Top 3 Concerns When Managing Your Extended Workforce in 2020
The extended workforce consists of your 1099 contractors. In your industry they may be considered contingent workers, on-demand workers, or freelancers. These all factor in creating the gig economy.
2019 saw the highest growth in the gig economy than any year to date, with the Global Gig Worker Index Report finding that American freelancer earnings grew by 78%. And this trend does not show any signs of slowing down. Business software provider, Intuit, and Emergent Research have predicted that “the number of people working on-demand (gig) jobs will grow from 3.9 million Americans in 2019 to 9.2 million by 2021.”
Advances in technology that enabled enhanced communications between employers and workers, along with the “Great Recession,” causing businesses to look for ways to meet demand while reducing costs, has driven the adoption of gig work. And it is no surprise that the trend has continued so far, with 70% of businesses stating that in developed countries directly attributing gig workers to increased productivity and profitability.
Why Gig Work?
The 2017 Workforce Productivity report had some interesting statistics. A recent ADP blog reported that “83% of business leaders believe contractors are more productive than employees, and an overwhelming majority (82%) of leaders surveyed agree that productivity is one of the top indicators of financial success or failure.” But what is the driving factor behind the move to using an extended workforce?
In our whitepaper Navigating the Perfect Storm, we share key areas that are contributing to the remarkable growth. They are:
- Customer pressure
- Competitive threats
- Shrinking margins
- Talent shortages
- Vendor requirements
With this in mind, we're projecting the top three common concerns when managing an extended workforce.
Top Three Concerns When Managing an Extended Workforce
1) Total visibility in data and spend.
Properly forecasting and predicting freelance and gig worker spend tops the list of the biggest trends in freelance management. With more businesses embarking on a freelance worker strategy to streamline their operations and increase their efficiency, a focus on showing the value of this strategy is emerging.
If this is your business, here are some great resources to get you started:
- Do You Know What You've Spent on Freelancers This Year?
- Are You Properly Forecasting Your Freelance Marketing Budget?
- Are You Properly Forecasting Your Freelance Translation Budget?
2) Automation around the processes of the Extended Workforce is the word of the year.
Countless hidden fees can be found in manual processing, hours that your staff could be working directly on generating more cash for your business or working with customers. With freelance management software, businesses can more efficiently sell, service, and innovate.
But don’t just take our word for it, read more from these innovators:
- Automating Manual Processes to Become a Multi-Million Dollar Enterprise: The Mega Services Story
- 10 Quick On-Site Automation Examples That Deliver Faster Work Outcomes
- Eliminating the Swivel Chair: The ROI of Automation
3) Compliance (and not just in California).
The growing demand for gig workers has also led to a rise in state legislation surrounding the classification of gig workers. Laws like AB5 in California have created confusion surrounding just who is a gig worker and who is an employee, and businesses will look to mitigate the risk of misclassification.
Check these articles out and learn why misclassification can have significant risks to your business:
- 11 Consequences of Misclassifying Your 1099 Contractors
- How One California Company Adjusted to New Freelance Ruling
- Here's How Not to Get Fined $25,000
The Gig Economy: Stronger than Ever
Estimates shared by ADP are that 53 million Americans are currently participating in the freelance gig economy in some capacity, contributing over $700 Billion dollars to the US economy. Contributing to this sharp growth are freelance management systems, enabling businesses like yours to streamline recruitment, work history, contract management, payment, compliance, and classification challenges.
Are you one of the many corporations in America that have realized the greater efficiency and productivity of utilizing a gig-workforce?
Wanna learn more? Check out a demo and see why WorkMarket's freelance management system is the industry standard when managing an extended workforce.