Talking about Employing People.


January kicked off with a flying start with #MicroBizMattersDay.  I thoroughly enjoyed talking to the wonderful Tony Robinson OBE who threw a question at me about employing people. 

Should you employ people; or is it better to engage with freelancers?

My answer was in two parts:

Firstly, it very much depends on sector and role. I ran a manufacturing business and I’m not sure that production would have worked using freelancers. I employed 32 people on a full time basis to ensure we always met the demands of our customers. We had very good staff retention; this was also a big contributory factor to our ability to deliver an excellent service.

Part of the fear around employing people comes from the fear of having to deal with disciplinary and grievance processes, a lot of this can be mitigated if you recruit slowly and well and then take steps to reward and retain.

Secondly, it depends on the needs of the employee or freelancer. Different people require different arrangements; personally I enjoy the freedom that comes with being a freelancer and the opportunity to work with a portfolio of clients, others like the “security” and “stability” of employment. If you reach an arrangement that suits the individual then you are likely to get better performance from that person.

You can see our full chat here

It's worth noting that there are financial implications to each option and of course the compliance consideration, HMRC take a dim view of taking on “freelancers” who are actually employees to avoid paying National Insurance.

The full answer to the question has many more layers.

I was talking to one of my mentees last week, he is running a creative agency and is struggling to manage a member of his team, who is a freelance worker. The issue was more around the fact that the team member is creative and struggling to be pinned down by work deadlines. This is a recurring theme amongst creatives battling with the delivery of often elusive perfection.

Whether this chap works as a freelancer or an employee would seem to be irrelevant in this instance. It’s more about agreeing a deadline and focusing on a result rather than striving for perfection.

So is the question less about the status of the people we work with and more around our attitude to them and to the methods of working which we allow?

Assuming we have done a great job of recruiting the right people, a huge assumption I know, but the whole process of recruitment warrants a whole series of blogs, so in the interests of focus, lets make that assumption.

I mentioned earlier that the fear of employing people is often underpinned by a fear of managing people. Performance management is a subject very close to my heart, largely because I’ve seen it done very badly on too many occasions. So in the interest of helping organisations to improve their approach to performance management, I work with There Be Giants; a company on a mission to rid the world of the annual appraisal. This out-dated method of appraisal is often fear inducing and very often irrelevant as it digs out discussions of past performance.

The approach adopted by the TBG team is much more positive, inclusive, leaner and agile.

It starts with an understanding of the vision and values of the organisation and then cascades these down through the organisation, at the same time selecting priority objectives for the next quarter. This is a proven formula and part of the success comes from having measurable results beneath the objectives.

There are regular check ins against the objectives and key results (OKRs) to the extent that evaluating performance becomes part of the heartbeat of the organisation.

This approach empowers individuals and instead of the focus being on hours worked it shifts towards monitoring progress towards achieving the objective.

Managing multiple objectives can become complex but there is some wonderful technology created by Gtmhub to support the introduction and effectiveness of OKRs.

Of course this approach requires openness and transparency from the top and a desire to empower others, so it may not work for everyone!

Returning to the original question from Tony here’s a few of the points I think it’s worth considering before we even start to answer the employee v freelance question. It's not quite #IGave12 but it’s a start !

  • Firstly recognise that employing people isn’t essential; if you want to run your business as a one-man band and that makes you happy then go for it! 
  • Understand that if you do want to grow your business, there will come a point when you can’t do it all, burn out and stress are the only outcomes of holding on to everything in a growing business.
  • Be prepared to take on people who are much better than you, success does not come from employing only "yes people", agile businesses need to be innovative and quick to make decisions, this can’t happen if everything has to be run past a dictator!
  • Start the planning and recruiting process well in advance of the requirement for additional skills. Allow yourself the option of a slow recruit. A distress purchase very rarely yields a lasting good solution.
  • Consider the benefits of diversity, it isn’t always the right answer to recruit in your likeness, a mix of skills and opinions creates a more robust and innovative organisation.
  • Effective and open performance management is key to transforming managers into leaders.

This is a huge subject and I've only scratched the surface here. It would be great to hear your thoughts on employing and managing people.