Are Your Workforce Solutions Ready for the Freelance Boom?
The numbers are staggering: More than one in three US workers — that is, a whopping 53 million Americans — are currently freelancers. That explosive growth, which has transformed into a $1 billion industry, shows no signs of slowing down. In fact, by 2020, experts predict that 1 in 2 American workers will spend at least part of their working hours as self-employed, independent professionals.
The question every HR and procurement exec should be asking: are your workforce solutions ready for the freelance boom? Are you armed with all the information you need to handle cost and compliance issues that may arise? Can you efficiently scale a workforce of 1099 contractors – something today’s most competitive businesses are already doing.
Playing Contingent Worker Catch-Up
There are plenty of proven benefits to using freelancers that directly affect your company’s bottom line. You can quickly fill talent gaps, improve financial flexibility and penetrate new markets. But embracing a variable cost model and moving away from fixed labor costs doesn’t just happen by wishing for it.
If you’re currently struggling with how to best manage — and more importantly, scale — your freelancers with your existing workforce solutions, you’re not alone. Some of today’s biggest brands are facing a similar challenge. Their existing talent management infrastructure, Human Capital Management (HCM), simply isn’t designed to manage a huge pool of 1099 talent.
Today, most businesses are still using spreadsheets or other manual processes to manage their contractors. Many of them spend hours tracking down contractors. Other send a multitude of emails to contractors in an effort to verify work quality or submit payment. That approach is not sustainable to scaling a contingent workforce, the true key to capitalizing on the on-demand labor economy.
Upgrade Your Workforce Solutions for Freelance Success
Any company deploying an independent workforce, especially one at scale, will quickly discover a number of challenges in efficiently managing that talent. There are procurement and compliance issues, not to mention a healthy dose of complexity (the workflows required to manage non-employee talent differs considerably from that of a W-2 employee). Increased IRS oversight is also clouding matters as the government continues to tackle the hotly-debated worker classification issue (“W-2 employee” vs. “1099 independent contractor”).
Effective freelance workforce solutions also have to wrangle the increased volume of data in order to perform analytics on everything from labor costs, market coverage and work performance. In addition, freelancers work most efficiently if they can communicate through mobile devices — everything from receiving location-based notifications and project assignments to closing out work — so today’s freelance workforce solutions need to keep up with evolving mobility demands.
Fortunately, the rise of Freelance Management Systems (FMS) is helping revolutionize how businesses find, manage and pay their freelancers. Instead of relying on tedious manual processes (spreadsheets, emails, etc.) or disparate point solutions, integrated FMS solutions provides businesses with the tools and insights they need to thrive in today’s fiercely competitive marketplace.
FMS software is arming today’s leading businesses with cloud-based tools they can use to:
- Consolidate payment, managing and reporting processes into a single workflow
- Curate talent pools of pre-vetted and highly specialized talent
- Streamline communication to hundreds of contractors in a few clicks
- Conduct custom analytics to understand every aspect of their freelance workforce
Remember: On-Demand Labor Economy No Passing Fad
The most important thing to remember: the on-demand labor economy is no passing fad. Analysts and industry pundits all agree, the continued shift towards flexible, non-employee talent will only continue to grow.
You must leverage on-demand labor in order to stay competitive in this new world of work. More than just engaging 1099 talent though, your business will need technology in place that can help you leverage 1099 talent at scale. You’ll need the ability to quickly onboard hundreds (in some cases, thousands) of independent workers so you can truly reap the benefits of the on-demand labor economy.
With the freelance economy in full swing, now is the time to embrace more modern freelance workforce solutions. There are billions of dollars at stake and the clock is ticking. Is your company ready?