Why an MSP is Perfect for Managing Your Freelance Talent

May 10, 2016

Not long ago, we looked upon freelancing as a desperate measure. During bouts of economic decline, employers concentrated their recruiting efforts on non-traditional talent to keep operations running smoothly while containing the costs associated with full-time employees. Freelancing became a temporary fix for cash-strapped workers struggling to land “gainful employment” in down times. And that’s all changed. Reliance on freelance talent is booming. On-demand workers are powering business success with their speed, flexibility, agility and competitive insight. More professionals are choosing this independent lifestyle. Yes, the benefits abound. The burning question becomes, “Who’s responsible for managing them?” Why not a Managed Service Provider?

Freelancing is Becoming the New Normal

According to the Workforce 2020 study conducted by Oxford Economics and SAP, close to 85 percent of the executives surveyed planned to increase their utilization of contingent labor regardless of economic factors. Even the more conservative estimates in Deloitte’s Global Human Capital Trends 2016 painted a compelling picture. Across 130 countries, 51 percent of the business leaders polled said they would contract with freelancers in the next three to five years.

The most recent study from the Freelancers Union and Upwork revealed that 54 million Americans are working independently. Of those workers, 60 percent changed their career course by choice, and 50 percent said they would never abandon freelancing in favor of a traditional job. They embrace the freedom, the ability to control their own destinies, the entrepreneurial rewards, the variety, the exposure to new industries and skills, and greater income.

These individuals are not unskilled. Their ranks include Ph.Ds., data scientists, physicists, engineers, specialists, former executives and even Google programmers. The inevitability and composition of the gig economy is no longer a question of if — it’s a question of when. Yet as freelancers infiltrate the ranks of corporate teams, we’re left with the perplexing debate of who should manage them.

As Jon Younger and Rishon Blumberg point out in the Harvard Business Review, managing freelancers — or agile talent — poses a bit of a problem: “Most organizations aren’t good at project management, and fewer still have a well-defined and structured protocol for engaging and managing agile talent other than contractually. Once the freelancer is selected and contracted (no easy task, but that’s a discussion for another article), management is left to the individual project or functional manager. Some are excellent. Others are new to managing or stronger technically than as a supervisor. Rarely do we find organizations that direct, support, and oversee the work of agile talent, and the projects they support, on a consistent and disciplined basis.”

The article’s authors offer a variety of creative approaches for supporting the agile workforce. Yet when I read their suggestions, I kept thinking, “This is precisely what MSPs do best.” Let’s look at the ways an MSP can help clients effectively and effortlessly oversee a freelance talent population.

MSP Approach to Freelancer Management

Project Management. Younger and Blumberg’s first suggestion is for organizations to assign roving project managers: “Their principal responsibility is to support product managers and technical teams in optimizing the planning, onboarding, utilization, and management of freelancers.” MSPs perform these same duties all the time. As the single point-of-contact between hiring managers and talent, they easily foster collaboration, performance monitoring, coaching and guidance, demand planning, and on- and off-boarding. They also mitigate risks associated with co-employment and misclassification.

Beyond that, MSPs ensure that agile talent have well-defined roles, ongoing communications, strategic feedback, clear project tasks and centralized interactions. This removes the managerial burdens from busy department managers.

External Talent Management. As an alternative to the “roving project manager,” Younger and Blumberg propose the creation of an external talent manager role. This position would reside in HR or procurement and serve a similar function — bolstering the “depth and effectiveness of the agile talent network.” Once again, this is a core focus of MSPs. A primary outcome of a robust managed services program is the construction of a solid supplier and talent network. More importantly, top MSPs have incorporated independent contractors into their offerings. That means they’re ideally positioned to handle the procurement and administration of a freelance talent pool. Here’s why. Independent service providers receive the same dedicated representation as staffing partners through an MSP’s supplier management group. Independent service providers have access to communications and all materials needed to perform their services. Experienced MSPs have already instituted protocols to design and oversee this kind of engagement.

• As with independent contractors, MSPs can build a process for freelancers that focuses on standardization, consistency and compliance.
• The MSP limits any perceived managerial roles with agile talent:
  • Administration and onboarding processes are performed by the MSP
  • Regular communication occurs between the freelancer and the MSP, and only in relation to contractually bound and scheduled milestones, deliverables and Statement of Work (SOW) commitments — not employee issues such as attendance, timekeeping, hourly productivity checks, etc.
• The MSP acts as a payment agent between the freelancer and the client; those terms are clearly outlined upfront in a Professional Services Agreement (PSA) or SOW. The billing structure is negotiated to ensure that financial control factors are adhered to.
• The MSP restricts the inclusion of freelancers in company functions unless absolutely necessary to the work.
• The MSP ensures that the utilization of agile talent occurs for specific, specialized work: projects with established start and end dates, for example, as well as work not performed on an ongoing basis.

Broaden the Role of “Chiefs.” For this recommendation, Younger and Blumberg invoke the field operations of petroleum and mining companies. These organizations have historically created “chief” type positions to oversee the technical staff. On projects of this nature, you’re likely to find chief geologists or chief engineers — roles more uncommon in professional office settings. Rather than creating new levels of leadership within an enterprise, an MSP provides similar people at your service. A managed services solution has a lot of professionals supporting it: program managers, supplier relationship managers, HR specialists, sourcing experts, compliance and risk officers, finance support, account executives and more.

The chief’s main concern in this example would be to “keep tabs” on new technologies, developments and external talent sources. These components are built into an MSP program inherently. They are evident in the introduction of VMS and related technologies, continuous improvement planning, business reviews, innovation labs, educational seminars on industry and market trends, metrics monitoring and performance reporting.

A significant benefit of an MSP is the client’s access to talent analytics and workforce data. The majority of MSPs have already immersed themselves in learning the new freelancer and online work platforms. Many of their leading VMS providers have even integrated the functionality into their systems. More importantly, MSPs have been consolidating blended workforces for years while optimizing performance.

In terms of domain expertise, mentoring and understanding the needs of each freelance group, MSPs have that covered, as well. Their project management teams are usually tasked with specific talent categories to ensure familiarity and knowledge with the roles. MSPs also bring the benefit of lessons learned. They have worked with a variety of organizations, workers and industries. They are constantly developing new insights, skills, standards, best practices and innovations. Because of their wide-ranging and eclectic experience, they are the best choice to manage freelance teams across the enterprise. And of course, utilizing an MSP will dramatically cut the costs of creating additional internal positions or hiring new managers.

Using an MSP? Then You Already Have the Solution to Freelancer Management

There is no single or simple solution to the challenges of the gig economy. Yet we know that many rewards await those who get it right. And we can. While client hiring managers endeavor to adjust to the workforce changes that come with this new paradigm, MSPs feel right at home. If you’re considering freelancers and already have an MSP program in place, there should be no question about how to manage them and achieve superior outcomes.

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