By Bryan Lapidus, FP&A
Would you outsource yourself?
The so-called gig economy has come to finance. While there have always been temps, contractors, consultants and seasonal employees, the gig economy is different. That’s because numerous online market sites have developed to aggregate supply and demand and lower transaction costs where workers and employers can meet, interview and hire.
By 2020, LinkedIn expects that 43 percent of the U.S. workforce will consist of freelancers, up from 6 percent in 1989. PwC launched its own site to attract freelancers in 2016 because they had trouble holding onto the specialized, in-demand staff required to satisfy their clients.
Here is just a sample of some gig economy finance projects posted from a leading professional freelancer site:
- FP&A Best Practice Process Analysis, posted by Leading Consumer Goods Company
- Global FP&A at leading multinational consumer goods company is looking for a “best practice” process analysis for its global accounting processes
- The consultant is meant to analyze the current balance sheet review process
- Senior FP&A Resource Needed, posted by Global PE Fund
- We are PE-backed retail business that needs a senior FP&A resource to help with data clean-up and help us think about creating dashboards.
- Retail Financial Modeling & Planning, posted by Fortune 500 Bev/Food Company
- We are looking for an experienced financial modeler and skilled project manager to help us part time for 3-4 months…enhance an existing multi-country master financial model focused on operations & P&Ls…create financial and performance tracking reports…capture data from internal markets to populate and update reports…conduct analysis and produce PPT recommendations and summaries to guide our new business unit through the financial planning cycle (1 year plan)
- *Immediate need* Building an IT business case for CPG company, posted by Leading Beverage Company
- We are a leading consumer goods company looking for assistance in making an internal business case for a new IT implementation.
The Benefits of the Gig Economy
Technology has reduced the friction—cost, time, risk/reputation, location, and identification of required skills—to find the right fit. Corporations can now focus on the two main benefits of a gig economy: First, you can hire the exact skill set that you need. Second, the on-demand workforce allows employers to on-board (and off-board) contractors quickly, renting the capacity they need with reduced finder fees or consulting overhead premiums built in. It is like software as a service, but with people. Busy periods, such as budgeting time or ad hoc projects that overload staff, can be outsourced. This may happen today with contractors or temps, but the increased ease, lower cost, and wider net for specialized talent facilitate all these aspects to make them more prevalent.
Of course, there are challenges to this. First is risk; hiring someone through a web portal is akin to online dating. It could be great, or it could be a bust. How do you hire a good freelancer? Here are a few recommendations:
- Find someone who is passionate about what you are hiring them for. Ideally, you will have many people bidding on your project, so find someone who loves the challenge you are putting in front of them: building financial models, data mining, web design, and visualization. I knew I met an Excel-lover when he told me that he made a pointillism picture of his fiancé in Excel by coloring cells.
- Hire them for their best skill. Freelancers may have a long list of things they do well, but you want them for the things for which they are GREAT. These will be near the top (and will coincide with the point on passion).
- Evaluate communication skills. Key to success in any project, and even more so when the person is remote or new, is the ability to communicate expectations, progress, work, challenges, and questions. Define the format of communication—text, phone, email, Slack, other—and set your expectations.
- Look for a history of good work. Ask for referrals, examples of past work, or rankings on gig platforms.
- Develop a broad network for sourcing freelance talent so that you do not need to hire strangers.
A second challenge is the signal that it sends to existing staff, who may feel threatened to learn that competing talent is only a click away, or that growth opportunities are sent outside the company rather than to existing full-time employees.
- Manage the potential anxiety of your existing team by introducing gig work to your staff as a positive, roll it in slowly as auxiliary staff during busy times or for rote work, and if it is a matter of hiring expertise, then pair the freelancer with existing staff in order to transfer knowledge to your team. Make your current staff a part of the process to ensure their buy in.
- Develop project management skills among your full-time employees as the future of work is around collaboration on specific projects.
- Explain freelance versus FTE roles. To the extent possible, develop a policy (or at least an explanation) of why certain roles go to freelancers so they do not feel that it is job replacement—rote work, seasonality, expertise, experimental projects. Try to avoid replacing FTEs with freelancers.
A third challenge is ensuring the freelancer delivers on the work.
- Focus on the specific piece of work rather than the overall job, and make sure the project is tightly defined in terms of deliverables, process, location, and timing.
- Develop a rapport. Think about questions of teamwork and culture adapted to this virtual work. Initial face-to-face meetings will ease future conversations. Supplement with video conferencing, hang-outs, and even water cooler chatter, such as a chat space on Facebook where the team can talk about non-work-related items. Talk about culture and communications more than you normally would, and then live up to your own expectations.
- Deliver on intangibles. If you focus solely on the tasks to be delivered, you may miss the opportunity to add additional benefits: the critical eye of an outsider, mentorship, exposure to different processes and methodologies. You can ask for and write into the contract that you expect the freelancer to upskill your current employees.
- Treat freelancers like the future of work, because likely it is.
Bryan Lapidus has more than 20 years of experience in the corporate FP&A and treasury space working at Fortune 200 and private equity-owned companies. At AFP he is the staff subject matter expert on FP&A, which includes designing content to meet the needs of the profession and helping keep members current on developing topics. Bryan is also a member of the Global Advisory Board for The CFO Alliance. You can reach him at Blapidus@afponline.org.