We all may be familiar with a freelancer who works for a company on a one-off project basis – someone you hire from a talent platform, assign a project, and their work for you is done. Instead, these past few years have seen the rise of a new type of freelancer, a Permalancer. This is a category of workers somewhere between a freelancer and a full-time employee. Unlike traditional freelancing, they have ongoing contracts rather than piecemeal work and function for companies in more of a consultant role.
According to Forbes, Permalancers are classified by the following:
- They are self-employed and are responsible for their own work schedule.
- The bulk of their income comes from ongoing contracts rather than fragmented projects.
- They may or may not have a registered company.
- Their job profile mostly involves providing consultation in their area of expertise.
- Despite their regular commitments, they may also take on freelancing gigs from time to time.
The Rise of Permalancing
The popularity of Permalancing isn’t a surprise considering the shifts we’ve experienced in the way we work. In fact, Upwork estimates 59 million Americans performed freelance work in the past 12 months, representing 36% of the U.S. workforce. Nearly 50% see freelancing as a long-term career opportunity. The Gig Economy has shown that companies, both big and small, are looking to incorporate more flexible, as-needed talent into their workforce.
The benefits of Permalancing can be experienced on both sides. Millennials want the opportunity to work flexibly and be their own boss while choosing their own hours and locations. This next step to full-time freelance means they can have both the flexibility and a steadier source of income. Permalancing means they have the freedom to work for as many places as they want to for any amount of time.
Managers are seeking flexibility, too. By incorporating Permalancers into their workforce, they can rely on a talented professional who is experienced in their field to work on projects exactly when and where they are needed. Keeping their workforce flexible means they can scale up when they need it and know they have a pre-vetted freelancer who has the exact skills they need.
A New Set of Challenges
Of course, this new type of role doesn’t come without its challenges. As we all transition into a more freelancer-focused workforce, businesses need to think about the best way to oversee and manage this team. Unlike a traditional 9-5 employee, freelancers, and now Permalancers, have varying schedules and projects and entirely different needs when it comes to correct classification and issuing payments.
As businesses grow and hire more and more Permalancers, they will quickly realize that trying to manage and pay this team with manual processes isn’t sustainable. Instead, they will need a more streamlined, organized way to assign projects, oversee work, and issue payments on an as-need basis. Not to mention setting up and storing important contracts and agreements.
Implementing a Freelancer Management System (FMS) means you and your company can have one place to onboard, classify, organize, and assign your project-related tasks, and pay your freelancers. Having a formal system of record in place means you’ll be able to keep track of this flexible workforce and have more visibility into who your Permalancers are and the projects they’re working on. A Freelancer Management System also lets you track tax forms and reduce risk by making sure workers are correctly classified and paid on time.
As the Permalancer role continues to grow, without these defined standards and processes in place, your team will end up burdened by admin and payment tasks. For any business that works with Permalancers, or plans to work with them in the future, a Freelance Management System will be essential.