Attracting freelance talent: 5 key considerations

Following the publication of our Freelance and Interim Report 2023, we’ve put together five of the report’s key implications for employers considering hiring freelancers.

This is a growing market, and one that can provide considerable savings compared to engaging external consultancies, but there are some important factors to consider before hiring freelancers, especially the importance of flexibility and how to convert perm salaries into day rates.

And read the full report here.

Overview

Over three years since our last survey of freelance consultants, the latest Freelance & Interim Report is out. The report identified a growing market with deep, high-quality expertise.

Here, we identify five key findings from the report and highlight their relevance for employers considering hiring freelancers for their key strategic projects.

5 key considerations for attracting freelance talent

Freelancers are cost-effective for long term projects

While hiring a consultancy makes sense for highly strategic, time critical projects, they are an expensive option compared to hiring freelancers.

Over the course of a six-month transformation project, our report found £100k savings on Analyst day rates compared to consultants, and £280k savings on freelance Managers compared to those working for an external consultancy. Overall, a freelance team costs 68% less than a consultancy team.

On Movemeon we have many freelance opportunities. Find your next project today!

Freelancers are motivated by good work-life balance

The freelance market is growing thanks to the great resignation, and the main driver of respondents’ switch to freelance work was work-life balance.

This indicates that companies employing permanent staff are lagging in the flexibility they offer staff. When considering and engaging potential freelance hires, it is important to remember that this flexibility is likely to be important to them. 

For this reason, freelance hires are best-suited for roles or projects that are primarily about individual delivery, as opposed to (for example) those that involve lots of face time with clients, colleagues or other stakeholders, or on-call requirements. 

Work that can be done at any time of day within a given timeframe, without needing excessive coordination with stakeholders, is well-suited to freelancers.

Freelancers are working, and earning, more

Day rates have remained flat since the last report in 2019, with a 7% increase at Analyst level and 1-3% for Managers.

However, high utilisation means that freelancers now out-earn permanent counterparts. Bear in mind, when planning costs and negotiating day rates, that freelancers are looking for high utilisation – as many days of the week, month or year worked – as possible, as this has a higher impact on their annual take-home than day rate alone.

Divide a perm salary by 120 to find the equivalent day rate

There are various costs incurred by employing permanent staff that don’t apply to freelancers, such as pensions, bonuses, training costs, etc.

The back-of-the-envelope calculation to convert the cost of a permanent salary into a day rate is to divide the perm salary by 120. 

However, because freelancers typically work for just under 200 days per year, they tend to earn 25-45% more than they did as full time employees.

Platforms are rising in importance

Since 2019 there has been a 50% increase in the number of freelancers finding work through platforms, with 21% of respondents saying they found the majority of their projects through them.

Agencies were the main source for 20% of respondents, with word of mouth the largest source at 40%.
If you are struggling to find suitable freelancers through your own network, consider signing up to a freelancer platform, or speak to Movemeon for access to our global network of over 60,000 (ex-)consultants.

More detail on the state of the freelance market can be found in our Freelance & Interim Report 2023, including the kinds of projects that freelance consultants have worked on over the past 12 months, the primary reasons that respondents give for reducing their day rates, and the average day rates that freelance consultants at different seniorities seek.

Are you thinking about hiring a freelancer for your team, looking for more information about hiring or just want some advice? Get in touch with one of our team of friendly specialists.

For more insight into the preferences of freelance consultants, see our chat with Mark for Life after Consulting.

https://www.youtube.com/watch?v=mVR2kNdT-wA&ab_channel=LifeafterConsulting

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About the author: Dan McEvoy is a freelance writer and editor, with extensive experience in finance, technology, HR, recruitment, and marketing content.