With freelancer marketing increasing, there are various tools used to find freelancers. Almost all businesses rely on temporary labor for the future of work like copywriting, graphic design, videography, etc. The workers have a ton of work to provide in terms of accountability and flexibility. They also offer the efficiency of work required in all the workplaces.
But the employers fall into a strain of stress if they don’t know the right way of managing the workforce. Freelancer management software is an automatic way of dealing with freelancers and providing them with timely payments.
What is a freelance marketplace?
A freelancer marketplace is one such place where freelancers find employers and vice versa. Both freelancers and employers search for each other in the market. The only thing with the gig economy is that it is so fragmented. There is no centralized place to find all these freelancers. The freelance economy is such a big one that finding the right one requires a lot of time.
Most of the relations in the platform with independent contractor labor are through word of mouth or referrals. Likewise, they might be working in some other agencies through which the freelancers gain popularity. Just because a freelancer has not done a job right doesn't mean they are not suited to anything.
The freelance marketplace has a lot of freelancer management tools to create profiles. It includes all the relevant information like locations, availability, rate, etc. The freelancers also provide their work experience and skills in their profiles. In the marketplace, one needs a service, and the other provides the service.
The freelance marketplace is efficient for all freelancers to find work and somewhat efficient for the business clients to find gig workers. Further, it helps in expanding the reach for both. There are many freelancer marketplaces like Upwork, where about 5 million people are registered with 3 million jobs or Fiverr.
What is a freelance management system?
The freelance management system (FMS) is the place where all freelancers are seamlessly managed. Besides, the freelancer payroll was firstly done in bulky spreadsheets, which was not a convenient method of storing the data. With the FMS system, the freelancers have to sign a contract and will be given all the assignments they have to complete.
Vendor management is done with all the relevant tools as gig workers are vendors is substance. Also, HR or project managers are responsible for managing the work and authorizing payment to the freelancers. Not getting timely payment is something that demotivates freelancers. Moreover, the freelancer management software ( FMS) helps in finding the right person for the right job.
With the companies wanting to get onto the blended workforce, there will be a blend of the full-time workforce, freelancers, and temporary workforce playing the part, all of them managed via a Freelancer Management System ( FMS).
Why is FMS not a marketplace?
1. Sourcing and management
FMS: The primary purpose of the freelance management system is to manage the freelancers on board. The plans are designed to allocate projects, automate billing and payments, and provide accurate reporting. However, some Freelance Management Systems like Transformify offer a freelance marketplace and FMS all in one.
Freelance marketplace: The marketplace is where both employers and freelancers come together to get work. It is designed for simple project posting along with discussing the payment rates and reviews.
2. Automated Freelance Payments
The freelance marketplaces by default take a cut on freelancers' earnings. In some cases, these can go up to 20-30%. . Additionally, they charge about 3% to the employers. These high fees often result in arrangements outside of the marketplace.
An FMS on the other hand provides the flexibility of fully automating payments to freelancers across the globe and typically does not charge the freelancers. The freelancers offer a statement of work labor to get the necessary prices to their accounts. There are typically 0% fees when you are working with the system. It just helps to manage the working of freelancers and nothing else.
3. Customized Freelance Software
An FMS is the best place to cater to the needs of freelancers by custom onboarding and talking about the brand. Also, it leverages an employer value proposition, customization and employer branding, whereas the freelance marketplace is all about the out-of-the-box software with limited customization options.
For all those organizations having small one-off gigs from time to time, the freelance marketplace will work well. For all the rest, an FMS turns out to be perfect.
4. Other Features
Both FMS and freelance marketplace look similar, but they are both very different. Further, they organize the freelancers' projects and track their deliverables. The marketplace is a walled ecosystem used to find the required talent. It provides access to a community of freelancers, whereas FMS is used to manage an existing freelance talent pool, automate billing and payments. It helps to integrate the work with HRs and other financial systems.
Example of freelance marketplaces
When it comes to remote work, you can trust the freelance marketplace to the extreme. One example of a freelance marketplace is Upwork which people from all over the world trust. There are employers posting work opportunities daily. Here, a massive number of freelancers get selected for doing so many different kinds of jobs. Further, there are two ways of using Upwork:
Signing up for the low competition bids and, after earning, upgrading the same.
Directly getting selected to a paid profile.
Fiverr is another freelance marketplace where a lot of activities are going on. Although both Upwork and Fiverr are known for encouraging bidding and taking a cut on freelancers' earnings, still for many freelancers, these marketplaces are great for finding gigs and earning income as a side hustle.
Example of Freelance Management System
A Freelancer Management System (FMS) is a cloud-based platform that streamlines sourcing, onboarding, work management, and payments to freelancers, gig-workers, contractual workers, etc. Other features of a freelance management system include but are not limited to independent contractor screening, indexing of freelancers, reporting, billing and payments automation.
Freelancer Management Systems like Transformify address the needs of SMBs and enterprises by offering an affordable and fully customizable Artificial Intelligence-based FMS.
Transformify offers the following features and more. All are managed from a single dashboard:
Onboarding of contingent workers and freelancers
AI-based Applicant Tracking system
Project management
Payment automation and complete elimination of duplicate payments
Payment transfers across the glove in any currency via a click of a button (140+ Currencies supported)
Fully automated billing and invoicing
Contingent workers and freelancers sourcing via Transformify’s AI-based ATS
Integration with ERP/ payroll/ accounting / financial and project management software.
Both freelance marketplace and Freelancer Management System (FMS) might be the right fit given the business needs and size of the organizations. It is perfect if they come in a package and can be accessed via a single dashboard.