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DR. V: Welcome back again to the TrendPOV show. If you’re just joining us, we’ve been talking with Eric Vonk, Founder and CEO of Back of the House. You can see their website at BOTHPro.com. That’s B-O-T-H-P-R-O-dot-com. And we’re talking about the evolution of freelancing as the norm in employment, what it means for the freelancers and what it means for your business.
Now Eric, we’ve got a couple of more interesting questions coming in on the tweet stream during the break. This one, this is too much fun!
He says, “A company protecting you for loyalty. That sounds medieval like a castle lord. Are we becoming a land of individual lords now?”
I can’t help, but think -- let me get my nerd on for a minute here -- this is in reference to the original use of the word ‘freelance’ in the famous work, Ivanhoe by Sir Walter Scott,w hcih meant -- oh, I’ve been reading too much again. It was originally meant quite literally a lance that was for hire (although it wasn’t actually free). But interesting question, are we becoming a country of little businesses, little fiefdoms?
ERIC VONK: Not of little fiefdoms, but of little businesses. Over the last decade, the number of one-person start-ups has been [error in recording]…
DR. V: Oop! We’re losing your audio just a little bit there. It’s cutting out. Let’s see if we can get it back. Oops! We have lost his connection. While we wait for Eric to dial back in with us, a few little interesting bits for you is that there’s some interesting regulatory backlash that’s happening right now not only in Massachusetts, but also in the European Union that could be considered even a little bit anti-freelancer.
Let’s see if we can get Eric back here in just a moment and get his thoughts on that. Now, it’s something that we’re tracking especially for next month. We’ve got a surprise for the State of Massachusetts there. But we will see what he thinks about that.
Now, what’s interesting about the regulatory backlash is this is all stemming from a lack of revenue coming into the State and coming into the European Union.
And Eric, do we have you back?
ERIC VONK: Yes!
DR. V: Alright! We’ve got you back. So, what I want to dive into now is this regulatory backlash. I was just telling everybody about legislation popping up from the State of Massachusetts, a little bit in the European Union because when a company says, “I’m going to hire a freelancer instead of an employee,” they’re not paying the sort of taxes that they normally would pay and the States and the governments are losing out on revenue and they don’t seem happy about it one bit.
Where do you think is this going to go? Is this going to get better? Is it going to get worse? What’s going to happen?
ERIC VONK: I hope it gets better really soon because some of the developments as we’ve seen over in the last year (or even a year or two or so) has been very counterproductive. That announcements of crack downs by the IRS [error in recording] in reference to compliance crack downs by the [00:44:48] almost counterproductive in terms of societal developments.
DR. V: Right! Right! And also, I think it is hurting the companies, as well.
ERIC VONK: …an employment contract is -- it is! These developments are causing a lot of unnecessary friction in the employment mark. In the fringes, there are a lot of companies who are postponing decisions to deploy people because of here, because they don’t know what they don’t know. And there are government officials on TV and in the newspapers all sorts of threats around working with people in an independent basis.
And to earlier point, the fact that independents pay less taxes than people who are employed is a myth. It’s not true. If people pay their taxes in the right way, everybody pays the same amount of tax -- perhaps with the exception of unemployment taxes. But as an independent, you cannot become unemployed.
So, I have no idea, I have no clue what this negative, unnecessary counterproductive hype is about.
DR. V: I’d agree. And there’s a lot of businesses really suffering for it right now. We’re really hoping that the other States in the U.S. don’t follow the lead of Massachusetts. We’re going to do a lot more on that next month. Believe me! It’s going to be an interesting week.
Now, in terms of it, we’re a little worried that other States would say, “Hey! That’s working for Massachusetts, let’s give it a try.” And for businesses, this could be pretty detrimental in the sense of what some people are suggesting is that there should be laws that say that a business cannot hire a freelancer who does the same work that is in line with what their business does.
And so, for example, if you run a software business, you could not hire a freelancer who creates software. But you could hire a freelancer to work on the plumbing in your building. And so, it’s an interesting kind of case study, which is causing a lot of trouble, but governments may feel they’re missing out especially on those unemployment taxes coming from the companies. We’re a little worried it might get worse.
Now, at some point, I’m imagining, it will all calm down. And I’m betting it’s when executives stand up and say, “We’re not going to stand for this.” Do you think that they’ll get to the point where they’ll stand up for the rights of their businesses?
ERIC VONK: Yes, of course because every action is causing a reaction. And definitely, the kind of actions that you are rightfully quoting are very counterproductive and particularly in an environment where we have millions and millions of people who have no work. And in that environment, you’re [error in recording] for the supply and demand and skills to meet with each other, it’s ridiculous! It’s outright -- it’s… it’s… it’s very wrong!
DR. V: It is! It is! Well, and it gets to the point of telling you how to run your business, which as an executive, that’s about the last thing you carry here.
We had an interesting question coming in from the audience this week in terms of what freelancers are doing in the future. And now, one interesting thing we’ve seen start to kind of crop up is freelancers getting together, forming little networks, almost little perfect teams of people put together for a specific project or specific company that they’re being hired by. And the question that came off of that was when freelancers get together to form partnerships, is it basically a sort of expert network?
That’s good…
ERIC VONK: Yeah! I think that the answer to that is yes. And I think developments like you’re quoting there are very positive. Why not let individuals in society within the freedoms that they enjoy chose to get together, enjoy know-how and knowledge and network and form groups and alliances in all ways and shapes and forms to find ways to exchange their competencies for income as efficient and beneficial as possible? I think these are all very positive, supportable developments. And I would hope that we all make more and more efforts to make government aware that supporting efforts like you are just now mentioning is what they ought to be doing, rather than enforcing/trying to enforce arcane rules!
DR. V: I have to agree! I think you’re absolutely right! And then, some. And I hope we get some rolling discussion going on this on LinkedIn over the weekend when we post discussion about the show and keep the discussion going because executives really need to get in on this, understand where it’s going and how it affects them.
Now, another question we got in from our audience this week, I want to make sure that we get it on the air is will freelancers be used for more strategic work in the future? This particular audience member saw a lot of freelancers being used for what they would call the ‘grunt work’ and wondering if we’ll start to see freelancers for more strategic level work.
ERIC VONK: Oh, no doubt about it. And when you really look at it, it’s already been done for a long time (perhaps in a way that is less obvious). But look at how we’ve used consultants and management consultants and strategic consultancy firms forever already to join their expertise as businesses to help shape our future. That’s where you know [00:51:22].
When you look at the arrangements that exists between consultants and consultancy firms like back-end business, this is basically the same principle as contracting with individuals, right? Only in this case, you do it through a consulting entity.
DR. V: That’s right! That’s right! It’s basically the same thing. So, I think companies are just going to see so much benefit as this trend towards freelance as the norm continues on.
Now, of course Eric, you are yourself Founder and CEO of your own company that you work with BOTH -- and of course, everybody, again, if you haven’t checked it out, you have got to see what they do over at BOTHPro.com (that’s B-O-T-H-P-R-O-dot-com) -- and what I’m wondering is what percentage of your staff over at Back of the House are freelancers.
ERIC VONK: The [error in recording] we drink our own champagne and encourage people to work with us on an independent basis. Now, there are some support functions, et cetera in which it’s just very difficult in the current regulatory and legal environment [error in recording] we resort to employment, of course. The law is the law. We always say, “Hey! The fact that you have a driver’s license doesn’t allow you to exceed the speed limit,” but to the extent that we can drive without a driver’s license is within the speed limit, we do! And we deploy contractors, rather than employees.
DR. V: Excellent! And it’s starting to be a popular way to go. And a lot of companies that are starting from scratch these days are using freelancers. They call it ‘the virtual company’. We’ve covered a little bit about it before on the show here. And it’s just a wonderful, wonderful way to go. We’re the exact same way here at TrendPOV. So, we support it 100%.
Now, this is a really good point for us to pop over to our next commercial break and our last commercial break of the episode. So everybody, keep it right there because when we come back, it will be time to put our guest expert in the hot seat. You don’t want to miss it. So, come on back for Eric Vonk in the TrendPOV hot seat right here on TrendPOV.com.
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DR. V: Welcome back again to the TrendPOV show. If you’re just joining us, boy! Did you show up at the right time? We’re just about to put Eric Vonk, Founder and CEO of Back of the House (That’s BOTHPro.com, check ‘em out) in the TrendPOV hot seat.
So Eric, most important question of the whole show, if our executive audience takes nothing else away from this episode, what are the three big things that they need to remember?
ERIC VONK: I think there are four.
DR. V: Alright!
ERIC VONK: That’s how this seat is. First and foremost, I believe that people should make sure that they are informed about the basics. What does it really mean to be an independent and work independently as a freelancer -- and just know the basics. So you can’t be bullied into believing stuff that is outdated enough and applicable anymore.
Number two is make sure you that you want it yourself. You have to know what your market is, what your strengths are, what your value is, where the likely demand is for your services and continuously market yourself.
And of course, number three, very much in line with what we do, get your back of the house in order. Make sure that you cannot stumble over administrative hassles and operational issues that can hold you down and slow you down and spend valuable time on stuff that you can really give to experts [00:57:38].
And number four, the most important one, enjoy it! It’s the best way to enjoy and live a professional life.
DR. V: It truly is. And I think, more and more is going to draw people to it because the lifestyle just can’t be beat. Absolutely!
Well Eric, thank you so much for joining us today. It’s been just a thrill to have you on the show.
ERIC VONK: Amy, the pleasure is all mine. And if I’m not mistaken, this is your 50th show, right?
DR. V: That’s right! This marks our 50th show. We’re super excited to have survived this long and still be going strong.
ERIC VONK: Well, congratulations! Heart-felt congratulations! You’re doing a terrific job and what you are doing is very valuable in the world of independent work, which is the future! You’re providing a very strong base to the future. Well done!
DR. V: Thank you, Eric. Thank you so much. I’m going to ask you to hang on the line for just a minute so I can wrap up with you after the show -- because everybody, I cannot let you get away, of course, without letting you know what’s coming up on TrendPOV next week. Oh! You know it is that time again for the Self-tending Mushroom Award. Next week, we’re going to be giving the sting of the Self-tending Mushroom to the U.S. Congress. What have they done? Well, where to begin?
But specifically, they’re getting the Self-tending Mushroom Award next week for following the green fad of the day to the detriment of any real solution and potentially to the detriment of legal protections of your business. I am not kidding! So, you’re going to want to look out for the article that comes out on Monday. Join us next week when John Hoffmeister, Founder and Chief Executive of Citizens for Affordable Energy and Former President of Shell Oil Company and author of ‘Why We Hate Oil Companies?’ will join us on the show to talk about why the U.S. Congress is making such a massive mistake. And it only begins with the disastrous blaming of only BP for the Deepwater Horizon disaster when in reality, there are more than half a dozen companies involved.
It’s only the beginning. We’re going to cover it all. So, make sure you’re right here next week for all of that. And more importantly, what all of these regulation in Congress is going to mean for your business as a backlash from the BP disaster.
Look! I’m doing it, too. Not just BP, but so many more. It’s going to be fascinating stuff. Make sure you catch it on Monday. Join us in discussion on LinkedIn and on Twitter all week long. And of course, we’ll see you right back here at TrendPOV.com for more of the TrendPOV show. Thanks for joining us.
