The Rise of Flexpreneurs
As the business world becomes more volatile and competitive, organizations are seeking innovative ways to increase productivity while cutting costs. A new trend on the rise is engaging contingent workers or Flexpreneurs* to perform specific tasks to meet specific goals.
*Flexpreneur, a word collaboratively coined by the Diamondpick team, that brings together the words ‘flexibility’ and ‘entrepreneur’ to perfectly represent those who specialize in flex working models.
Over 80% of executives are reporting an expansion in leveraging contingent, seasonal, intermittent or consultant employees to achieve their business goals.
The need for a high-quality, on-demand Flexpreneurs is gaining rapid momentum primarily because of,
- Increased focus on cost saving and workforce agility
- A fiercer than ever battle for skilled talent
- Workers craving autonomy and flexibility
Both contingent and traditional workers will perform tasks required to grow a business. Hiring a Flexpreneur will get the job done without the need to take on the responsibilities that accompany hiring full-time employees. Read on to find out if the benefits of hiring a Flexpreneur outweighs hiring full time employees.
Is a Full-Time Employee more expensive to hire than a Flexpreneur?
A key element of the rise of skilled Flexpreneurs is the significant save on costs by hiring talent for specific project needs.
The employment cost structure is changing, with some organizations opting to pay by project/hour instead of monthly salaries. The higher rates that companies pay to strategic contingent workers are more than offset by the costs savings in terms of onboarding and indefinite salary paid to the permanent employees.
Direct Cost
- Costs are incurred from the moment the demand is created and continues through the hiring process, so this cost is partly dependent on how long it takes to fill a vacancy. The faster the job is filled the more significant cost saving occurs.
- Also the ongoing costs of a fully burdened and benefit entitled employee (FTE) must then be compared to the bill rate of a Flexpreneur. Also an often ignored area, the event of separation of the employee, gives rise to another set of costs, that must be factored in to make this comparison accurate.
Indirect Costs
- In addition to the more visible and immediate costs, there are other potential costs that vary widely but need to be considered. Especially employment liability and the impact on existing staff while positions remain vacant.
Here is a cost-risk analysis and sample scenarios for Flexpreneurs vs a full-time employee to better understand the cost and risk benefit each model brings with it.
These numbers speak for themselves! It is significantly cheaper to hire, train and retire a Flexpreneur over a full-time employee. But overall, the cost is only 60% of that of a full-time employee, and this benefit of 40% is passed on to the hiring team or the organization.
Why is contingent staffing becoming one of the most powerful employment strategies today?
Apart from cost, the added benefits that come with adopting Flexpreneurs are,
- Talent on demand: Organizations can tap into contingent workforce to meet their unique needs. For instance, if an organization has an influx of work or a complex project, Flexpreneurs may be able to fill these needs on an on-demand hiring basis.
- Short-term requirement: Sometimes a project demands a higher level of expertise which may not be required once the project ends, in this scenario a Flexpreneur will make a perfect fit for an organization’s short-term requirement.
- Flexibility: to scale up and down as needed, especially in today’s volatile economy. If a company does not have the ability to bring on a large number of “hires” for a major project they can choose use this flexible contingent staffing option.
- Does not add to headcount reporting: Flexpreneurs are not on the company payroll and do not feature as headcount in the organization’s headcount reporting. They are more of a project cost which is easily disposable once the project ends.
- Enables digital transformation: An organization/product may be transitioning from old tech to new tech, and may require Flexpreneurs to come in only to carry out the changeover and with no headcount issues.
The Flexpreneur Revolution
For employers and employees alike, contingent work provides flexible options in an uncertain environment.
Benefits to Employers:
A contingent workforce gives organizations the ability to acquire the best available talent with a specific set of skills. It enables quick adaptation to major market changes, rapid scalability, skill development, and expertise sharing.
- Flexibility: employers can hire for specific projects or specific periods of time, without having to commit to a long-term employment relationship. This allows employers to scale their workforce up or down as required, and to quickly respond to changes in demand or business needs.
- Cost savings: employers only pay for the time and services they hire for. Unlike full-time employees, Flexpreneurs are not eligible for benefits like health insurance, retirement plans, etc. resulting in significant cost savings to the employers.
- Specialized skills: Contract staffing is the best option when an employer needs bring in Flexpreneurs who have the specific skills required for the job vs. hiring a full-time employee who may not have all the necessary skills or experience.
- Reduced administrative burden: Hiring and managing full-time employees can be time-consuming and an administrative burden. With contract staffing, employers can outsource most of the administrative work, such as payroll and benefits management, to the staffing agency or contractor.
- 5. Reduced legal risk: Finally, contract staffing can help employers reduce their legal risk. When working with a staffing agency, the agency is responsible for ensuring that all employment laws and regulations are followed, which can help protect the employer from legal liabilities.
Benefits to Employees:
Contract staffing has several benefits for employees, especially a tech professional, making more and more of today’s talent opt for this kind of employment agreement.
- Flexibility and work life balance: Flexpreneurs have flexible work schedules and increased work-life balance. They can often choose which projects they want to work on, and have more control over their workload and hours. This can be particularly appealing to those who value a flexible work schedule or who have other commitments.
- Variety of work: Flexpreneurs enjoy a wider variety of work experiences. Since
they are often hired for specific projects, they have the opportunity to work on a range of different projects for different clients, which can help them develop new skills and expertise.
- Higher pay: In some cases, Flexpreneurs can earn higher pay than a full-time employee. This is because Flexpreneurs are often paid for their specific skills and expertise, rather than just a flat salary. Additionally, because Flexpreneurs are responsible for their own benefits and taxes, they may negotiate a higher rate to offset these costs.
- Professional development: Flexpreneurs are often required to keep up with the latest industry trends and best practices, and may have the opportunity to attend training and development programs offered by their staffing agency or clients to keep developing and updating their skills.
- Exposure to different industries: Flexpreneurs are exposed to different industries and work environments, while working for different clients. This can help workers gain a broader understanding of different business models, which is valuable for career growth.
Disruptions will continue to change the global economy and talent marketplace and the best way a company can plan for future growth is to invest in a more flexible contingent workforce. One that can be implemented, on demand, to scale up unexpected skill gaps and help businesses pivot and thrive.
We are a contingent workforce service provider helping organizations like yours gain better access to talent through the use of Flexpreneurs like – contractors, consultants, temporary workers, and other non-payrolled employees. We provide the expertise, the technology, and processes to help you reduce your workforce costs, mitigate against any risks, and increase the efficiency of your contingent recruitment process.
Click here to read more about the service expertise that we provide.
Author
Arvind Ramani
President, Account Management and Operations Strategic Accounts, Diamondpick
Arvind is a Talent Advisor, Change Management Enthusiast, Talent Acquisition & Human Capital Leader. He overlooks sales, account management and operations for the Strategic Accounts at Diamondpick, and is instrumental in developing the Hire-Upskill-Deploy and Contingent Staffing models for the company. His 19 years of experience spans across various dimensions of Talent Acquisition, leading large-scale recruitment, setting up Recruitment Shared Services and GIC’s (Global In-house Centre) multiple times across organizations.
