Freelancer Limited Enters the Enterprise Neighborhood: Who’s the New Kid on the Block? (Part 2)

In this two-part series, we highlight contingent workforce industry trends, discuss Freelancer Limited and its new enterprise offering, and offer our own Spend Matters commentary on this provider’s development. In Part 1, we focused on overarching trends, Freelancer (the company) and Freelancer Enterprise (the solution). Today in Part 2, we discuss enterprise demand for Freelancer Enterprise, Freelancer’s experience with procurement and the state of enterprise solutions for sourcing online freelancers, along with suggestions for procurement.

Enterprise Demand

Examining it’s database, Freelancer found that there are isolated users of the Freelancer.com marketplace within 70% of Fortune 500 companies (long-tail spend or rogue spend, depending on how you want to look at it). Now enterprise executives are reaching out to Freelancer and expressing their interest in a more robust enterprise solution.

Freelancer reports increasing activity on the demand-side. Including early clients (prior to December) and new clients (after December), Freelancer indicates that there are currently about 30 enterprise clients (including a few Fortune 500s) at various levels of engagement.  Freelancer informed us that in December, just before the announcement of Freelancer Enterprise, there were inbound inquiries/conversations in progress with about eight companies. By March, that number has increased by over 300%.

These represent a range of industries, including pharma, chemicals, telecom, electronic manufacturing, real estate, education, media and tech. Conversation initiators within the companies include executives across various functional and corporate functions (product development, strategy, innovation and even procurement).

What About Procurement?

Freelancer indicated that, in a number of cases, procurement has both initiated or shown up later in the process. In one case that was described, two different procurement teams in the North American and European subsidiaries of a multinational corporation reached out separately to source IT freelancers. In another case, an organization’s procurement group reached out to source project-based talent for all internal departments, including marketing, sales and engineering.

According to Freelancer, encounters with procurement teams tend to be more administrative and procedural. While other functional teams have a greater interest in discussing problems and potential solutions, procurement teams tend, not surprisingly, to be more rigid in their approach and focused on collecting pure data/information. Working with procurement teams usually requires more effort. For example, a typical process tends to include — again, not surprisingly — lengthy RFPs, supplier forms, contracts and multiple attachments.

Freelancer also reported that procurement teams appear to struggle more with the concept of an online freelancer marketplace and sometimes mistakenly see it as just a traditional supplier or just a business software application (SaaS). In one case, a procurement team sent an RFP and a pricing request that was impossible to respond to. Freelancer also told us that working with procurement not only required more effort, but more patience, as well (also not a surprise).

Spend Matters Commentary

As noted at the outset, online freelancer marketplaces are not new. And while the usage of them has been growing steadily since their inception roughly 10 years ago, this growth has been largely attributable to smaller businesses and, to a lesser extent, isolated users in larger enterprises. For a variety of reasons, corporate-level engagement and broader enterprise adoption has been slow to take hold. However, that seems to be changing. From our vantage point, we are finding an increasing number of data points that indicate corporate-level interest and engagement are increasing.

At the same time, solution providers have begun to offer different types of solutions to enable enterprise use of online freelancer marketplaces, most prominently:

• VMS technology or compliance services solution providers that have extended their platforms to support talent pool management and the sourcing of freelancers from their networks of independent online marketplaces (e.g., Beeline Self-sourcing, SAP Fieldglass’ Digital Network, MBO Partners’ MBO Connect).
• Online freelancer marketplace solutions that have extended their core platforms to support corporate-level, enterprise-grade capabilities (e.g., compliance, integration, talent pools, visibility) to source online freelancers from their own online marketplaces (e.g., Upwork, Catalant and now Freelancer).

In the second category, Freelancer Enterprise is a very recent arrival, coming to market with a fairly cautious, demand-driven, incremental approach. Given the gradual maturation over the past several years, this strategy may be well timed. That said, how enterprises will be scaling up their use of online freelancer marketplaces remains to be seen. There are already many options that may be more or less suitable for different enterprises depending upon their needs, and it is likely that solutions will evolve over time.

From a contingent workforce procurement standpoint, this represents a strategic sourcing challenge, particularly if demand for online freelancers is accelerating and spreading in the organization. At the same time, this represents an opportunity, too. As one might expect, there are no “best practices” for how procurement groups can deal with these circumstances.  However, Spend Matters, based on its own research, has been able to develop framework to help procurement groups navigate this new terrain. Spoiler alert: There is not one approach, and procurement may not always be in the driver’s seat.

In our recent two-part PRO series, “How Procurement Can Participate in Platform Sourcing Initiatives: There Are More Ways Than One,” we provide a focus, framework and set of suggestions to assist CW/S procurement organizations in understanding various options and opportunities for participating in online work and services platform developments/initiatives in their respective enterprises.

• In Part 1, we focus on (a) how the procurement approach to platform sourcing is different from typical contingent workforce program management and (b) what participation options (roles/orientations) are available to procurement organizations depending upon their state of maturity and resource availability
• In Part 2, we discuss a range of procurement functional disciplines that are, with appropriate modification, highly applicable in platform sourcing scenarios. In addition to indicating where procurement can concretely contribute expertise, we also discuss how procurement’s role may change over time. Finally, we provide a set of key takeaways from this series

But ultimately, since learning is fundamental to responding to the emergence of online freelancer marketplaces and solutions that enable corporate-level, enterprise-grade utilization of these marketplaces, it would also make sense to check out one of the new kid on the block, Freelancer Enterprise, at https://www.freelancer.com/enterprise/.

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