Beeline Dispatch: Exploring the Benefits (and Risks) of Engaging Freelancers

At its customer event this week, Beeline shared a number of benefits that companies can expect to realize from engaging freelancers compared with contingent staffing resources. These include:

  • Increasing the available talent pool (given that many freelancers enjoy the independence of not working for a staffing firm or as a direct employee for a company).
  • Lowering costs by “13% or more.” Note that Beeline is being extremely conservative with this number. In certain industries, the delta between freelance and contract labor can be 50% or more.
  • Accomplishing the engagement of freelancers “with very little change management.” This is the true Holy Grail of building a services procurement program that takes advantage of freelance labor alongside staffing and other resources.
  • Leveraging a means for independent contractor vetting/compliance strategies and payroll providers already in place. One of the major “hang-ups” that many organizations have when it comes to engagement freelancers involves both regulatory compliance and legal risk.

To this last point, outside of regulatory compliance risk, contractors that are hired as freelancers can potentially sue their clients for misclassification. Spend Matters has seen cases settle out of court for often as much as the contractor might be paid in a year (even if the engagement window was much less). Settlements are usually beyond just the self-employment “tax” that contractors are obligated to pay, inclusive of high legal fees, payable by the plaintiff, as well.

This is a critical observation to note. Spend Matters research suggests that if procurement, HR and IT organizations can reduce the compliance risk and chance of any type of lawsuit through the proper vetting of potential freelancers, the risk can drop dramatically or be eliminated (some providers even indemnify customers from regulatory and legal risk based on their processes) in bringing these resources onboard.

For freelancer adoption to truly cross the corporate chasm, it will be essential for companies to engage to leverage the right toolsets to eliminate the compliance risk factors.

The good news? Beeline/OnForce and other freelancer management systems (FMS) solutions can tackle this problem head on.

Stay tuned for more coverage from the Beeline customer event.

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