Currently, U.S. companies are facing a severe and two-pronged problem. On one side, there is
a massive talent shortage, making it difficult to hire qualified candidates. At the same time, most companies cannot offer higher, more attractive salaries to acquire the best talent because they must optimize workforce costs.
In most cases, the solution to this problem is hiring qualified freelancers rather than full-time employees. A recent survey showed that tech companies are among the first to turn to independent contractors to save money while hiring top talent. In this
survey, 71% of companies noted that bringing on freelancers is ideal for staying agile during economic uncertainty, which all businesses are looking for in the current landscape.
Onboarding remote contractors bring challenges, however. Companies must figure out how to onboard remotely in a fast, efficient, and compliant way, which raises a few key questions that tech companies can resolve.
1. How can my business legally work with freelancers across all regions?
Every country has it's business laws and financial regulations, which can be challenging to keep organized, especially when hiring contractors from multiple regions.
For example, the legal working age is 14 in India but 18 in Indonesia. In Mexico, freelancers can only be hired for specific jobs, and in Malaysia, it's prohibited to interact with Israel (and vice versa). This is why it's often worthwhile to outsource your
freelance hiring to companies that specifically keep up with these regulations.
Additionally, businesses can utilize streamlined, high-security verification procedures. Companies like Sumsub offer thorough background checks and KYC processes, which ensure compliance.
2. How should my company set contract goals and receive completed work?
With remote workers, it can be difficult to know how to establish a working relationship. Since you can't go to their office for a status check, how do you navigate setting goals and receiving work on time?
The answer is with a clear, thorough contract. Sites like Rocket Lawyer and HoneyBook help businesses and contractors to draft written expectations that cover confidentiality, ownership, explicit tasks and goals, transparent payment rates, and termination
In these instances, it's better to overly explain expectations, so there's no room for future debates or confusion.
3. How do we measure contractor results and productivity?
The global pandemic helped companies take a much-needed fresh look at how to evaluate results for in-house and contract employees. Rather than measuring value by the number of hours worked, businesses are now evaluating outputs and tracking how much time
is spent on each task.
Fortunately, there are a few solutions companies can choose from. Services like TimeCamp or Quickbooks Time can be used to track billable hours and contractor productivity. These records can also help companies decide which contractors to develop full-time
4. How can we effectively communicate with freelancers about deadlines? When should we get mediation to resolve disputes?
While many freelancers are excellent workers who turn in work on time, companies need to have policies and procedures in place to handle difficult situations with contract workers.
Your company must set clear deadlines and outline clear goals when setting up a new contract. This means determining things like hourly versus per-task rates and what services are included in those rates, such as the number of revisions or tests for a task.
Some platforms, like Solar Staff, hold payment in escrow and allow work deadlines to be shifted if both sides approve it. These services also offer outside mediation in case a completed contract is not seen as sufficient by either party. Additionally, if
you're looking for a solution to help resolve conflicts, dispute rate is an important figure: How many disputes have the service successfully resolved?
Companies always have the option to communicate with contractors directly via email or messenger programs like Whatsapp and Slack. Still, it's usually best to keep communications on a verified service platform. Using a third-party service like this protects
both freelancers and businesses when it comes to meeting deadlines and disagreements over work goals.
5. How can my business quickly and easily pay freelancers for completed work?
The issue of contractor payment is often the most complicated for businesses. Contractors are not viewed in the same way as regular employees, so accounting departments must have detailed, accurate logs of how the money is allocated.
For instance, companies must make sure that all contractor payouts for completed tasks are marked as wage budgets and not as payments to individuals. In addition, since various regions around the world have their tax and work regulations, businesses need
to make sure they document every transaction accurately. In general, the top three problems companies face when paying cross-border contractors are:
How to navigate pre-payment without a guarantee that the contractor will send the work.
How to reduce the time spent on cross-border payments to independent contractors.
How to speed up the payment process so that transactions arrive quickly rather than taking several weeks (like SWIFT payments often do).
In most cases, it is faster, easier, and more effective for companies to outsource this accounting to a professional service. Third-party services that specialize in keeping up with legal and financial regulations can help businesses stay compliant without
additional paperwork and headaches.
Finally, it is also wise for accounting departments to maintain closing binders for each task so that accounting and bookkeeping processes flow smoothly in the future.
According to the
International Labour Organization, roughly 46.5% of the global workforce is made up of freelancer workers. In the U.S. alone, freelancers are expected to make up
over half of the total workforce by 2028.
These numbers prove that contract workers are the future, and building contractor teams will soon be as commonplace as in-house hiring. This shift in the workforce means that companies need to start revising their onboarding processes sooner rather than
later to stay relevant in the future.
Fortunately, there are numerous startups and tech solutions on the scene that are ready to help streamline the process of creating a remote team, so working with freelancers doesn't have to be a hassle.