Freelance Human Capital: A Firm-Level Perspective

Firms have been increasingly hiring “freelance” human capital to perform contracted work for them. We define freelance human capital as highly skilled individuals who provide contractual services to firms on a short-term basis. In this chapter, we analyze the challenges and opportunities for firms when using freelance human capital. We address questions such as how firms can utilize freelance human capital to develop and improve their performance, how firms can limit the mobility of freelance human capital in order to sustain a competitive advantage, and how firms can manage a workforce that includes both permanent human capital and freelance human capital. We draw on the theories of strategic human capital, resource-based view, and transaction cost economics to understand the firm’s perspective on hiring and managing freelance human capital.