July 5, 2014
With the entrance of a new, young, workforce that grew up on the Internet, a growing number of “accidental” freelancers launching their own businesses, and the increased accessibility of a global 24/7/365 connected world, the remote freelance market is booming.
Although the majority of freelancers are located in North America, there is a huge market for those working in other areas. Most of the growth is currently observed internationally in Europe, Central and East Asia, Latin and South America, and the Middle East. In most cases, these freelancers contract with the customer via a trusted exchange, or crowdsourcing network, such as Odesk, or Elance.
A Promising Future for Remote Freelancers
Given the numbers and the promise for growth, remote freelancers are well served by payout companies that can provide services to the large and expanding crowdsourcing networks that employ them.
For example, Odesk, one of the largest crowdsourcing networks today, has more than 500,000 Filipino freelancers in their network. Another network leader, Elance, has 266,000 freelancers located in India who have earned close to $150 million.
So for those thinking about hiring, or have already hired, freelancers within the U.S. and throughout the world, the challenge has become figuring out how to best manage such a diverse group and ensure their satisfaction, thus translating to great work for your customers.
The answer ultimately boils down to two important factors when working with remote freelancers: providing them the ability to complete the work they are assigned to do and paying them on time.
Tip: Provide Clear Direction
To begin with, remote freelancers need to be able to complete their work without having to leave their place of work or residence. They must be able to do the work by using the resources available to them locally. This typically translates to being able to work using only a computer and Internet connection.
Remote freelancers also care about getting a job that has clear boundaries and expectations on what they need to deliver. The job needs to be well-defined and the customer expectations need to be well formulated so little to no direct interaction with the customer is required. An easy way to submit completed work for review and approval is also important.
Tip: Always Pay On Time
The most important factor when working with freelancers is the ability to pay them in a fast and efficient manner, preferably in the local currency of the country in which the freelancer resides. Paying your freelancers well and on time will ensure the success of your crowdsourced network and that quality work is delivered with each project.
There are a number of best practices to keep in mind when developing a payment system that ensures your freelancers are not only getting paid the correct amount, but also the correct way:
- Easy and timely payment. The importance of paying your freelancers in a timely manner can’t be overstated. Consider using automated, specialized payout solutions, designed to interact directly with the freelancers to collect their preferred payout method, and offer them the most efficient method available in their geography.
- Local currency. While you may be running your accounting in U.S. dollars, making payments in local currency helps freelancers run their business more efficiently, and therefore increases their satisfaction when working with your network. But without the proper infrastructure and banking relationships, paying hundreds or thousands of providers, each in their local currency, can be daunting. The use of purpose-built, automated systems, that are connected to domestic and international banking institutions, can easily solve the problem.
- Accurate data. The use of automated systems to collect payment details from freelancers streamlines the mass-payout processes. These systems combine collection and validation of beneficiary information with domestic and global remittance capabilities.
- Options and flexibility. If your freelancer’s preferred payment method is not available to them, they are likely to turn away your business and look for a more flexible opportunity that is convenient for them. Therefore, it is extremely important to make sure you support as many payment methods as you can for each location where you make crowd or freelancer payments.
- Transparency. Use a payment system that provides the freelancer a clear and transparent view of how long it’s going to take to get their money, what fees are collected from them, and the ability to track their earnings as they move through the various financial institutions (banks, e-wallet’s, etc.) on their way to the freelancer.
To be successful in the future, it will be important for all businesses to understand how to work with, and take advantage of, this growing remote freelance workforce.By following the guidelines outlined in this article and efficiently using the networks and tools that are available today, successful business owners will be able to maintain an efficient and productive relationship with remote freelancers — whether they are a just few miles away or several thousand miles away.
Eran Karoly is COO of Tipalti, a leading automated payment platform.
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