Freelancers and independent contractors have become vital to modern businesses. But still, why are many businesses managing their freelancers and independent contractors by email and spreadsheets instead of using a freelance management system (FMS)?
It is clear that the majority of companies, leverage both full-time employees and freelancers, which enables them to increase their agility and flexibility in an unpredictable world. However, this also brings pressing challenges around managing freelancers, independent contractors, external consultants.
If you are looking for a better way to manage and hire your freelancers, service providers and independent contractors, then the first step is to understand what a freelance management system is.
A freelance management system (FMS) is an all-in-one platform, making the process of finding, booking, managing and paying the freelance workforce to the next level - be that one or 1,000+ freelancers at a time. In other words, FMS platform manages all of the operational, financial, and legal components of working with freelancers to help companies reduce paperwork and boost productivity. Not only will a freelance management system save your business time and money, but also ensures compliance - offering a smooth end-to-end hiring process. Freelance management system help streamline and simplify every hiring process — from finding the right talent to ensuring compliance — so you can dive into work fast and produce better outcomes.
How does a freelance management system help?
Companies find the right talent quickly and effortlessly
It is always a major task to find qualified, experienced and dependable freelance workers. While freelance platforms like Upwork can work for short-term gig work, it is less likely to find there skilled, qualified freelancers that are looking for long term jobs.
A freelance management system can help you build your own custom talent pool of highly skilled freelancers right on the platform, which further helps keep in contact with freelancers for future projects, eliminating the hassle of rigorous research and reduces reliance on expensive talent agencies.
The right FMS can be a game-changer for hiring managers, who no longer need to waste valuable time evaluating different freelancers across different marketplaces. With a freelance management system, companies can gain full visibility into your extended workforce and gain the tools required to build a strong talent network.
Automated onboarding and offboarding
Onboarding freelancers fast and efficiently is the best way to get them ready to work in a new organization. But without a standardized onboarding approach, you’ll inevitably face delays and bottlenecks, with tedious paperwork slowing you down.
Freelance management system helps you on every step of the onboarding and offboarding process, which is streamlined and simplified through automation. For example, with a freelance management system you can customize the onboarding process that best fits your needs. It ensures the freelancer contracts and all other legal documents like NDA, IP agreements, data protection etc. are signed, with updated tax forms. Further, other departments can be added to the process to keep a track on the freelancers work and ensure that everything is properly documented.
Full visibility on budget and spend
It can be a difficult task to track the number of freelancers and contractors a company works with, and even more so for the finance department to track the actual quarterly spend on freelancers and contractors.
A freelance management system streamlines the process of bulky spreadsheets, which are prone to human error and helps take the pain and risk out of budget approvals and tracking, removing dreaded POs and messy spreadsheets from your process.
Enable fast payments
As you build your freelance workforce, there will always be several variations in your freelancers’ rates, the currencies in which they are paid, and their preferred payment method.
This builds up one of the most heavy tasks of reviewing, approving, and paying each individual freelancer’s invoice according to their specific requirements, which makes the entire process overly complex and time-consuming.
A freelance management system can help you ease up this tedious work by consolidating all of your freelancers’ invoices into one single invoice for you to approve. The freelance management system will pay all your freelancers once the invoice is approved by the hiring manager based on the preferred payment method. This process enables less paperwork and fewer constraints, less chances of mistakes, and pay your freelancers on time.
Legal, Tax, and Workforce classification compliance
When hiring freelancers, you need a standardized approach to managing legal, tax, and workforce classification compliance, otherwise the organization increases its risk significantly. The consequences of misclassifying your freelancers or identifying a breach in a contract can be costly.
Freelancer management systems can provide you guaranteed compliance by automating the legal processes. The system helps you validate every legal document relevant to your workforce, including contracts, NDAs, Non-Competes, IP Ownership, and more.
Further, the freelance management system collects and secures the right tax forms to ensure you remain compliant with tax regulations and workforce classification. With a freelance management system, freelancers can simply upload their W9, W8/W8 BEN, 1099, or their country’s tax form, at the same time monitor employment risk on an ongoing basis.
Features to look out for in Freelance Management System
A freelance management system enables companies to manage their end-to-end freelancer activities from a single platform. This includes everything from search, verify, engage, manage, track, pay, and rate freelancers, contractors via an end-to-end platform. A good freelance management system can help you reduce your time to hire by up to 90%, decrease significant cost by 85%, all whilst staying in compliance in a connected, transparent and frictionless manner.
By leveraging the right freelance management system, organizations can:
Search & Identify qualified freelancers
Automate onboarding processes
Verify skills, credentials and qualifications
Contract management
Worker classification
Save talent pool for future positions
Assign, track, manage assignments
Pay freelancers with flexible payment options
Rate Freelancers
Engage and communicate with freelancers
Track performance with custom reports
Stay in compliance
Automate offboarding process
Who on your team uses the freelance management system?
A freelance management system is not just a tool for managers — it’s for many departments in a company and for everyone on the team to understand the kind of resources they have.
Different departments/ teams can use a freelance management system in different ways like the following:
Management team can build a database of approved freelancers and vendors, simplify workflows, and track growth and spend.
Operations teams can track and manage the projects while tracking timelines, milestones, and deliverables.
Accounting department can get W9s upfront, simplify payments, and send out 1099s. Finance department can view expenditures and plan for freelancer / vendor contractors spending, which can further help them in forecasting and budgeting.
HR department can quickly create new onboarding processes and get contracts and other paperwork quickly signed and filed. Further they can track performance of freelancers with reports and insights available.
Legal department can monitor contracts and NDAs and easily enable company-wide templates.
Managers who are working with the freelancers can quickly get projects started, knowing all the appropriate approvals and contracts are already in place.
Thus, a freelance management system isn't just for startups, small businesses, or remote teams. Research suggests that even large, traditional enterprises are seeing the benefits and generating profits from it.
It is time for businesses to adopt reality, and a way to leverage on-demand talent without creating unnecessary risk. With a freelance management system, there is no need to compromise on compliance, risk employee misclassification, or waste valuable time reviewing each freelancer’s payroll. A freelance management system enables you to reap all of the benefits of greater agility of the your contingent workforce to become faster, productive, and more competitive.