The end of traditional freelance marketplaces: how gig platforms are putting businesses at risk

Traditional freelance marketplaces are putting your business at risk. Here's how.

May 11, 2022

The end of traditional freelance marketplaces: how gig platforms are putting businesses at risk

Traditional freelance marketplaces are putting your business at risk. Here's how.

As freelancing has become a more and more attractive option for workers, so have the platforms that help businesses find freelancers. They helped make freelance work accessible, for both freelancers and the companies that need to hire them. 

Because of these platforms, the freelance industry has flourished. But with companies relying on freelancers more and more, new challenges have arisen. Many of these companies are now realizing that the processes they had in place for managing freelancers weren’t very scalable — and some are even realizing that they never had a process, to begin with. 

For these companies, finding the right freelance talent is only a small part of the equation. And it’s also opening them up to risk if they don’t have enough background information on who they’re actually hiring or safeguards around compliance. 

In addition to that, they need systems that can help them improve freelance management at every level and be strategic about where and when they’re using freelancers in the first place. And the traditional freelance marketplaces simply don’t give them the capability to do this. 

Here’s a look at the three main areas traditional freelance marketplaces put your company at risk — and how to eliminate those risks so you can work better with your freelancers. 

Spend and management quickly get out of control without a central overview

The biggest problem is that the more freelancers that work with your company, the more quickly freelancer spend can get out of control. How can you plan your resourcing strategically when you don’t even know how much you’re spending on freelancers at any given time? And it’s not just spend, you also need oversight into billing, contracts, sourcing, and more. Since you have different teams managing different aspects of freelance management, it adds a lot of back and forth aligning on management and operations. 

Traditional freelance platforms don’t offer you much help in this area. But using a freelance management system consolidates all of the parts of freelance management — sourcing, hiring, onboarding, contracts, and billing — into one system. This gives all of your teams a full overview into your freelance program and eliminates internal back and forth on freelancer operations. 

Lack of insight into the talent you’re hiring  

Gig platforms made finding work for freelancers easier than ever before and helped the businesses that needed freelance work find the talent they were looking for. 

Well… they sort of did. They promised to connect freelancers with the companies that needed them, but with little qualifications for which freelancers could use their platforms, there’s never any way to be sure the freelancers you find are as qualified as they say they are. 

These traditional freelance platforms are also so over-saturated with freelancers that it often means sorting through large amounts of unqualified applicants for each job, trying to find the ones that are actually good fits for that job. 

And because traditional freelance marketplaces are only designed to match you with freelancers, they don’t offer the capability to easily manage a pool of your trusted freelancers. Wouldn’t it be more helpful if anyone in your company could easily re-hire a trusted freelancer whenever they needed someone with that particular area of expertise? That would end all of the time you’re currently wasting sourcing new freelancers when you could be building better relationships with freelancers you already know that you trust. 

They open you up to the risk of penalties and fines 

With worker classification laws becoming more common across the US and Europe, managing freelancers can be really complicated from a compliance perspective. Understanding how each worker should be classified and treating them accordingly helps reduce the risk that you’ll be audited and have to pay fines and back taxes down the line. 

And if you’re managing freelancers in multiple countries or states, trying to classify them all correctly gets even more complex. Traditional gig platforms help you find freelancers, but they don’t give you any support from the compliance side. This also means that most companies don’t think about worker classification until after the worker has already begun working. 

This can be a compliance nightmare trying to ensure that all your workers are classified properly and you have all the correct documentation when it comes time for an audit. A tool that classifies each worker from the moment a contract is created helps minimize risk and lets your compliance teams feel confident that you’re operating within compliance from the moment a worker starts. 

Building a compliant talent pool that puts you in control of your freelancer spend, management, and optimization

If these risks have you rethinking your current freelance platform, you might be ready for an upgrade. The freelance platforms of the future help you build a compliant talent pool that you can grow over time. That way every time you need a freelancer, you can easily re-hire someone who has given your company good results in the past. 

Click here to request a personalized demo and learn more about how Worksome can help your business today. It helps you easily manage freelancers from one place, build longer-term relationships with great freelance talent, and hire freelancers while letting us worry about compliance for you.

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