By August of 2023 there have already been 223,000 layoffs within the tech industry alone. In tandem with a mass reduction of the full-time workforce is the rising demand for contract-based labor.
According to Linkedin data, job postings for full-time employee roles have experienced a modest growth of 6%, while there has been a significant 26% increase in postings for contractor positions.
Amidst an era of economic instability and lingering threats of a global recession, the need for an agile workforce assumes a heightened level of importance. As has been evidenced by global hiring data, many companies across industries are embracing agile transformations starting with their hiring practices.
Leveraging freelance labor is an optimal way to enhance agility. It provides organizations the flexibility to dynamically adjust their workforce size in response to demand fluctuations. The ability to contract specialized help on an as-needed basis brings with it significant cost savings as well.
As many organizations embrace the inclusion of freelancers into their hiring infrastructure, understanding how to effectively incorporate and manage this new workforce is of paramount importance.
Clear Communication and Expectations
Effective communication is a critical baseline to establish for the successful management of contractors.
To start, it is necessary for an organization to clearly outline the scope of the project for which the contractor is being hired. This includes a thorough overview of objectives, timeline, and any specific requirements or expectations. The organization and the contractor must share an understanding of the work that is to be completed and all relevant deadlines to be met throughout the course of the project.
Instituting a communication plan to build in regular updates and reports further ensures that a contractor’s work aligns with the organization’s goals and expectations. Through frequent check-ins and ongoing feedback, quality control is upheld with final project deliverables meeting previously established standards.
With this structure built in from the start, a smoother and more productive working relationship between employee and contractor is achieved.
Thorough Screenings and Evaluations
One of the greatest values of a freelance workforce is the potential collaborations with international talent.
It is estimated that around 86% of freelancers work from home offices; by eliminating the requirement for physical presence, companies gain access to global hiring pools, centering top talent and best fit over geographical limitations and convenience factors.
When hiring globally and removing in-person communication, there arises a greater importance for proper vetting. This is a two-fold process that involves both identifying contractors with the right qualifications, experience, and fit while ensuring that compliance can be met across varying international labor laws, tax regulations and employment standards.
Thorough screenings and evaluations of potential freelance hires helps to mitigate risks and maximize the value derived from the contractor-client relationship. Effective evaluations begin with clear alignment from the get-go and extend across the lifespan of a project to include ongoing performance assessment and adjustments for optimized project outcomes.
The important role that compliance plays in the screening process cannot be overstated, with identity verification through KYC checks being the necessary first step. A key element of KYC involves understanding the risks associated with a potential hire. This has particular relevance for international employment contracts as it mitigates the risk of mis-steps when navigating complex legal landscapes that vary greatly across borders.
Proper screening and compliance checks assure companies that they are not only partnering with contractors who align with their values and objectives but who can be legally hired and paid.
Clearly Defined Agreements and Contracts
Before engaging in a working relationship with a contractor, clearly defined documents that outline terms, expectations, and responsibilities must be drafted and signed by both parties. These serve to minimize the potential for misunderstandings and legal complications down the road by explicitly detailing project scope, deliverables, timelines, payment terms and more.
Professional Service Agreements (PSA) are commonly used contacts for companies hiring freelancers. They are legal documents that cover the overall framework of the business relationship by establishing general terms and responsibilities of both parties.
Alongside PSAs are Statements of Work (SOW), which typically serve as a specific roadmap for how a project is to be executed. They will most commonly include timeline and deadlines, reporting and communication protocols, performance metrics and payment schedules linked to project milestones. SOWs provide a more granular and actionable overview of the project and allow for both employer and contractor to clearly understand expectations and how success will be measured.
By having freelancers sign both PSAs and SOWs before beginning on a project, an in-depth understanding of expectations can be established- thoroughly outlined contracts underpin the foundation of a successful contractor arrangement.
Contractor Hiring and Payroll with Rise
Rise is an all-in-one payroll and compliance solution that helps companies to scale their global teams.
The hiring process is streamlined through Rise with automated PSAs and SOWs and identity verification in minutes with Rise’s KYC checks.
Payroll is further simplified with Rise’s unique flexible routing infrastructure. A company can fund payroll in crypto from a digital wallet and a contractor can receive their payout in fiat to a traditional bank account, or vice versa, with total compliance guaranteed.
Schedule a demo today to learn how the ease and flexibility of Rise's next-level crypto and fiat payroll can propel your company’s operational performance and streamline global hiring.
