How do you manage someone you've never met in person? And how do you gain loyalty from somebody who works for you 10 hours a week? How do you make all the parts work together?
For all the talk about the gig economy, it's still something most people have little firsthand experience with. According to a recent Pew survey, only about one in 10 Americans have even heard of the term "gig economy," even though it's been estimated that about 40% of the U.S. workforce will consist of freelance and independent workers by 2020.
Already, the rise of gig work means considerable management challenges, particularly for business leaders tasked with overseeing a revolving door of contractors. Here are four ways to help keep everything running smoothly.
The fact that you may make your living working for multiple companies instead of one doesn't eliminate the fundamental human need for purpose and connection. At a basic level, people need to believe that they're good at what they do, that they're valued and appreciated, and to feel like the work they do has purpose.
Even those who manage a decentralized, part-time workforce need to provide that sense of context and motivation to everyone involved. Working with freelancers may seem as though it frees you up from having to invest in that social capital, but you risk being left with a disconnected workforce that does exactly what they’re told and no more—like an army of robots that need to be carefully programmed. There are few forms of waste costlier than apathy.
It can be exciting to do the math on the benefits of breaking up your operations through gig work. When I was managing complex global logistics at the head of an international shipping company, I was thrilled at the ROI of my decision to split one job into two. But I was less successful as I tried to keep getting more and more granular—until what was once one full-time job was now handled by a bevy of freelancers filling three or four separate roles. The math worked when I broke one job up into two; it fell apart once one job had become four.
Specialization has its limits. Keep in mind that every addition to your workforce—even if they’re only part-time or around for just a while—means added communication, on-boarding, and management costs. Careful leaders watch for the point of diminishing returns, where the inefficiencies of managing too many people to do a single job outweigh the benefits.
The gig economy demands different and more precise calculations on the cost of alternatives to get given jobs done within an organization. And it's up to managers to track all that continuously, lest companies create waste in the pursuit of efficiency.
Any startup CEO can tell you how important a flexible workforce can be. The person you hired to do XYZ six months ago may now be doing ABC (or even ABCXYZ). But freelancers can’t fill the gaps formed from the crises of the day without direction coming from some centralized source. You need to carve out these utility roles intentionally. And to do that, you need to decide whose gig it'll be to fill the gaps between everyone else's gigs: Whose job is it to manage all these disparate experts?
Nor does the gig economy lend itself well to people "growing into the role." It’s critical to be more deliberate about investing up front in precise expectations about what success looks like within every role—including the part-time and temporary ones. You have performance metrics for all your full-time positions, and you can't skimp on them for your freelance ones. How will progress be measured, by whom and when? Answer these questions first—before bringing anyone aboard.
Managing a constantly changing team of freelancers can be a real challenge. To do it right, leaders have to maintain a sense of purpose and balance, just the way they would while managing teams based right in the office. It's easy to get caught up in the hours your gig talent tends to keep, but managers also need to stay grounded. You already know which hours in your workweek are your most productive. Focus on those—even if they don't sync up exactly with your freelancers'. Those hours are usually when you complete tasks you're most passionate about and the work you can't delegate. If you can stay focused on your own solo work at the same time that you oversee your gig workers, you'll feel less overwhelmed by the challenges that presents.
But even if you find yourself struggling to manage a growing workforce of freelancers, the gig economy may be able to help there, too. Many companies are hesitant to do so, but there's nothing stopping you from hiring qualified independent workers for your c-suite. Especially in startups' growth phases, leaders should consider outsourcing a COO position to help navigate this new world of work so they can focus on the core of the business.
Justin E. Crawford is the founder of Agents of Efficiency and author of the international best-selling book Live Free or DIY. Justin has been featured in over 200 major media outlets, writing and speaking regularly on the issues of growth hacking and startup and small business operational process refinement.