The Top 2 Reasons Companies Lose Talent to the Freelance Lifestyle

In the past five years, the amount of freelancers in the U.S. has grown by 3.7 million. According to a recent survey of freelancers, 84 percent reported having a flexible schedule as the main draw for pursuing freelance full-time. More than that, 66 percent of those surveyed reported work-life balance as a deciding factor in seeking freelance work.

As a manager, if these stats don’t scare you, they should.

A growing freelancer population means more employees leaving your company, which will require you to replace them with new talent. The cost to replace a highly trained employee can exceed their annual salary by 200 percent — not exactly a boon to your bottom line.

It’s evident that despite an increase in the number of available full-time jobs in the U.S., employers are failing to attract and retain talent, especially as technology allows the freelancing population to grow and thrive. To combat this, companies should be more flexible and reconsider how they promote work-life balance.

A Harsh Reality

Depending on your stance, this either sounds like a great way to boost morale or a horrible waste of time that could lead to decreased profitability. But both sides of the coin can agree on one thing: This kind of solution is anything but simple.

It’s true — rethinking your work schedule and promoting employee well-being take time and resources. For many executives, these are two things that are always in short supply. Still, the effort you put into improving these areas of your work environment now will pay off tremendously in the long run.

Allow me to use a personal example to illustrate what I mean:

On January 30, my father passed away. It was sudden, completely unexpected, and the shockwaves that ran through my family are still painfully ongoing. What was I going to do? How was I going to take care of my assignments? What even goes into planning a funeral? How was I going to get back to New Jersey on such short notice? All of these thoughts and more flooded my mind faster than I could process any of them.

Not to mention, I had already flown back to New Jersey after he was suddenly admitted to the hospital on my birthday. I spent two weeks by his side in the ICU, desperately hoping he could hear me reading 1984 through the induced coma. Like somehow George Orwell would be able to take his sickness away.

While all of this was happening, I couldn’t help but feel grateful for my situation. I very recently made the decision to switch from a cushy corporate position to freelancing full-time. Had that not been the case, my ability to travel home to be with my father would not have been possible. I would have lost my wages completely (such is the life of an hourly employee), and that’s only if my manager would have accepted a request for an indefinite absence given the uncertainty of his situation at the time (unlikely).

Not only was I thankful for the flexibility to be with my father, but because most of my freelancing can be done remotely, I was able to continue working so I wouldn’t lose any money or eat up vacation days. What’s more, all of my clients were incredibly supportive, offering to dial back my workload if I needed it and adjusting their deadlines just so I would have more time to recover from this emotional trauma. I was astonished by the flood of understanding and support — most of which actually came from a brand-new client who approached me with an assignment opportunity right in the middle of this mess. I will always remember how well they all treated me and how caring they were during my time of need.

But as I looked around at the friends and family members suffering along with me, I realized this kind of understanding was not the norm. After informing her superiors of her need for a prolonged absence from work, my aunt was told that she could not use her PTO because she was not sick herself. She was docked her pay for two weeks while she sat by her brother’s side.

My step-mother — whose workplace woes extend far beyond the reach of this isolated incident — was told after his passing that because she and my father were never formally married, she would not be getting any bereavement leave to grieve. Not only this, but she had to use up all of her vacation days and PTO in order to stay in the hospital with my dad; that’s ten days’ worth combined of PTO and vacation. She’s been with this company for more than 20 years.

My brother had a slightly different experience: Working for the local pet store, his employers were more than happy to allow him the time he needed to be with his family. While a nice gesture, his status as an hourly employee prevented him from earning anything for almost a month. It seems that while hourly employees may have better scheduling flexibility than their salaried counterparts, they still suffer in terms of employee well-being due to a lack of benefits and continued financial support in difficult times.

As I began to reflect on the situation, I was left with two overwhelming feelings: gratitude for choosing to pursue freelance full-time when I did, and sadness that others in my life couldn’t have that same freedom.

The Bottom Line

I’ve been back at work now for a little over a month. It hasn’t been easy, but because I’m able to set my own hours and work at a pace that’s comfortable for me, I’ve been able to take better care of myself and heal the way I should. But I know that if I worked for a corporation, I wouldn’t be able to make the same claims about my well-being.

How do I know this for certain?

Two years ago, when my grandmother died, I frequently used the designated “Mother’s Room” in the office to cry into a pillow between projects. A grandparent is only worth one bereavement day, after all, and I couldn’t afford to spend my vacation days to grieve appropriately. So, I cried in the Mother’s Room (aka — a closet with an armchair in it; but that’s an injustice for another day).

In fact, the Mother’s Room was renowned by the women in our office as being an emotional safe haven when work or personal life became too much to handle. It was not uncommon to catch a few coworkers quietly excusing themselves from the closet while dabbing at freshly wet eyes. But time is money, and encouraging your employees to cry in the Mother’s Closet is better than giving them the time they need to heal — right?

I mean, that’s what we’re communicating, at least. Bereavement policies aren’t standardized and usually follow some inane pattern that prioritizes grief according to your loved one’s proximity to you on your family tree. (Because that’s always an accurate way to assess your level of suffering.) If your loved one happens to fall a few apples short of your tree, they clearly weren’t important enough to have any real time to process their death. (Even though 42 percent of adults have a step-parent or step-sibling.)

How ludicrous do workplace flexibility and employee well-being efforts sound now?

Small Change, Big Impact

Implementing a flexible schedule and establishing well-being programs doesn’t have to be extensive to be effective. Managers can make meaningful changes without sending the HR department into a panic:

• Arrival and Departure: As a team lead, your direct reports will look to you to set the tone for arrival and departure times. Let them know that while there are certainly standards to uphold, you also know that circumstances come up that will sometimes prevent them from on-time arrival. I also suggest giving each member of your team the flexibility to choose one day each week for them to leave a little early. It’s a nice gesture and will go a long way to boost morale.
• Lunch Hour: Make sure all of your employees take one — and make sure it’s the full hour. Better yet, don’t get upset with them if they roll in 20 minutes past the “hour.” This isn’t Cinderella, and you won’t be saddled with a bunch of pumpkins if they’re a few minutes later than usual.
• Mental Health Check: If you’re a good manager, you’re already doing performance one-on-ones with your employees. Why not start having one-on-one lunches with your team members each month to get to know them personally? Performing well at work and performing well at life almost always mirror each other. If you notice an employee’s work is suffering, there may be bigger issues at play — ask them about it! And if the issue is extremely serious, go to HR and ask how you can work together to accommodate your teammate.
• Appreciation: Showing your employees that you appreciate their efforts is crucial to building a solid relationship with them. Doing so in a way that makes them comfortable is even more important. Some people don’t love a standing ovation and would rather receive a private email, while others are wondering why you haven’t asked them to headline the office holiday party already. Everyone is different and should get the recognition they deserve in the way they’re most comfortable receiving it. Don’t believe me? Go ask O.C. Tanner. They’ve only done extensive research on the subject and have been in business for, like, 90 years…

These suggestions won’t cure work-life balance, but sometimes taking the time to build a strong employee-employer relationship is enough to keep them in the office despite an alluring freelance career. Loyalty and feeling a part of something bigger than oneself is often more important than the chance to work from anywhere at anytime. Even on my new path as a full-time freelancer, I still seek out opportunities to meet in-person with my clients and network with others in my field. Humans are inherently social beings, so an office setting makes sense. But most times when they’re choosing to trade in a steady paycheck for the uncertainty of freelancing, it’s not because of anything the company did.

It’s because of their managers.