Journalists generally portray freelancers as an important resource to large and global companies. And big corporations like Microsoft and Goldman Sachs certainly rely on agile talent to supplement their own resources. In fact, in a recent industry survey I advised, over 90% of companies surveyed depended on freelancers, and 76% planned to increase the involvement of freelancers in their company.
But small businesses depend on freelancers too. Here’s what LinkedIn had to say:
“The stats don’t lie: 70% of small businesses have hired a freelancer in the past … and 81% of these businesses plan to hire freelancers in the future. Reviewing previous research, more than half (52%) of small business hiring managers say that the number of freelancers and contractors in their company will increase in the next 5 years while 38% say the number will stay the same.”
How do companies – large and small – plan for freelancers as part of their total workforce? My recent book describes three distinct ways companies engage with freelancers:
- Only when necessary. These organizations favor full-time employees, and involve freelancers only when necessary, and only as little as needed.
- Augmenting internal expertise. These companies recognized the blended workforce as an ongoing need, and utilize freelancers regularly to supplement internal expertise.
- Building a virtual organization. These organizations are the converse of “only when necessary”; they minimize full-time employment and rely principally on freelancers.
Here are two successful and fast growing small businesses that have taken different approaches to the freelance revolution.
Augmenting Internal Expertise: Silverstrom Group
An excellent example of the strategic blended workforce is The Silverstrom Group, a large and innovative dental practice. The practice was established by Dr. David Silverstrom 40 years ago and has grown from a traditional solo dental practice to one of the top 5% of independent dental practices in revenue. The business, now managed jointly by Silverstrom and his son Dr. Gary Silverstrom, is recognized as a top dental practice in New Jersey.
Over the past several years, The Silverstrom Group has re-imagined the possibilities of a dental practice. They’ve invested significantly in digital technology, for example, to improve work flow, and have made investments in building their own dental lab with 3D printing capability, even implementing robotic implant placement.
But the most strategic step they’ve undertaken is to supplement their expertise by adding several dental specialties on a part-time, freelance, basis. Silverstrom believes the flexibility provided by a blended workforce has made it possible to grow the practice in size and reputation. As Silverstrom mentions, “All of our specialists and several of our hygienists are part-time, but you wouldn’t know it from the way our staff works together.”
His point is an important one. Silverstrom describes the organization challenge this way:
“Complicated treatment requires coordination, so we have invested in building a team culture by creating service teams, standardizing procedures, training our staff, even holding regular morning meetings to visualize the day, and incorporating regular after action reviews to learn from both our successes and our mistakes.”
What’s the benefit for freelance specialists? Silverstrom points out: “For specialists, the golden age of dentistry when you hung out an individual shingle is largely gone. Specialists increasingly want to come in, do their work, and not worry about business. We provide all that, and a supportive, positive work environment besides.” His freelance specialists concur. One, an Oral and Maxillofacial surgeon, says about his experience at Silverstrom Group, “It’s an ideal arrangement where I’m able to focus on my specialty and leave the administrative and clinical support to them.”
What has Silverstrom learned about managing a blended workforce? Three lessons:
- Avoid ‘gunslingers’ who don’t integrate well with office staff.
- Ensure that freelance specialists understand the values and credo of the practice, and are committed to giving patients the experience they expect and deserve.
- Train freelancers so they understand and follow practice standard operating procedure.
Silverstrom is excited about the potential of the blended workforce as a key advantage to expanding the business. As he puts it, “I see an expansion of services, for example, to areas like Sleep Apnea. We’re integrating Oral Facial Myology and other practice specialties to provide our patients with a more integrated and broader offering. Its taken a while to find the right people, but we are excited to be part of building the future of dentistry.”
The Silverstrom Group shows the value of augmenting expertise through freelancing. Jailhouse and Deep Valley Coffees, another successful small business, has gone all in building a virtual workforce. Founder and CEO, Robert Flam, is the only full-time employee of this very successful startup.
Building A Virtual Organization: Jailhouse Coffees
Robert Flam, a successful serial entrepreneur, created the Jailhouse Coffees brand in 2015, and two years later introduced the first biodynamic line of coffee beans to the NYC market when he started the Deep Valley line of coffee in partnership with Whole Foods.
From a humble beginning selling coffee out of his SUV, the Jailhouse brand is now on shelves in markets and groceries in every state along the east coast, most of the U.S. Midwest, in Southern California and even in Japan through a joint venture arrangement.
Flam says that every dollar he saves in staff costs is plowed back into sales and marketing. His workforce strategy: build on a foundation of expertise, but that expertise is the independent experience of freelancers rather than full-time company staff. Jailhouse is a rigorously managed company consisting almost entirely of freelancers and partners who support Jailhouse and the Deep Valley brand. Flam is the only full-time employee of this fast growing company.
Initially, Jailhouse depended on three critical partnerships: (a) Brazilian coffee growers whom Flam had gotten to know through an earlier entrepreneurial venture focused on superfoods, (b) a local roaster, and (c) a large regional distributor, Rainforest Distribution, whose CEO, Alex Reis, has been both a partner and a mentor to Flam.
On that foundation, Jailhouse has built a virtual organization based on the unique skills of its partners, well-defined and non-overlapping roles, and Flam’s indefatigable energy. The partner functions he has freelanced include:
- Coffee production and shipping.
- Coffee roasting and advice on new products.
- Supply chain and logistics support.
- Product packaging and design expertise.
- Online sales and distribution assistance.
- Distributor sales in all key markets.
- Accounting and finance assistance.
- Legal support for agreements and trademarks.
- Social media and website support.
Flam describes himself as the orchestra conductor. He’s proud of the virtual organization he has created but also recognizes that, as the business continues to grow, it will require more full-time help in coordinating the partnerships. As he put it:
“I’ll need to hire a small full-time team: it’s all about coordination and logistics. After a certain size of business, its essential that we support our partners with good information, ongoing communication, work closely with them, and challenge them to do a better and more efficient job as part of our total network. That’s not to say they aren’t doing great work now – they are – but as we grow, both the opportunities and the risks grow. However, we’ll still be primarily freelance based. It’s the future.”