The world of work today is full of juxtapositions.
On one hand, you have a booming freelance economy and rising interest levels in operating a globally-dispersed, agile, on-demand workforce.
On the other, stories about the hardships of managing freelance teams are all too common.
But few market opportunities remain unfulfilled for long — and soon enough, freelancer management systems (FMS) emerged as a possible solution.
A freelancer management system (FMS) is an all-in-one toolkit for onboarding, managing, and paying your freelance workforce. The main purpose of an FMS: consolidate, systemize, and streamlined repetitive HR tasks for distributed teams.
Think of an FMS as a virtual HQ for your remote freelance workers and independent contractors where you can:
In other words: an app to shoulder the admin burden of managing a globally distributed on-demand workforce.
Freelancer management systems (FMS) are a simpler version of legacy vendor management systems (VMS) — another piece of software, designed for contingent workforce management.
If ever saw that beast, you know that most VMSs are unnecessarily intricate, have rigid rules, and often don’t integrate well with other business systems (e.g. for cross-border payments or invoicing).
VMS also often comes with inhibitive license/subscription costs:
The pricing alone makes advanced contractor management systems expensive for smaller companies. But even if you can stomach the costs, such systems may not always tick all your requirement boxes.
Most vendor management software was originally designed for managing temporary on-site workforce, rather than dynamic, remote freelance teams. Some solutions are also mono-market i.e. only support compliant hiring in one jurisdiction such as the US.
In contrast, modern freelancer management systems are:
…And they have just the right number of features to be equally helpful and easy to use.
The (sales) pitch for freelancer management systems is simple: You get a convenient people management tool, purpose-built for freelance teams.
Buuut, how is this really better than spreadsheets or all-purpose HR apps? Let’s break things down.
Unlike regular employers, freelancers can jump on projects faster. That said: not all freelancers are in active client-hunting mode or available on short notice.
You still need to “dive into” the vast freelance talent pool to find your *perfect* hire. These explorations can get overwhelming fast because you have to deal with:
As a result, something as inconspicuous as posting an open call for freelancers on LinkedIn can leave your team boggled down with extra work:
A recent job post from Loom attracted over a hundred applicants in a matter of hours. Source: LinkedIn
Here’s how a freelancer management system reigns in the hiring folly:
Some FMS even go a step beyond the above and provide access to a pre-vetted marketplace of freelance talent (which makes hiring even faster!).
Onboarding helps integrate new hires into your organization and “indoctrinate” them on how things work at your pond: What’s the big picture behind your business? How do you prefer small things to get done? What are the goals for the role/project at hand?
Employees and freelancers should get answers to these fundamental questions. Or else they struggle to get successful in their role and meet the set expectations.
And yet, freelancer onboarding is an area where most companies come short. A 2022 Microsoft-backed study analyzed how work experience differs for full-time knowledge workers and their freelance peers.
Unsurprisingly, the external workforce extensively commented on various inefficiencies they regularly face:
Your goal should be to help freelancers better understand your company as a whole (its goals, mission, strategy) and through a lens of a particular project (processes, metrics, expectations).
Therefore, you should look for an FMS that can:
Read more about building a potent onboarding process for freelancers and independent contractors.
Hiring independent contractors is less admin-intense than dealing with payrolled employees. You don’t have to:
Still, you must do some basic due diligence to stay on the good side of global tax and employment laws (which are complex). This includes:
Sadly, the world of the legislature is yet to catch up with the new world of on-demand, distributed, digital work. Even organizations like the United Nations (which has much more pressing global matters to deal with) couldn’t resist commenting on the issue:
“[Regulators must] shift away from one-size-fits-all solutions to more tailored policies that consider the unique opportunities and challenges of different types of new forms of work. Better data, policy experimentation, and more evidence-based policy analysis are required to help existing labor regulations and social protection systems to adapt and accommodate changes in the world of work”.
While a freelancer management system can’t change the world for the better, it can make a global difference to your company.
A good FMS has to streamline:
P.S. Did you know that Xolo also helps freelancers to stay compliant? We allow anyone to start billing clients as a legal entity (using Xolo GO infrastructure), which makes compliance easier for both sides!
Learn more about how Xolo Teams manages compliance processes in the background.
Paying a globally dispersed workforce is arduous. Dollars, francs, pesos, or euros — there’s no shortage of currencies freelancers may use for billing. Yet, currency conversion fees, paired with high wire transfer costs, can magnify project costs by another 5% to 35%.
Next comes the question of payment terms and conditions.
On-demand work warrants on-demand pay. Yet, larger organizations are used to having extended payment cycles (90+ days). This doesn't sit well with most freelancers.
Some companies also use a limited number of payment methods (e.g. local bank transfers or *gasp* paper checks) which don’t work for cross-border payments.
At the same time, almost 40% of SMEs admit that their funding and accounting structures aren’t set up to handle continual payments to freelancers.
Finally, there’s a variety of freelancer payment models you might need to accommodate (often simultaneously):
To make all the money matters less messy, look for an FMS with the following payment features:
Read more about how to pay your freelancers fast and compliantly.
We can’t say for all FMS, but if you choose Xolo Teams, the setup process is deadpan easy.
Treat any type of technology (FMS included) as a means to an end, not an end-all-be-all solution to whatever issue you have.
You still have to do the actual job of managing freelancers and independent contractors. That's where many new managers stumble (which is OK).
Once you’ve set up the software part, switch to tuning up the “social” side of freelance team management.
Information asymmetry means that you (as a client) have disproportionally more information than the other side (your freelancers).
You already know:
Your goal is to tilt the scale in freelancers’ favor and even out your knowledge during onboarding and subsequent collaboration.
You’ve got many remedies for that:
Create a standard roaster of materials you’ll share with freelancers in a new role. For example, for a freelance writer you might want to prepare these documents:
Sounds like a lot? In the early stages of freelancer collaborations, you should over-communicate. There’s a scientific reason behind why repeating an important message several times works:
“Repetition or multiple exposures modulate different types of memory over time. The results showed that after learning the objects three times, both item memory and contextual memory improved. The recollection, rather than the familiarity, contributed to the repetition effect”
In other words: Provide information upfront, repeat the most important pointers several times — and have ‘em in writing too for easier reference.
As a remote team manager, you need to factor in the nuances of autonomous, async work.
This includes basic stuff like adjusting for the time zone differences or replacing face-to-face meetings with text updates.
But you should mind the bigger picture too: If you exert too much control over how or when your independents work, you risk losing them (and possibly facing compliance issues).
To avoid such scenarios, you need to understand how your freelancers work:
And most importantly — listen to your freelancers. We treat most projects as collaboration opportunities, not a “boss → employee relationship”.
Unlike employees, freelancers don’t have the luxury of dealing with ambiguous, incomplete, or conflicting instructions.
As Elisa Silverman commented in a Zapier blog:
“If it takes [an employee] five tries over one month to get something done? Again, not productive, but that's a leadership or company culture issue, not the employee's issue. They get paid either way. But freelancers are not.”
We are expected to deliver results — and get frustrated when faced with a wall of “corporate red tape”, and “please follow-up later on this” replies.
Because of this fundamental difference in compensation models and collaboration preferences, you should make your standard workflows:
In practice, this often translates to having three clear phases in every freelance collaboration:
Once you’ve made the full circle, start it up again. You can create such standardized freelance workflow cycles for different freelance roles — design, marketing, software development, etc.
Doing so can also make your employees more productive. By creating clear-cut, well-mapped workflows you make everyone’s job easier to understand and execute.
Freelancers naturally feel the distance from in-house teams and clients which is a “given” for the profession. But this distance shouldn’t translate to exclusion.
Freelancers are a satellite to your business. They must stay in your close orbit — or else you risk facing:
A freelancer management system is a software tool to streamline admin aspects of collaboration — and provide extra room to focus on social interactions and relationship building.
Want to find out how a streamlined FMS like Xolo Teams can make onboarding, managing and paying your distributed team of freelancers the easiest part of your day?
Book a commitment-free demo with one of our teams experts.
Elena Prokopets writes content for tech-led companies & software development businesses, marketing to them. Her empathy for the customer, expertise in SEO, and knack for storytelling help create content that ranks well and drives industry conversations.
Elena uses Xolo Leap so she can focus on her solo B2B content writing business without stressing over the compliance and admin overhead.
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