Talent acquisition is changing across the board.
Enterprises in all industries are struggling to hire top talent, with 77% finding it hard to fill vacancies.
Couple this with the fact there are 1.57 billion freelancers worldwide; it's no wonder enterprises are turning to the global contingent workforce to plug their skills gaps.
For example, one study found that almost a third of the average enterprise’s workforce is now contingent (28%), and enterprises with a reasonably high contingent workforce plan on hiring more.
For instance, one company comprising 51% contingent workers aims to increase that by 35%. Similarly, another company comprising 40% contingent workers seeks to increase that by 29%.
All that to say, hiring contingent workers is now a strategic and critical part of how enterprises operate.
But how do you manage this shift without creating an additional layer of bureaucracy?
One such solution is to invest in a contractor management system.
Such a platform empowers your enterprise to easily hire, contract, and pay contractors and freelancers without relying on a third party.
Instead, you can draw upon your own internal talent pool, resulting in time savings on administrative tasks and reduced recruitment costs -win-win!
With all that in mind, let's take a closer look at why today's enterprises need a contractor management system:
The Risks of Inaction
Without a robust contractor management system in place, enterprises risk the following:
Inefficiencies
Enterprises using a combination of online and manual tools to manage their contingent workforce take more time to carry out operational tasks. More specifically, we're talking about using a mixture of spreadsheets, emails, and paper records.
The stats back this up. For example, 47% of companies state they struggle with onboarding due to infrastructure challenges, with two in five HR managers spending at least three hours per hire collecting onboarding information manually.
Compliance violations
Needless to say, when hiring contingent workers (or any staff for that matter), it’s essential enterprises comply with a range of legislations and regulations relating to:
- Payroll record keeping and reporting
- Tax and social security costs
- NDAs
- GDPR
- Non-compete contracts
That's, as well as complying with worker classification contractor regulations in different countries. Failure to correctly classify your workers can result in a fine. For example, in the US, the IRS can fine businesses a fixed amount (starting at $50 per misclassified worker) plus an additional 1.5% of their wages paid and the cost of any unpaid FICA taxes for both employer and employee.
HR and finance teams may be overwhelmed trying to manage compliance-related difficulties, particularly in enterprises with a large and increasingly contingent workforce.
Poor Onboarding
Contractor onboarding is no different from regular employee onboarding in that contractors need to know what’s expected of them when working for an enterprise.
In fact, typically, contractors have less time to familiarize themselves with the company’s needs because they’re often expected to jump into assignments fast.
So, suppose an onboarding process is slow and disorganized, and emails and phone calls between contractors and hiring managers are missed. In that case, this can be confusing and may even prompt contractors to pass on an assignment.
The stats bear this up, with 41% of employers believing a disorganized onboarding process is detrimental to their organization!
Problems Paying Contractors
More than 70% of contractors have experienced problems being paid.
No enterprise wants to be known as a brand that doesn’t pay or is late to pay their workers. Not only is this bad for employer branding, but it can also result in contractors saying “no thanks” to future projects.
Enterprises running manual, old-school payment systems are less likely to meet payment deadlines and might face challenges paying contractors working in different currencies and time zones.
Again, this is where an efficient freelance management system helps to streamline and give you and your contractors better visibility over their invoicing, payment approval, and invoice status.
Mastering Contractor Management: A Step-by-Step Guide
Enterprises busy managing their business’s strategic goals and operations may think mastering contractor management isn’t worth their time and energy. If that sounds like you, you might be pleased to hear this guide provides a quick solution:
Build a Talent Pool
Building an internal talent pool is one of the quickest ways to improve your contractor management.
Rather than wading through various freelance job boards and spreadsheets trying to find the right talent for projects, there are strategic advantages to directing sourcing contractors from a talent pool you’ve built and nurtured.
By inviting skilled contractors to work with you directly, you can build a database of pre-vetted and skilled freelancers you’ve onboarded, allowing you to quickly plug skills gaps when needed.
Streamline Onboarding and Compliance
Work with a robust contractor management platform to simplify your onboarding process and ensure compliance.
For example, the right system will enable you to easily:
- Send all legal and compliance-related documents to freelancers to sign (for instance, NDAs, non-competes, payment information, VAT registration, signed contracts, etc.)
- Securely store said documents and data, allowing both you and the contractor easy access from one place.
With this kind of centralized and automated onboarding, you ensure contractors are ready to be matched to new and ongoing projects without delays while remaining fully compliant - win-win!
Boost Contractor Engagement
Most enterprises understand the importance of keeping employed staff engaged. However, ensuring contractors have a positive experience with your enterprise is equally important.
For example, contractors working on different projects for several teams may find it challenging to communicate with their managers and colleagues - especially if they’re working remotely.
However, a contractor management system that integrates with pre-existing communication tools like Slack and Zoom can help facilitate effective multi-department collaboration.
Save Money
As well as the benefits listed above, an efficient contractor management system can help your enterprise save money.
How?
Enterprises relying on agencies to supply talent whenever projects arise can instead build their own talent pool and invite and add contractors themselves.
For example, we’ve seen the average manual hiring process for one contractor cost an internal team eight hours of active work on unnecessary administrative tasks.
However, by using a contractor management system (in this instance, Bubty), the company was able to automate the majority of those tasks, slashing those eight hours down to 1.5 per contractor hire.
Imagine you’ve got 300 hires per year. Without automation, this equates to 24,00 hours to make these hires. Multiplying this by the average hourly HR Manager’s salary ($50 an hour) totals $120,000.
In contrast, by using a contractor management system to automate these tasks, you’re looking at spending only $22,500, saving the company an average of $97,500!
Simplify Contractor Management with Bubty
So, now we’ve explored why enterprises need a contractor management system, let’s look at a solution.
Cue, Bubty.
Bubty offers a simple-to-use contractor management system that makes it easy to execute the above steps.
More specifically, it provides all the tools you need to enhance operational efficiency from one centralized data-driven dashboard, including:
- Contractor onboarding and compliance workflows
- The ability for your freelancers to upload their CVs/resumes and skills onto the CMS for easy project matching.
- Your finance team can make worldwide payments to contractors in multiple currencies
- Integrate with existing systems, including Slack, Zoom and HR, Finance, CRM, and VMS platforms
In addition, Bubty is also a white-label solution, meaning it’s a customizable platform for enterprises looking to manage their contractors with their logo and brand colors at the forefront.
Are You Ready to Adopt a Contractor Management System?
Enterprises still using spreadsheets, old databases, and manual systems (or all three) will benefit from the increased efficiency and reduced costs of using a contractor management system.
Not only is it more of an affordable solution in the long run, but it also offers a one-stop answer to onboarding talent, ensuring compliance, and making it simple for freelancers to upload their details.
It’s also the perfect software for any enterprise interested in building its own talent pool and paying talent quickly and accurately upon project completion.
The best way to move forward is to evaluate your current practices for managing your contingent labor to see if there’s room for improvement. If there is, would a contractor management system help?
If so, are you ready to explore how Bubty can streamline this process? Book a free demo today.
