The sudden collapse of Silicon Valley Bank (SVB), the second-largest bank failure in US history, shocked the world and rattled the entrepreneurial community. With deepening concerns about funding and economic uncertainty, many entrepreneurs are struggling to confidently make hiring decisions. Uncertainty means companies may hold off on hiring until stability emerges.
According to the Wall Street Journal, “With talk of deteriorating economic conditions and in the wake of the recent bank failures, businesses may turn more cautious in their hiring practices.”
An interesting and unintended side effect of the recent economic uncertainty is that 73% of US workers plan to freelance this year. Workers are looking to supplement their income as they feel less secure about their financial wellbeing and take advantage of remote work opportunities.
If your company has taken a more cautious approach to hiring in light of economic uncertainty, but you still want to grow, improve, and complete tasks, taking advantage of the freelance economy may be a good place to start.
The Rent Fast, Hire Slow Model
At its core, the “rent fast, hire slow” model leans on the idea of using freelancers as a way to buy time. Recruiting for full-time roles is costly and can take several months, but onboarding a qualified freelancer through an agency like 10x Management can occur in as little as two days. For many of today’s companies, that’s the name of the game: buy time, stay afloat, and find new ways to succeed with exceptional, rented talent. There’s a reason 73% of US workers want to freelance this year: it’s becoming more and more common, accepted, and mainstream for temporary workers to augment existing teams.
Learn more about this approach in Rent Fast, Hire Slow: The New Model for Startup Efficiency.
Top Hiring Considerations
With the “rent fast, hire slow” model in mind, here are some of the top considerations for companies looking to hire great talent this year.
1. Speed
On-demand talent is ready at a moment’s notice to jump in and help with whatever is needed.
Freelancer speed is largely made possible by management firms like 10x that pre-vet talent, so you know you’re getting the right person with the right skillset. This essentially removes the time-to-hire window that tends to slow companies down.
2. Adaptability
Exceptional freelancers are experts at coming into various companies, onboarding at a high speed, and providing immediate value.
Exceptional freelancers provide the benefit of their past experiences at other companies and bring a fresh, outsider’s perspective to the tasks at hand. 10x freelancers can adapt to any role, and we constantly hear praise about how our talent ramps up incredibly quickly. It’s a compliment we’re always ecstatic to receive, and it reinforces our value proposition to our many customers.
3. Cost
From payroll taxes and insurance to 401k matching and PTO, a number of ancillary costs are mitigated when working with freelancers. As a result, the cost breakdown of a full-time employee vs. a freelancer can be pretty eye-opening.
When factoring all of the relevant FTE costs, some analyses estimate that a freelancer charging $150/hour is actually cheaper than a full time employee earning $150k/year (working the same amount).
For a high-level tech role, $150/hour will typically land you a more advanced developer, coder, programmer, etc. than an employee earning $150k.
See our full cost breakdown of a full-time employee vs. a freelancer here.
4. Low Commitment
In times of economic uncertainty, commitment is difficult. Until we know what the future holds and have a stronger grasp on short-medium term business projections, strategic entrepreneurs will look for ways to reduce financial commitment.
Once again, enter freelancers. Since freelancers can be picked up and let go with less strings attached than W2 employees (severance for W2 employees can be a major cost), they can (and should) be leveraged as a low-commitment way to get important work done.
Low commitment also means you can experiment with freelancers on a small project to see if they a) fit with the culture of your organization and b) if they provide the value advertised. This allows you to make a very small investment before committing to larger ones.
Hiring Requires Experimentation
If you’re not so sure if freelance talent could be game changing for your company, consider that experimentation is a key element of staying nimble and adaptable.
Companies tend to lay off staff and pause raises as initial reactions to reduce costs and stay lean. But staying afloat isn’t just about cutting costs – rather, it’s about doubling down on new (and old) ways to achieve peak performance. That means giving serious consideration to the power of freelancers.