Chris Berry On The Net

Regular readers of this blog will recall that I was appointed last year to serve as a member of the Board of Directors of the Economic Development Authority for the City of Roanoke. I joined the body in the hopes that we could take a proactive role in shaping the economic future of our city, and of the region as a whole. To that end, I put forth a proposal at our April meeting that I believe would provide a significant boost in our efforts to attract and retain skilled professionals in a variety of career fields.

Since the initial presentation in April, I’ve had the chance to discuss my plan with economic development officials from Roanoke City, Roanoke County, as well as the leadership of the Regional Partnership and the Roanoke Regional Chamber of Commerce. On Monday, I had the opportunity to share my proposal at a joint meeting of the Economic Development Authority and the City Council. I’m working to arrange a meeting later this month that will allow all of us to discuss the concept in greater detail and determine the feasibility of the plan.

In preparation for that meeting, I would like to get as much input as possible from my readers. Please take a few moments to look over the following plan summary, and share your thoughts in the comments. I need your ideas, suggestions and constructive criticisms.

Introduction

In his book, The Rise of The Creative Class, regional economic development expert Richard Florida stresses the point that creative class workers are unlikely to migrate to an area on the basis of a single job opportunity. Instead, they seek out those localities that provide access to the widest range of career possibilities. The regions that are most successful in attracting the creative class are the ones that offer the greatest variety of Plan B career alternatives. With the exception of the healthcare sector, the Roanoke Valley simply does not provide the range of opportunities needed to attract creative class professionals in numbers required to sustain a critical mass.

The changing nature of the relationship between employers and employees adds to the challenges we face in attracting and retaining members of the creative class. Workers in virtually all fields change jobs more frequently, and the expectation of job security has become an antiquated notion. This lack of security makes the availability of alternative employment options all the more important in our efforts to create a more robust regional economy.

In addition to frequent job changes, current trends indicate that younger workers will actually change career fields between three and seven times. Many of these changes will be involuntary, resulting from downsizing or obsolescence. In between jobs, an increasing number of creative class professionals will find it necessary to work as independent consultants or freelance agents on a temporary basis. This will be especially true during periods of declining economic activity such as we are currently experiencing.

While some of these people will ultimately decide to stick with consulting work for the lifestyle advantages it offers, the majority will continue to prefer the security of full-time employment. These people will move in and out of the freelance market on as needed basis at different times in their careers. The challenges they face will be daunting, and the resources available to assist them are limited. By providing a mechanism to assist these independent consultants in their efforts to connect with potential clients or employers, the Roanoke region could benefit in many ways.

The following plan proposes a public/private partnership between the City of Roanoke, Roanoke County, local business and economic development organizations, and the consultants and freelance professionals living and working in the Roanoke Valley. The ultimate objectives would be to prevent the outward migration of skilled professionals from the area due to job loss or lack of opportunities, and to make the Roanoke region a more appealing career destination for creative class professionals seeking to relocate.

Challenges Faced By Freelance Professionals

We tend to think of freelancers as being engaged primarily in fields such as journalism or graphic design, but the realty is that independent consultants can be found in virtually every profession. Regardless of their occupation, they face a wide variety of challenges. The knowledge and skills required to perform their primary job functions are only a fraction of what they need to become successful independent practitioners. In addition to a mastery of their billable skills, they must also be adept at marketing, self-promotion, networking, bookkeeping, collections, and more. Lack of these secondary skills is a major obstacle to success for most independent professionals.

Limited financial resources are also a major problem. People tend to enter the freelance market after the loss of a job, and they often lack the start-up capital required to equip an office or to advertise their services. As a result, many would-be consultants simply give up before they ever get started. Others remain underemployed for extended periods.

The market for connecting independent professionals with potential clients is highly inefficient. Not only do the majority of consultants lack the talent and resources to promote themselves effectively, but clients in need of freelance services often have no idea where to find qualified practitioners. Developing a mechanism to streamline this connection process would provide substantial benefits to the regional economy.

Roanoke Regional Freelance Cooperative Plan

This plan envision a public/private partnership whereby the City of Roanoke, Roanoke County, and a variety of local business and economic development organizations would assist in the creation of a central clearinghouse for local freelance talent. The key elements of the proposal are as follows:

• Marketing Co-Op: Freelance professionals typically have very limited resources for self-promotion. The plan calls for the creation of a marketing cooperative that would allow members to combine their resources in a manner that will draw significant attention to the organization. The objective would be to create awareness of the co-op as a one stop source for regional freelance talent. Whether a business was in need of an IT consultant, a web designer, a human resources professional, or a technical writer, co-op members could achieve first in mind position through their combined marketing efforts.
• Online Job Board: A private internet job board would be the primary method of matching co-op members with potential clients. Modeled after the Elance.com concept, clients could post project specifications and search for qualified talent, while freelancers could find projects that fit their skill sets and submit proposals for work. The site would contain a complete directory of co-op members organized by professional specialty, along with portfolio pages that would allow members to demonstrate their expertise.
• Shared Meeting Space: Freelance professionals sometimes face a credibility challenge brought on by the fact that most work out of home offices. This is not a problem under ordinary circumstances, but client meetings and group presentations are a different story. A coffee shop is not the ideal venue for a business meeting. This plan calls for the creation of a small shared office suite that would be available to co-op members on an as needed basis. The space would consist of a conference room, one or two private meeting rooms, and a small number of temporary workspaces.
• Structured Networking: Regularly scheduled networking events for co-op members would be an integral part of the program. These networking events will provide members with the opportunity to exchange leads and form collaborative partnerships to take on larger projects.
• Director: The cooperative would have one full-time employee to serve as Executive Director. This person would handle the day-to-day administration of the co-op, and serve as the liaison with the local business community. Major responsibilities would include membership recruiting and promoting awareness of the resources available to businesses in the Roanoke region.
• Governance: The group would be governed by an elected board composed of co-op members. In addition to this governing body, a marketing committee would be responsible for the creation and execution of a comprehensive advertising and marketing strategy for the group.

Benefits To The Freelance Community

• Creating a network of independent professionals in a variety of fields will ultimately lead to the formation of partnerships to take on projects that are beyond the capability of a single practitioner. Some of these joint ventures will dissolve as soon as the project is completed, while others are likely to form the basis for new business start-ups.
• The publicity generated by the joint marketing efforts will ultimately give co-op members exposure and access to clients beyond the Roanoke Valley.
• Participation in the co-op would allow temporary freelancers seeking full-time employment the opportunity to test-drive potential employers.
• Sufficient membership in the co-op will allow participants to pool their resources to qualify for group health and other benefits that are typically beyond the reach of most freelance professionals.

Benefits To The Business Community

• Local businesses will be exposed to a wide range of professional services that many were previously unaware of. This will be particularly beneficial to small businesses, many of which never consider the possibility of utilizing freelance practitioners.
• Taking on new employees is a risk for any business, regardless of the current state of the economy. This plan would allow employers the opportunity to test drive potential employees before hiring.
• Freelance professionals typically charge hourly rates that are several times higher than the cost of a full-time employee to perform the same task. This is necessary to make up for the large amount of non-billable time they must spend on promotion and prospecting. Membership in the marketing co-op will allow members to dedicate more time to billable activities, and to offer their services at reduced hourly rates. Clients will obviously benefit by having access to a wider range of services at a lower cost.

Benefits To The Region

• The freelance co-op will serve as an incubator of sorts to generate new business ventures.
• The co-op can help to reduce the number of creative class professionals who leave the region due to lost jobs or lack of opportunity.
• New businesses will be attracted to the Roanoke Valley by the availability of a wide range of affordable freelance talent. This will be particularly attractive to start-ups that lack the resources to hire full-time employees.
• The co-op will help to reduce the number of independent professionals operating in the shadows without proper licensing.
• The plan can help the Roanoke Valley to become a haven for freelance professionals, and it can provide the necessary Plan B career alternative required to attract creative class professionals from other regions.

Financial Projections

Based on very rough back of the envelope calculations, the startup cost for the project would be in the range of $100,000.00 to $175,000.00. This includes creation of the website, leasehold improvements, furnishings and equipment, Director’s salary, and a substantial initial advertising blitz.

Operating costs would consist mainly of advertising and marketing expenses, Director’s salary, and rent. Based on very rough initial calculations, annual operating costs would range from $125,000.00 to $200,000.00. While some annual subsidies may be required in the form of grants, it is anticipated that the bulk of the operating costs will be paid with membership dues after the initial start-up period.