Inside Microsoft's Freelance Services Program

June 23, 2020 Eric Knox

Freelance services, including independent specialists, experts, consultants, executives, and project managers, are a powerful resource for big companies. By helping executives move more quickly on complex strategic and operational projects, they deliver tangible value. Yet most organizations haven’t implemented the workforce strategies they need to drive results with the gig economy. Instead, they attempt to manage disaggregated, unplanned, and unstructured rogue engagements, while failing to take action on the enterprise-wide programs that could boost both success and visibility.

Microsoft is one company that’s far ahead of the curve in realizing the power of the gig economy as a tool to get work done. As an early adopter of the enterprise approach to freelancer engagement, Microsoft established a Freelance Services Program in 2017.

Nihat Sengul, a group sourcing manager at Microsoft who previously worked as a management consultant at A.T. Kearney, now leads the company’s Freelance Services Program. In this episode of the BTG Insights on Demand podcast, he sits down with BTG’s Vice President of Enterprise and Corporate Development Adam Zellner to discuss his role in setting the program strategy and ensuring its successful adoption and execution within Microsoft.

Listen to the podcast to hear Nihat’s advice on how leading enterprises can follow Microsoft’s example to successfully embed their use of on-demand talent and freelancers across the organization. You can also read our lightly edited transcript of the chat below.

Microsoft definitely stands out as one of the first companies to truly embrace freelance and on-demand talent at the enterprise level. When you look at the performance of the Freelance Services Program you lead—with thousands of successful projects under your belt—it's really quite impressive. If we take a step back, what prompted Microsoft to create a formal on-demand talent program to source and deploy freelance talent?

One of the things that I really like about our program is that its development has been very organic in the sense that two and a half years ago, a group of people from different parts of the company came together, saw the opportunity that gig economy or freelance services can offer, and asked, "How can we think about this potential opportunity, specifically through Microsoft's lens and how can we think about approaching external talent from an ethical, responsible, and compliant perspective? And how can we build a platform around this so that Microsoft users are not necessarily reinventing the wheel as they would like to get involved in the gig economy?”

So two and a half years ago, this group came together and brought the fundamental pillars of our program that is in operation right now. And one of the key things that is making this program strong—and enabling it to go forward strong as well—was that back then, that initial group thought about the principles of the program as one of the first steps. And they thought about, "Okay, what should be guiding us as we move forward?

That's one of the reasons why we are seeing both early adoption and strong growth over time for Microsoft when it comes to freelance services.

That's great. Could you share some of the guiding principles that the initial group mapped out for Microsoft's Freelance Services Program?

Absolutely. There are three, fundamentally.

One is we are definitely business aligned. That’s the first principle. It means that we have a data driven approach, and we want this effort to be driven by the business needs. It's not just a theoretical approach based on potential value levers. We want to make sure that we are in sync with the business in terms of finding specialized skills for different business needs or how we can scale up and down as needed—that's a critical principle for us.

The second one is obviously we want to be talent obsessed. And when I say talent obsessed as a company whose mission is to empower every person in every organization in the world to achieve more, we want to do the same thing for our internal users too. So we want to be talent obsessed, so that first we meet talent where it is. Because you cannot assume that in 2020, where the digital transformation is happening, you cannot expect that every talent group will come and find Microsoft. Especially in a world where the talent that Microsoft is fighting for is definitely harder to reach. We want to be talent obsessed and meet the talent where they are, so we can enable our internal users to achieve more.

Of course, last but not least, we want to be in the freelance services economy—gig economy in the industry—from an ethical and responsible perspective. That's pretty critical for us. We understand the concerns around the gig economy. We understand what we can contribute to freelance services and gig economy as a big player in this field, So we want to be super mindful and proactive when it comes to being ethical and responsible.

We want to make sure that we are in sync with the business in terms of finding specialized skills for different business needs or how we can scale up and down as needed—that's a critical principle for us.
It's helpful to understand those principles. What's your role in making the program successful across those dimensions: alignment with business, ensuring access to talent against every project, and making sure that you're making ethical, responsible decisions throughout the growth of the program? What's your role day-to-day in administrating the program and also looking ahead at strategically how to grow Microsoft's role within the freelance economy?

To summarize, I do two things: think about the future of the program from a strategic perspective and be mindful about it; and secondly, think about the program itself and specific partnerships that we have in the program—and create awareness and adoption with our different partners within the company—and also think about efficiency and effectiveness of the program that we run. And when I say efficiency, what I mean is, people at Microsoft can come and open purchase orders, and they can get their stuff done pretty quickly without much friction. That's pretty critical. And also making sure that we are keeping a close eye on what the program delivers and continues to deliver in terms of the value levers that we have identified.

One of the things that I like about the job that I have right now, as I mentioned, is looking at what the future of the program can be. Can we think about different geographies? Can we think about different partners? Can we think about different use cases and how can we customize solutions for different business needs? That is definitely one of the fun parts of what I do.

We hear often that it can be challenging sometimes to help people understand where, when, and how to use on-demand talent or freelancers. What role do you play on the awareness component, and what are some of the misconceptions that have come up around how freelancers and on-demand talent can be used?

Yeah, it is one of those things that you have to be really mindful of. Many times we reach out to, or talk to our internal users to explain what freelance services is and what our Freelance Services Program within Microsoft is and how we are approaching that. But of course, when you talk to a large group of people you are getting—especially at Microsoft, because we are a microcosm of society—every combination and permutation of the knowledge level that people have about freelance services. Some people really know a lot about it, and they understand what it is, what it is not, and how our program can help or not. And in some other cases, the concerns that everyone has about the gig economy and freelance services—what it can do, what it cannot do, what it is, or what it is not—become pretty clear and guide the discussion.

So really in those awareness and adoption discussions sometimes it is very easy and immediately gets into the discussion of, "Okay, what is the business problem here?” and how one of our partners can help pretty quickly either to scale up or find a specialized skillset very quickly. But in some other discussions, it really gets into details around how our program works and what are the controls that are in place, so that no additional risk is taken, to make sure that the talent is treated the best way possible, and whatever other concerns that people might have. It is on that spectrum—the conversations differ on a day to day basis, depending on who knows what.

You spent five years as a consultant A.T. Kearney before joining Microsoft. How does that background and skill set help you in your current role managing the Freelance Services Program?

I guess I'm in a lucky position where working for A.T. Kearney as a consultant for a long time helps me quite a bit. But I guess another thing that helps me is being at Microsoft. I don't know where I heard about this, but they say if you want to know about an industry, go and be a consultant. If you want to know about a business model, then work for a company. So now I have the perspective of both, and having both unique perspectives helps me quite a bit in my day-to-day business.

The best way to explain how it unfolds is that, because I know how the consulting machine works, I can see what are the areas we can pull the levers in terms of impact. And when I say impact, I'm talking about cost effectiveness and onboarding resources. Coming from the A.T. Kearney perspective really gives me the landscape, how the consulting engagements work and where the value comes from, as well as understanding what Microsoft users are trying to get out of any given engagement. And also how they are thinking about the Microsoft constraints or opportunities. And when I say Microsoft constraints and opportunities, I mean a high-level thinking about what some of the budget constraints might be, what some of the product-related deadlines that need to be met, or any other priorities that might be out there. I am in a beneficial position to marry the opportunities and constraints, and understanding the inner workings of consulting, which then helps me to advise our internal users in a more customized fashion—and that is what the business users are really expecting.

I am in a beneficial position to marry the opportunities and constraints, and understanding the inner workings of consulting, which then helps me to advise our internal users in a more customized fashion—and that is what the business users are really expecting.
You mentioned multiple dimensions of value that can be derived from freelance engagements, and earlier you discussed the need to consider efficiencies as you build and scale the program infrastructure and user interactions. Could you explain how you track the success of a program like this, how you prioritize different facets of value, and the metrics you use?

As I mentioned, when we sat down and thought about what we want to get out of the program when it was first created, one of the good conversations that evolved into what we are tracking right now is that we said, okay, the key value areas appear to be accessing talent faster than normal—which is speed of onboarding, which we track right now. And that is basically how long it takes from the moment a user engages our program to the moment of starting to work with external talent. How long it takes and what is our improvement over time with our partners? That's one that we are tracking: speed of onboarding. The other one is obviously cost effectiveness—and that's pretty straightforward as well—and we are also definitely looking at the quality of the output.

But these are high level impact areas that we look at on a day-to day-basis. Our freelance service program is almost three years old, but in general, these programs are relatively new so we are clicking one more level down and looking at some of the operational indicators pretty closely too. Obviously we are looking at our spend, spend growth, and which are the groups that are using the program. But we are also trying to track what we call our funnel approach. From the moment we engage a Microsoft user, how long does it take to convert someone to post a job or to utilize our program.

We also look at retention. Someone might come, use our program, and then might go away, but what is the percentage of people who are staying and continuing to use our program? We are looking at those metrics pretty quickly, just to better understand how that user journey is happening from the very beginning until the end and what are some of the areas where people are dropping or not necessarily continuing.

Those are some of the more detailed metrics that we are looking into. Of course, we go even further down and geek out on even more metrics—like how long it takes a user to post a job and those kinds of things—but we are focusing on and prioritizing the key impact areas, and keeping a close eye on speed of onboarding, cost effectiveness, and the quality of work that is delivered.

It's obviously a very data-driven approach and there are multiple levers to pull. How do you see the role of a sponsor like yourself—in an enterprise role—in terms of the level of engagement with the marketplaces or platforms you might be partnering with?

Yeah, that's a great question. One of the things that I want to highlight is that the main value that a centralized program, like the one that we have, delivers to people is generating clarity. The moment we think about Freelance Services as a solution itself—as the solution—or the moment that we think about one partner as the solution to any given business need, I believe that’s not the right way of looking at things. Freelance services is a sourcing solution, and we need to contextualize things and generate clarity for the business. If you think about all of the sourcing solutions as a toolbox, freelance services is one tool in that toolbox. The role of our centralized program is really that we need to be in a position to make it crystal clear for users where the solution fits and what the value is for them—and align with what I have mentioned before in terms of cost, speed, and quality—while ensuring compliance.

For that reason, when we work with our partners, I think what is really crystal clear is that it should look like one program, not like Microsoft has a program, and within that program, they have this supplier, that supplier, and that supplier—that just creates more complexity for users. It should be there’s a freelance services program. I have a need, I can go there, I'll be served, and I am ensured that I'm compliant and I will get the best talent.

That unlocks users to come to our program and come back to our partners in that matter, because they will be like, "This is really clear for me—when to go to freelance services program and when to use them—because I'm super clear about the value levers. And I also know what their process is and how they serve me. They will take care of even which partner to go and find us that right talent for us.”

So that elimination of cognitive load from users actually gives them the biggest benefit. And that's how I see our program and our partners coming together and being harmonious rather than being seen as different players in the game.

How do you see Microsoft's program or use of freelance talent evolving in the future? Has the recent shift to remote working—as well as the current health challenges and economic uncertainty—changed the way you might answer that question?

Yeah. I guess, if you asked that question to me two months ago, my answer would have been a little bit different. But with the recent developments, I think it's going to be interesting to wait a little longer and see a little bit more. Again, my answer two months ago would be that—we see that as we inform our users better, make our program easier for them to use, serve them better, and explain the value levers better to them and in what cases it can help them quite a bit, it really makes sense and we see more and more people are coming in to at least test what the program can offer. And the word is spreading.

We are also grounded in the reality that freelance services is one solution. Going back to that point, it’s one solution in the sourcing toolbox, and it may not be the right solution for each and every case.

I was definitely observing an organic growth and better understanding and increased interest in use. With the recent developments with COVID-19, of course there have been discussions about remote work, and is this increasing the use of freelance services? People are definitely trying to get into a better rhythm when it comes to remote work itself—that is definitely what we observe—but I think to say that freelance services economy adoption, both internally and for the industry for that matter, will be accelerated, it is a little bit early to say that. It will depend on a little bit more on, I think, on what is the overall impact of COVID-19 on the economy and the increase of people signing up to be a freelancer, as well as potential budget constraints that companies might have down the road. I think it will be a combination of a few different factors to really see what is the impact of COVID-19 when it comes to adoption of freelance services.

Is COVID-19 breaking some of the barriers in terms of utilizing freelance services? I would say to a certain extent, yes. Maybe some of the people were not open to the idea or warm to the idea, saying "Oh, this is a type of work where I have to have someone with me and work with me. Or it needs to be an in-person interaction." It might definitely help to be forced to work remotely, but again, I still feel there's some time that is needed to really understand the impact. But of course we will definitely observe more closely. Down the road, I would definitely love to hear from BTG and our other partners about how the user experience and habits are evolving.

We see that as we inform our users better, make our program easier for them to use, serve them better, and explain the value levers better to them and in what cases it can help them quite a bit...and the word is spreading.

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