One of the most frequent conversations I'm having in my agency group and with my private coaching clients is around talent or, quite frankly, the lack of talent right now. And therefore there is a need for us to find more creative ways of finding good people. And of course, one of those ways is finding great freelancers. So that's the topic for today's podcast. And I am really excited to be joined by Shahar says who is the co founder and CEO of Stoke and on demand talent platform empowering companies to adopt a hybrid workforce model that scales as quickly and efficiently as they needed in 2021. Stoke was acquired by five or for $110 million just 15 months after coming out of stealth mode.

So that is super impressive, and I'm really interested to dig into that a little bit later, I'm Rob Da Costa, and this is The Agency Accelerator podcast. As someone who has stood in your shoes having started grown and sold my own agency, I know just how it feels during the ups and the downs of agency life. So this podcast aims to ease your journey just a little by sharing mine and my guest experiences and advice as you navigate your way to growing a profitable, sustainable and enjoyable business.

Welcome to the show, Shahar. I'd love to hear your view on the state of the market for good creative talent right now in 2022. First of all, thanks for having me Rob. It's great to be here. I think the state of talent when we founded the company back in 2018-2019. Sorry. We did the research in 2018. It was already evident that were there is a significant shift happening in the market. And we're transitioning from kind of searching for, conceptually employees or, you know, a long term engagement to more skilled based engagement.

And we kind of got into kind of the early 2020 with some kind of a perfect storm. There were multiple forces shaping what we're now seeing in the town market. First and foremost. You know, companies and agencies need to adapt faster. The type of skills that companies and agencies need, is constantly changing. So if you go back, marketing agencies, media agencies, 15 years ago were looking for, online marketing was a function. No one's looking for online marketing anymore. Right? Online marketing is like 15-20 different people because you're we're almost in an era of sub residencies, right?

Everyone is a specialist in, you know, in LinkedIn or Facebook or Instagram or Tiktok or Video graph for content, right? It's like there's so many different skills that you don't want one stop shop. One person that does everything in mediocre at everything you want. Great people, each of these. So that was a significant trend. Number two again pace of change. And on the other hand, on the talent side, if you will, first and foremost, people didn't want full time, long term engagement anymore.

So in a research in 2018, we already saw that 45% of Gen. Z for those who don't know born between 1995 to 2005. Sorry, 45% of them are in the United States. High schoolers back then said they will never take a traditional job. They want flexibility. They want a different social contract. So, employee tenure has dropped to an all-time low below two years on average, sticking to a single company. And third, people again, one of this flexibility and remote work. Even before covid. Right, we started seeing this trend of digital nomads before covid.

Obviously, covid is accelerated, but it happened before, and so I think we're kind of in this significant, workforce revolution, probably the greatest that we've seen since the Industrial Revolution over 100 years ago, in which employment is skill-based, shorter-term project-based. And that should lead to a lot of significant decisions and how you build an organisation and DNA that can cope with these changes. And so, generally speaking, yes, there is a lack of talent, but not really as bad as most think about it. I just think that most people are still trying to find talent the way we thought of talent five years ago and not how talent is evolved to become.

I mean, I think that's a really good observation. Do you see this trend? I guess the answer is probably yes to this, but do you see this trend continuing in the next few years? so forecasts are again pre-covid that by 2030, 60% of the workforce will be freelancers. There are researchers out there. The forecast had this before. The trend has been continuing for the past 20 years, so it's not just the last 23 years it's been going on. By the way, if you think about it, this is how people used to work.

Before 100 years, people worked. If you show up for work, you got paid the same day. If you didn't show up to work, you didn't get paid. And somewhere in the 19, the 20s, around the great recession, countries have realised that, if there is a recession or anything, they can support their citizens. So they legislated Social Security and things like that to be able to pay and then what we now call employment emerged. Now we're back in a world where people want to get paid for what they know.

People want to work remotely. People want to have multiple employers. More work can be done remotely, so you don't have to show up at the specific location I can work for a company that's a block away and then provide consulting services to a company in the United States at night and tomorrow morning spent some time with a different company. So this diversification is happening. Is it going to continue? Yes, I think one of the biggest challenges. And by the way, we see it with small companies.

Agencies are kind of built on that model, right? You have a project, you need people. You don't have a project. You don't want to pay salaries because it's like your margin-based business. I think the biggest gap right now is how companies can evolve because the largest employer, obviously our corporate and they're still having a hard time going through this shift because, you know, I'm 75 born. I'm 46 years old. And I got into the industry in 2000, and I was trained throughout my career on How to Hire full-time employees.

This is what I was trained to do, how to interview them, how to qualify them, how to do performance reviews, and how to give them married increases. This is what I knew. Now, when someone tells me “We'll start working with freelancers”, how? Where do I find them? How do they interview them? How do I know they're great? How do I know they're going to stick around? So I think there's a mental shift. It's a lot easier for Millennials and Gen Z people like us. It's a little harder, I guess.

I'm a lot older than you. I'm a bit just about a baby boomer, I think, on the cusp of exchange and baby boomers, I think it's a really good shout to say that perhaps there isn't a lack of talent. It's the way people are recruiting. I think that's a really good observation. So tell me, how should people be recruiting now? Given that they're telling me, Hey, Rob, we're struggling to find good people. What should I be telling them? Well, I think there's a couple of elements of that equation.

First of all, the biggest barrier that we're seeing in 90% of companies that we interact with first and foremost is a mindset. Open up to that and by the way, most people we talked to them are kind of, said I'm looking for a full-time employee. Well, if you find a freelancer, that's okay as well. It's like, No, it's like you got to treat it as a strategic element of the company to start building a flexible backbone. And, what we call the Italian cloud to start pulling in resources constantly be recruiting.

When I was when you're in a growth stage company and there's enough cash in the bank, there's this element. Always be recruiting for funds. Always be recording for great people. Always have an open headcount because you don't know when you're going when you're gonna need that person is gonna be too late is gonna take you 6 to 9 months. Always be recruited. Always build out your freelance database. And change them, when you're onboard a freelancer when you're opening up to that idea, I understand that, freelancing is like going out on a date, right when you're going out on a date, you're not committing to marrying anyone or having kids together, You kind of thing, you know?

Let's figure out if we can survive this dinner, and grab a drink. And if we like it, we'll have another date then another day. And then maybe at some point, we'll move in together. When most of us are under the mentality, when we hire full time employees that after four dates, we've got to get married, right? It's either we get married or we separate, and in freelancing. And the companies are doing it well, really have an open mind that says, If I need something done, I'll find a freelancer.

If it's a short term project, or maybe it's a long term opportunity, but treated as a short term thing, I'll give them a small task to do. I'll see how they worked. I'll see how my communication with them works for works well will continue, and I'll have more jobs for them over time. And if it doesn't the hard feelings there is. Yu don't have to fire them. You don't have to go through a jar. It's like, no new project for you. It's all good.

It's always an expectation, one of the companies that does it very well. By the ways automatic, the company that developed WordPress, they have it's public on their website how the process works. So if you want to work with road WordPress like you know you're going to have an online interview, by the way, now they do it through chat, which I find super challenging. I don't know how they interview over chat, but they do, and if you go through that, you'll get a two week project during the tour project Small project.

You know you're gonna get paid for it. It's not going to get paid for the project. In the end, the project that people who worked with you, we're going to meet together and say, Did we like working with him? What's his professionalism level? do we think he can be successful if the answer is yes, you're gonna get a two months project, same thing, and at the end of it, now you become a regular contractor for the company. Now every company can have a different process, but the mindset is more of an on job qualification.

We're not going through months and months of interviews because interviews are not great indicators. By the way, there's stats, and I'm not sure I can back those up. But there are stats out there that say that 30% of employees quit within the first three months or something of that sort, which is insane. The amount of money and time you spend on interviewing someone. And then you find someone that either didn't want to work for you or didn't. You didn't want them to work for you anymore. It's so costly.

Use that energy. Just get people on the job. Let them do some work, figure out how it works. And then, start running with him. I would add to that what we are seeing with freelancers and companies are adopting this. Freelancers are an acceleration to how the company operates. And people don't think about it often the right way. Freelancers are working for, You know, I don't know. We don't discuss your career, Rob. I was trying six different companies throughout my career. That's my you know, 20 years.

Six companies, give or take. Freelancers work for five companies here, sometimes two, sometimes three. So when they're coming to you, they have a significant, database of knowledge. They've seen how companies work. They know how to hit the ground running. They know how to interact with in your company again, some better than others. They're not all the same, and that helps the company significantly learn what other what worked well in other companies. What failure to other companies. So you're literally pumping up knowledge and capabilities into your organisation when you adopt that approach.

That's so good. I acknowledge with my hands in the air that I might need to change my mindset a bit about this. So my next questions might be a bit of an old paradigm thinking. But so, first of all, how do you stay profitable when you're hiring freelancers, which potentially cost more than the equivalent full time person? I think, I don't know if it's the wrong thinking. When you're looking at the biggest motivation to hire freelancers. Money saving is number five on the list.

It's faster time to market operating at full capacity flexibility in the organisation. There's a lot of different reasons financials are might be a reason, but it's not deleting one. Generally speaking, I am almost, impartial about the cost of freelancers. Generally speaking, some of them will be more expensive. Something will cost less. But the thing is, if you're right, size the project to your budget. You're able to do that with freelancers, which you can't with employees. So the way I started with Stoke, what do you cover it?

But I was working for the company. I was acting CMO for a company and I took over the team there. I think we're 10 people in marketing back then, and marketing was, I give it a B minus back then. You know how the execution level, and I want to do some things and, you know, I found like, this is the team I have. It's like, you know, taking a football team and saying, we got to win. It's like these are the 11, you know, players you have on the fields like this is what you got to do with, and I realised that there's no way to make any significant change.

So things was week one or two on the job. I laid off half the team. I fired half the team, and with that I had I think it was $700,000 now made available because I did have a head count anymore, and I deployed all the dollars into freelancers, and within three months, I tripled all of the previous years. Leads. And it's not because of a great market here. That wasn't the case, but I was able to take those $700,000 and get, you know, an expert SCM person for two days a week and SCO person for one day a week.

Someone to clean up our email, and email templates, and someone to clean up our sales force designers to concentrators like I got people in right-sized to what I needed. I don't need a full-time CEO expert. I didn't have that much to do, but I wanted someone to do it right one day. A week was good enough for me, and so, from a budgetary perspective, it worked a lot better for the type of business in Iran, for agencies, which I know are some of the subscribers on this.

I think for agencies it's a lot more efficient because, at the end of it, this is your running project-based, everything is project-based so you can keep your margins. So you have a margin for a project of a target margin. You know how much you want to put into a project, and you can track that constantly. If you have any employment line item, it doesn't matter if you have fewer or more projects. You're still spending the same amount. So I think one of the mistakes in terms of a mindset and an approach that I'm making some of my audience makes is that they are trying to hire a full-time role.

They can't find a full-time person, so they then look for a freelancer. What they need to do is start looking at the projects and the specific things that they have and are hired to fill those projects. I guess that's the big marketing shift and what happens over time. It's not what happens. It doesn't happen overnight, Is that at some point you're gonna have a database of, you know, agencies land. You know SEO people and might be video artists and, photographers. And you have this database.

And then when a project comes, you can pull out of the database was available now and kind of right-size them to the project, and then it helps you keep that track. What we're seeing, one of the mistakes is people are kind of saying, when I have a need, I'll go find someone. Guess what? when you have a need doesn't mean they're available. So you constantly need to take care of this. It's like having a podcast and only airing when you have something important to say.

So when you have something important to say, no one's going to come to listen to your podcast because there is no continued. Good comparison. What about a cultural thing? Because sometimes people have struggled, and by the way, I sound quite negative. But I'm not about freelancers. I'm just kind of posing these challenging questions. What about cultural fit? Because sometimes people struggle with freelancers because they've got their agendas, their visions for their own freelance business. When you are an employee, you're looking for someone who's gonna be a good cultural fit, hopefully, grow with the business.

How do you manage those two things? So I think the cultural fit is true in both employment and freelancing. Obviously, there are a lot of shades of great freelancing. So I have freelancers here in my company, by the way, were 30 people company. We have almost 40 freelancers we work with. Some of them are showing up at the office three times a week. Some of them I've never seen. Some of them are here for a two-week project. Some of them we worked with for the past six or nine months, right?

And so it's not one size fits all. You got to fit into what you need. So if it's someone that you want in the office then the cultural fit is super important. If it's someone that's an expert, I'll give you an example. Someone's doing podcasts, right? It's like I'm recording a podcast for someone that's editing. I haven't actually had an agency that's working with us and helping us schedule these podcasts as an example. I don't need a culture filled with them, right? It's like there it's a pure business relationship.

They're not in the office. They're not showing up in the all hands. I'm not doing a performance for wisdom. Keep it loosely coupled. If it's someone that's part of the team, then it needs to be part of the team. It needs to help drive efficiency. It needs to still be fun to work with them. All these things, but again, it's on the job evaluation. I think it's very difficult. People are. Have we given too much credit to the interview process of full-time employees? When you meet someone for four sessions, 45 minutes each?

Do you actually think you know how they're going to be in the day to day work? When things when hits the fan when things go south, you don't know it's the same thing. Freelancers actually give you that opportunity to learn through the job. And the second thing I will tell you is one I'm afraid of. He told me once, that when Harold when I hire an employee, they're committed to the company and they're part of who we are and so I can trust them so you got it backwards.

A freelancer will always show up and work hard because they know if they don't, they're gone the next week. They always have something to prove. I've seen I've worked with corporate and mid-size companies. There are so many people that are complacent because you know I'm here. In the mid-range of execution. There's no real reason for me to work super hard. That was going to fire me. Freelancers are constantly pushing towards execution. There's endless research. Is that show that they are more up to date in skills and higher and more engaged in execution.

That's so true. And absolutely agree. So talking is sort of managing freelancers. How? And I think you touched upon this a bit already. But how do you manage? How should you manage? If you've got a freelancer today doing two days a week for you on an ongoing basis, how do you manage them differently or the same as an equivalent full-time employee? So there are a few different elements. First and foremost, there's what do you find them? How do you onboard and what's onboarding a freelancer means, you need them to sign legal documents.

You want to make sure you own IP at the end of the engagement, you want to make sure you're compliant with GDPR. So they can't access things. They shouldn't be there. There's a bureaucracy that needs to be handled right. Then there needs to be, how do you track budgets and payments? So employees get paid on the same day every month or twice a month. Depends on how the company operates. And usually, managers don't care about not don't care. In the men, they don't care.

It's like they don't have to worry about it. It just happened. They get their paycheck. Someone needs to make sure they got paid because they're sending an invoice. Finance needs to process it. And we all have been through the process where I was on, a freelancer says. I didn't get paid this month, and all of a sudden the invoices are stuck somewhere, and someone is trying to stall the payment to, I'll pay you to know, 30 or net 16. All these. So there's something there in the process.

You want to track your budget because usually, you get a freelance budget. You have the budget, you can do more you don't have the budget, you have life. So tracking that, and then there's everything to do with a relationship with the freelancer around compliance because there's more and more legislation in the United States. There's a B five in the UK. Now there's IR 35 in Australia. There's legislation. How do you distinguish between an employee and a contractor or freelancer? So you don't get end up getting sued for taxes or whatnot?

So that's important. And then beyond that, you treat them just like anyone else. I mean, they can join your team meetings that can give them feedback. You don't give them reviews. You don't force them into a schedule, because again, this falls into compliance. But, we work with our contractors. Freelancers, just as we do with anyone else again depend on the job they do. And, I guess the fairly broad question. Do you recommend paying freelancers based on a project or paying them on day rates or hourly rates?

Or so, Generally speaking, I'm a very big fan of paying for delivery. I think it's the clearest, but I do recognise it. It's not always an option, right? So someone gave me, we have these debates here as well. Should we force the market into a project-based this project basis? A lot clearer. I was like, Let's assume, you know, Rob, you're hiring me as a freelance consultant on how to grow. You know, the list of the audience that you have. What are you going to pay me by the amount of advice that I give you?

It's like was it's very not. Everything can fall into this project model. So some things are still kind of daily rate, hourly rate. But again, I think this is where part of building a flexible workforce means you can hire people based on the need and decide on payment terms based on the project. I had a story of a client who hired a copywriter and gave them a very clear brief. The copywriter was charging by the day. They came back at the end and delivered the work and said, Look, I've gone way over the days that you paid me, but I'm not going to charge you.

The client read the copy and it was terrible. And so there was a different kind of view of the world from both sides. So, that's a great comment because if it's the first time you're working with a freelancer and you don't know their style, make sure you break the project into smaller tasks and milestones. I want to see a drafter after two days just to get a sense of direction. You're gonna add it or create some style guides or icons for me.

I want to get the first three after making sure that in the relationship you're kind of structuring it to the smallest size of the project you can to start getting a sense. Is this heading in the right direction? Because the last thing you want to deal with is his frustration on both sides like this is what I understood. This is what you said. Once there's trust, then everything. He's okay because you can trust them. But up until that point, make sure you break it down to the smallest milestone you can to gain that confidence.

It's a great comment. So one more question before we talk a bit more about Stoke if I am listening to this podcast and I'm nodding my head, agreeing with everything that you're saying. And I'm thinking I've tried all the normal channels to find this freelance poor, but I'm struggling because they're in demand at the moment. What advice would you have about that? First of all, I doubt anybody tried all because there are about 1000 marketplaces there, so it's pretty much impossible.

When we build Stoke, we didn't build it with, kind of saying, Hey, we're gonna build our talent pool. And we're going to have a better talent pool than everybody. Everyone saying the same thing. We build Stoke as a platform for companies to manage first and foremost the freelancers that they find and manage 90% of freelancers within companies were I joined the company through word of mouth and not through any platform. And so we said first will help you get all these people that came in through word of mouth and build this talent cloud.

And then when you're searching for talent, were not going to build our own talent pool, We're actually going to integrate with multiple marketplaces. So you don't have to care if that talent was registered on Platform A, B or C. All you need to carry is that you'll get the right talent to fit your needs. My most important advice is, if it's a small project, take a risk. Small project for $200. You know, when I started the company and I need content writers, I put post $450 for $500.

Blog 500 word blog post. Give it to three different freelancers, saw three different styles. Pick the one that I want. And, yes, I ended up spending $300 on people that I never worked with was worth it to find the person that wanted 150 bucks. You're going after an engineering project that you're going to spend $100,000 on. Obviously, spend some more time talking to them, interviewing them. Again, spending time to understand how you want to hire them? and how you want to work with them? The most important thing is start building your pool of talent and managing that pool of talent more than anything else.

Good advice. So let's talk a little bit about Stoke talent. So I am interested to know we'll obviously share with the listeners about what Stoke does. But also, I'm interested to learn more about the recent acquisition by fibre. And was that always in your plan when you started the business? No, obviously not. I never thought I'm going to sell the company, so quickly. We just raised our around three or four months before we get acquired. So obviously that wasn't the plan. So we build Stoke with the understanding that in order for the gig economy to become mainstream, corporate will need to adopt it.

And for companies to adopt it will need to build a platform that's not behaving like a standard marketplace. When you swipe your credit card and someone does your kid's birthday video as you know upwards and people per hour and fibre and it's like, how do you build a platform that's ready for serious use if you will, and that's what we build start building with Stokes. It's really about meaning that the company's needs, it's like teams and departments and approval processes and budget management and building your own personal Italian cloud and internal reviews, things that don't go outside and processing payments in a different manner.

It's really fitting to how companies think. How do you manage multiple projects? We have companies managing their clients within Stokes. How to make it out to fit it into that paradigm. How to control expenses because it's difficult to control expenses with freelances, you almost need a full-time finance person. We have an agency just now onboarded two months ago and saved $8500 a month because they had a full-time person just tracking all the various invoices from the 50 freelancers to work with.

I started the company and I thought it was going to be a long journey because the market was very early days. I mean, most companies were still not looking still aren't looking for freelance management systems. Covid obviously has accelerated things, and I met the five or team multiple times. They're down the street from where our office was and I consulted him a few times. The industry where things are heading towards and so forth.

And lest August out of the blue, they called us up and said “Hey, we think that the market is maturing in the direction you guys have been talking about. Businesses will start adopting future work is more reliant on freelancers. We want to accelerate our penetration into the market. What do you think about us acquiring you? So, my first reaction was we just raised $15 million. We have enough money in the back, were not in hurry to sell, but a fibres, great company.

Let's have a conversation and be if we can work out what the day after it looks like and we can work out commercials. Then I'm obligated to build a successful business. Not and so what's in the future. Do you know what the future plans are for stoke and how fibre might use you? So obviously fibre is super successful. I'm still,  I hope the achievements this company has been able to create and their market penetration and the volume that we're seeing, and the type of companies are using them.

But the company has generally focused on fibre. Generally spoke, focused on small-medium businesses. Solar preneurs. That's been the focus. Our focus is more beat to be upper up the stack. Companies with hundreds of employees, a few 1000 employees. And so obviously there are a lot of synergies. Their talent fibre has a great talent pool with an application for Corporates. And now we're starting to build this B to B business. Obviously, we have a lot of strong assets that will allow us to go together.

Right now, we're keeping Stoke as a standalone company within the fibre. So were five of our own. But we are maintaining our plans for 2022 while starting to build these synergies with the fibre marketplace. Exciting times and what you say. What a great fit between the two businesses. I've used fibre many times for doing various things along the way and found the good, the bad and the ugly from hiring people on there. So, I think with five, if ever you there was that added.

You get what you pay for it. It's a very clear project-based delivery 100%. I think five represents very well how to do this in project-based. I think when you're getting into longer-term engagement, it becomes a little more complicated. We could talk for ages about this. It's such an interesting and important topic. I'm just sitting here thinking I need to share this with my private clients this interview because so many of them, I think always in the business world or specifically in the agency world, the top two conversations are around new business and talent.

And I think in the last 18 months they switched to be talent first, business second. So it's such an important we have. We have a large agency or a mid-sized agency in Germany. It completely flipped their business small. Since starting work with us, I think was last November, October 2020. Covid lead agencies into, what do we do now? How do financial? How do we run the business? and it flips. They start working with freelancers relying on us, and they kind of the way they said, the stock has become our secret weapon.

Because now we are far more efficient. Was right sizing to project our margins have improved our operational efficiencies in Princeton. But it requires a decision. We're going to go after this thing. Good. Well, listen, let me ask you the same question. I ask all my guess, which is if you could go back in time and give your younger self just starting in business, a piece of advice. What would it be? I'd say two things. Number one is always been networking.

I think one of the things that I didn't do well as a younger self was, not investing in connecting and opening. And when I say networking is not going out for cocktails and meetups only for that it's really about networking. To learn how other businesses operate, learn how other people have succeeded and failed and learning through that, and the second, it's probably related. Is how to, I'm going to say a personal brand. Although I think we're overly using the term personal brand these days.

It's not about being vocal and putting yourself out there. But investing in who you are, what it is you know how to do. What do you want to place yourself? I think it's super important, but by far open up, meet up with people, take risks, meeting up with people. By the way, that's one of my biggest learnings at Stoke. I was complete opposite than how I behaved 10 years before that, every meeting that someone wanted to I took every meeting. I got every meeting with any person.

And 80% island were successful, successful in learning 90 successfully closing a business, and 20% worse were a waste of time. But you got to embrace that waste of time as well, because you learn something there, don't you? So, about that, I mean, that's why I love doing this podcast because I learn from people like you every single day, which is fantastic, and it just helps me change my mindset in my view of the world, which in turn help my clients. So if people wanted to find out more about you and about Stoke, where would be the best place for them to go?

Where at stoketalent.com. So you can your more than happy to check us out, have to jump on a call and and run a demo whatnot? I'm mostly in Lincoln. Dzhokhar is feel free to reach out. If I can help with anything, provide any advice? By all means. Fantastic. Well, I will share both of those links in the show notes and congratulations again on the cell. And thank you so much for joining us today and sharing your wisdom with the audience. Thank you.

Thanks for having me, Rob.