  The laws in the UAE (typically stricter than those in Levant ) have been changed since 2010 in favour of promoting more flexible work. It is now up to companies to look to their HR department to deliver more efficient hiring practices and embrace the concept of using freelancers as a competitive edge.

The War for Talent: Why HR professionals will focus on Freelancers

Escape-From-Cubicle-Nation

(image credit: Escape from Cubicle Nation)

The future workforce is made up of millennials.  Unlike their predecessors, they are much less likely to stay in work full time and more likely look for multiple sources of growth, stimulation and opportunity.  Trends assessed by the US Government Accountability Office suggest that in developed economies, freelance, temporary and contract employees make up about ⅓ of the workforce.  Mercer completed a study that showed Millennials prioritized having a flexible work schedule and having the opportunity to make a difference when it came to employment. Similarly in a recent survey by Ogilvy and Mather, 76% of respondents reported that they would rather spend more time with their families than make more money.  In the Middle East, Millennials employment aspirations are captured in the Asda’a Burson Marsteller Youth report, which shows that respondents prioritized a good work-life balance ahead of salary concerns.

Is a freelancer right for your business?

Traditionally, business success depended on a top down method of managing staff and work.  Some firms however have changed that and adopted a Results Oriented Work Environment, meaning the location and hours worked are less important than the final output. Work is done anytime and anywhere, based entirely on individual needs and preferences.  This method of working is a perfect fit for Millennials who do not necessarily associate success with longevity at one firm only. The career path for younger generations more closely resembles a patchwork quilt, as people attempt to stitch together multiple jobs into something that is flexible and works for them.

 

In her book “Escape from Cubicle Nation”  author Pamela Slim argues that the new norm is for people to maintain and develop skill sets in multiple simultaneous careers. In this environment, the ability to learn is something of a survival skill. Education never stops, and the line between working and learning becomes increasingly blurred.  Millennials are more aware than ever how the local, and indeed global economy affects their work options.  The Arab Youth Survey showed that people prioritized the UAE as an ideal place to work.  As potential supply increases, the Middle East employer is therefore faced with a unique advantage, the costs of human capital may decrease, but the ability to utilize dynamic resourcing by tapping into many people simultaneously can be done with only a slight increase in operational cost.

 

Many Middle East employers are still in a cautious hiring mode.  The highest growth shown on employment indices are in the Hospitality, Healthcare and Engineering industries, buoyed by the backing of the public sector and the stated aims of governments to reach 2020 goals including sporting events, expo’s, and increased tourism.  For the private sector, there has been a year on year drop however for full time jobs in the marketing and creative industries (-7%), the software and telecom sector (-17%), and IT field (-12%).  (Monster Employment Index).

This lack of demand for full time employment has surfaced in increased demand in the freelance field. Nabbesh.com Q1 data on what employers want shows the top 10 job posts as being in the software, marketing and design and creative sectors.  Creative skills are the most sought after, representing 59% of the total, Software taking up almost one third and Marketing being 10%.

 

Our recommendations are that HR professionals must consider using freelancers as a way to contribute to the sustained competitiveness of the firm.  For smaller firms that need to grow quickly and efficiently, the majority of  budget is spent on acquiring customers, leaving little for human capital.  Freelancers can solve this problem by offering the right skill to the business at the right time at the right price.

 

To access the largest pool of freelancers, visit www.nabbesh.com today and browse over 15,000 people with over 20,000 registered skills.

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