How To Create A Freelancer Compensation Model That Stands Out by Forbes – Entrepreneurs

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The side hustle has become the main event. According to Freelancing in America 2018, a report commissioned by Upwork and Freelancers Union, 56.7 million Americans worked a freelance gig in 2018. Surveyed freelancers reported better work-life balance and more fulfilling lifestyles, so it’s little wonder why skilled and unskilled workers alike continue to leave the traditional workforce.

Are you paying freelancers in a way that will keep them working for your business?

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As much as freelancers enjoy their freedom, however, they also enjoy getting paid. Flexible compensation models allow freelancers to enjoy the same liberty in their finances as they do in the rest of their lives. Options for freelance work continue to expand, particularly when it comes to addressing small businesses’ needs, so companies looking to attract the best freelancers should consider how best to cater to those workers’ financial preferences.

Upgrade your compensation model with these flexible perks to stand out in the crowded freelance employer space:

1. Clear and Immediate Payout Structures

Freelancers don’t want to wonder about their next paycheck. They deserve to know when they get paid and how much they earn, and they want to control those income streams down to the cent and minute. Freelancers work for themselves because they enjoy flexibility, so if they want to work more or less as their situations change, employers should empower them to do so.

Skin care company Nu Skin understands the needs of modern freelancers. “People want freedom from their circumstances, flexibility to work when and how they want, and the fulfillment of doing more,” Ryan Napierski, president at Nu Skin, says. Companies in the gig space need tiered payment plans to accommodate varied working preferences, Napierski suggests.

Nu Skin’s new compensation plan, called Velocity, delivers payment to its distributors within hours. Velocity also helps Nu Skin brand affiliates earn bonuses daily, weekly, and monthly, as well as track progress toward those goals, so Nu Skin gig workers always know where they stand.

2. Performance-Based Incentives

Maren Hogan, founder of Red Branch Media, recently wrote on Glassdoor about the evolution of freelancer compensation. “Satisfied employees are not solely motivated by money,” she says. “As employees grow out of traditional compensation, what is the next step? Clearly incentives.”

Many freelancers leave the traditional workplace because their extra efforts don’t lead to extra rewards. In their eyes, why should they work five times harder if the person in the next cubicle earns the same paycheck for less work? Employers, too, benefit from performance-based incentives. By rewarding the people who produce the best work, businesses spend a higher percentage of money on overachievers who deliver above-average ROI.

Hogan advises businesses to construct their incentive plans with care. She recommends plans that relate directly to performance in the assigned role — no murky expectations for employees to go beyond the call of duty in unfamiliar areas. She also says plans should contain easily measurable metrics, so employees never have to wonder whether they’re on track to earn extra pay.

3. Gamified Earning Structures

Work may not be fun, but everyone enjoys earning rewards. Whether those rewards come in the form of a badge, a tier, a title, or simply extra cash, gamification of freelancer pay has quickly become one of the most effective compensation models.

Gamification works by breaking down company goals into achievable chunks, then providing visible rewards for people who meet certain criteria. Effective gamification makes everyone feel like a winner, and it can add an element of fun to what might otherwise feel like drab data tracking.

Primeum, an incentive compensation company, cautions employers against creating structures that only reward the top percentage of workers. “Ranking the best players may discourage others and create tension,” says the company’s blog. “The solution: make several rankings, change the ranking parameters so that everyone has a chance to navigate. Rather than a difficult challenge, better a few small challenges with low rewards.”

4. More Inclusive Opportunities

Freelancers feel motivated by the same factors as their traditionally employed peers. According to Harvard Business Review, those factors include autonomy and variety — easily achievable in the freelance market — but also affiliation and advancement. Include recognition and collaboration within the compensation model to show freelancers that their work for the company matters.

Invite longtime partners and exceptional freelance workers to participate in team-building exercises. Buy plane tickets for the best of the best, and have them visit the company in person. Use that opportunity to create new content about how well the business treats its freelancers, then promote that content to inspire current workers and attract other high-quality contractors.

“Make an active effort to get to know your freelancers just as well as you know your in-house team,” says Sarah Karakaiain from the National Association of Productivity and Organizing Professionals. “That could mean sending out regular surveys and get-to-know-you emails or inviting them to pub quizzes and casual hangouts. Whatever it looks like in your company culture, get freelancers into the fold.”

Inclusion may not sound like compensation, but freelancers who live solo lives often experience a lack of human connection. Treat them like real, valuable people, and those investments could pay massive dividends in contractor engagement and loyalty.

Perks like these reflect just how flexible compensation has become. People don’t just want biweekly checks anymore. They want more control over their finances, more avenues for growth, and more opportunities to prove their worth. Provide those perks to attract and lead a more committed, collaborative, and effective freelance workforce.

July 9, 2019 at 05:01AM
https://www.forbes.com/sites/serenitygibbons/2019/07/09/how-to-create-a-freelancer-compensation-model-that-stands-out/
Forbes – Entrepreneurs
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