How to Get the Most From Your Freelancers

Many managers these days are supervising a radically different mix of employees as freelancers, temps and independent contractors replace full-time workers. This can create new tensions in the workplace and new challenges for bosses.

To keep up productivity and reward good work, many supervisors are adjusting their management style in large and small ways. At Conlon-Schwartz Advertising in Santa Monica, a small shop with five permanent employees, co-owner Kelley Conlon says that means treating freelance writers and designers with respect and offering small but symbolic perks.

That could mean ordering in a steady stream of food--on the company tab--to feed freelancers who are working around the clock to finish a big project. It could also mean showing appreciation by paying independent contractors as soon as the work is completed or in 15 days instead of 30.

“In a lot of places you go to freelance, you’re treated like a number, but we like to make them feel part of the team,” Conlon explains.

Milwaukee-based Manpower Inc., the largest temporary help agency in the nation, says managers should make efforts to treat temps just like employees, which means including them in staff meetings and inviting them to activities such as the annual Christmas party.

Experts say it’s important to avoid creating a two-tiered caste system, especially if freelancers represent the company to customers or clients.

Edward Lawler, a professor of management at USC and director of the university’s Center for Effective Organizations, says supervisors who manage freelancers must be deal-makers and negotiators instead of traditional relationship builders, since the arrangements are by their very nature temporary. He recommends building contingency rewards into the contract such as paying a bonus for prompt, efficient work.

“You don’t have long-term reward control over a person, so you can’t promise a promotion or the next job that comes up,” Lawler explains. “It’s more like a one-night stand, and if you’re not careful the person will be more motivated to move on to the next job.”

In many fields such as advertising, computers and entertainment, many consultants like working from project to project and wouldn’t want it any other way. But others may have hopes of landing a permanent job.

That’s why Lawler suggests that firms specify in writing the rights and privileges of the temporary relationship so that the job is mutually understood. That ensures freelancers are not misled about the realities of the position.

Conversely, managers can use temps as a stealth recruiting opportunity, screening them as potential new employees. “The wrong attitude would be to say, ‘Oh, it’s just a temp,’ because nationwide 40% of our assignments lead to permanent jobs, and that’s pretty standard for the industry,” says Stephanie Black, a Manpower spokeswoman. The agency employed 750,000 last year, including on-site temp managers hired to monitor the temp workers the agency sent out, she said.

Firms often like agency arrangements because they are a buffer between the company and the temp worker. At Glendale Federal Bank, whose work force of 3,000 includes 40 temps on any given day, the agency ensures that temps in important cash-handling positions are bonded. Sharon Winston, Glenfed’s director of Human Resources, says she knows the bank ends up paying more that way. However, “the trade-off is worth it because you get reliability. Plus, you don’t want to get into a relationship where you’re the employer. You want all the complaints, all the discrimination cases and salary issues to go back through the agency.”

Winston says managers should monitor temp assignments to make sure that they don’t turn into semipermanent arrangements. “Any assignment after 90 days, we would want them to come onto our payroll,” she said. “There are exceptions and we’re certainly flexible. But when you go past six months, there’s something happening here.”

But the reality, says economist Audrey Freedman, who studies labor issues, is that many companies build freelancers, temps and independent contractors into their long-term strategic business plans as a cost-cutting device.

Freedman, who runs the consulting firm Audrey Freedman & Associates, says companies must be careful to maintain some barriers to avoid legal problems.

“Individuals should work with their own tools, at their own direction and with outside supervision,” Freedman said.

Phyllis Murphy, who runs P. Murphy & Associates, a computer and high-tech consulting firm in Burbank, says companies should also ensure that agencies fill out W-2 forms for temp workers or else the company may find itself liable to pay taxes on freelance wages because it is considered a co-employer. Likewise, firms that hire temps with similar skills as staffers and who do similar tasks may find themselves slapped by IRS demands that the firm pay employee taxes for freelancers working as de facto employees.

What do freelancers want to see in managers? Carolyn Evans, a multimedia design consultant, says a clear vision of the project is important.

“I want someone who can articulate that vision and is accessible and available to discuss questions that may crop up.”