From digital media to the introduction of new devices and technology, companies are looking for the best freelance talent to hire. However, making sure freelancers can be quickly engaged when needed, paid efficiently and administratively managed while on assignment creates a nightmare for HR or procurement.
Not only is this population multiplying, but with state and local governments starting to drive larger initiatives around auditing freelance and independent contractor resources, companies are starting to look for help to build a centralized freelancer payrolling program that protects them from risk.
In short, when utilizing payrolling services the administrative functions of managing non-employee workers, such as freelancers, are removed and the legal employer of the freelancer becomes the third-party vendor. In essence, the vendor manages the employment relationship, thereby taking the burden from the company utilizing the freelancer.
This supplier relationship, if properly structured, provides the company with a way to take advantage of the skills of the freelance worker, while not having to hire the worker as an employee.
This is distinct from temporary staffing or other recruiting solutions, because payrolling is used for workers and freelancers already known to the company. Freelancers, independent contractors, interns, and retires are all examples of this type of worker.
The third-party payrolling company is responsible for the on-boarding and on-going administrative management of the freelancer, by providing essentially the same working relationship as most employers and employees. However, the worker is assigned to the client, working under the day-to-day direction of the client.
The payrolling company is responsible for:
The costs for freelancer payrolling services are typically on an hourly basis, only for time worked. The third-party payrolling company charges a small percentage fee on top of the freelancer’s hourly or daily rate to provide the employment services.
The primary benefit of using a payrolling provider for freelancers is the freedom to engage the workers when needed, without having to employ them directly or be concerned with their employment status, required paperwork or providing them with a paycheck.
But there are also several other benefits to using this model to engage freelancers.
Companies that use freelancers find that as usage grows and the complexity of engagements increases, a payrolling program can provide an efficient and cost-effective solution to using internal HR or procurement processes.
There are many examples where freelancer payrolling solutions has helped companies overcome the hurdles involved with using freelance workers. A few of these include:
Similar to other types of payrolling, freelancer payrolling is a specialized solution that combines the efficiency and flexibility needed by customers with the focused attention freelancers requires. This includes annual projects or events to supplement core staff.