What is a Freelancer Management System?
A freelancer management system (FMS) is a software solution that helps companies manage their freelancers. Many companies use such software to simplify how they engage and manage freelancers. Some of the critical aspects of an FMS include onboarding, assignment, tax form tracking, and invoices & payments.
Who needs a freelancer management system?
A freelancer management system is ideal for companies that work with many freelancers. It keeps track of freelancers: who they are, their role, nature of their work, forms & papers they’ve signed, availability, their project details, invoices & payment status and more.
Many departments within a company can use a freelancer management system to carry out multiple functions, including:
- teams that hire and work with freelancers such as creative teams, marketing teams or software development teams, to name a few.
- HR, legal or workflow management team that offer administrative support
- Finance and accounting teams that carry out payments create invoices, allocate budgets and control expenses.
How do you evaluate a freelancer management system?
There are hundreds of Freelancer Management Systems in the market. Choosing the right one makes all the difference to your business. Here are a few points to consider when evaluating a freelancer management system:
- You need to be able to configure your FMS solution to suit your workflow. Each company has its unique way of managing tasks. Therefore, it helps to have an FMS that is highly customizable so that you can tailor the processes based on how your organization functions. This applies as a team level as well. Many teams work differently, so it is vital to make sure that you can configure the FMS at a team level.
- A scalable FMS allows you to manage and collaborate with your workforce at scale when the team grows. The working culture will see drastic changes in the coming years. Therefore you need to have an FMS that can accommodate changes that will take place in the evolving freelancer economy.
- Ease of Use is crucial. As the FMS serves a wide range of users within an organization, it should have an intuitive interface and easy-to-use features. A seamless user experience will boost your teams’ confidence in managing freelancer projects. It also helps them adapt and improve processes within your company.
- The FMS you choose must have the ability to integrate with other tools and systems. It should be able to incorporate the software your organization uses every day and to allow for more automation and fewer errors. Some of the tools that should be integrated to an FMS include human resources management systems, human resource information system, enterprise resource planning systems, vendor management system, accounting software, and other collaborative tools to name a few.
What are the critical elements of a freelancer management system?
Most of the freelancer management solutions in the market comprise of 4 key elements.
- Sourcing & onboarding
FMS allows you to source freelancers for the job at hand. It will enable you to create dedicated pages with project description, skills, availability, and application portal. These details can be quickly published across freelance marketplaces, job boards and internal talent pools. Freelancers can apply for the job through any media. You will be notified on FMS software. This process reduces the hassle of spending long hours on different job sites.
If a freelancer expresses his interest and submits his application, the FMS will trigger actions. Some of these actions include information collection, skill assessment and scheduling interviews until he is hired.
FMS also assigns action items to the HR team, IT team or Legal team to carry out background checks, sign contracts, gather documents, set up payment methods, and offer access to tools.
FMS automates tasks and creates a smoother workflow which ensures timely completion of hiring and onboarding without skipping any steps. You must set up customized workflows based on how you hire talents so that you can reduce time and effort spent on the hiring process.
- Talent Pool Management
FMS makes it easy for you to manage freelancers. Many organizations rely on spreadsheets to maintain their freelancer database. This process is tedious and time consuming work which could lead to a lot of confusion.
Many FMS come with built-in talent pool management features. It helps the hiring managers search for freelancers based on their skill set, availability, rate, location, and other custom tags. Your teams can leave feedback and reviews that will help you sift through freelancers and find the best talent. Once you find the right freelancer, you no longer need to invest time re-onboarding them as FMS already has carried out all the necessary steps.
- Collaboration & project management
FMS comes with collaboration functions for a remote team that help improve remote-working processes. Features such as team messaging, video calls, task management, and time tracking make it easier for you to manage work seamlessly.
Moreover, just like any employee workflow, you have specific functions allocated to freelancers as well. Such functions include timelines, budgets, the scope of work, deliverables and payments. If any adjustments are made to any of these factors, you need to update it across the entire workflow, which is tedious.
With an FMS, this process is greatly simplified. As various aspects of the freelancers are interconnected, each process automates when one parameter is updated.
When you don’t have well-managed internal processes, there is a chance that you could miss out on paying your freelancer on time. An FMS can solve this problem by streamlining the workflow from invoicing, approval, scheduling, to payment and updates. Teams can refer to the FMS to see payment status as it allows for better transparency of all the process.
During onboarding, the FMS collects tax forms and sets up the freelancer’s preferred payout methods. It then acts as a payment service provider and sends out payment. This process simplifies the payment process to a great degree, as your team no longer needs to worry about currency conversions or to choose the right payment mode. They need to click a button to make the payment.
The FMS manages all the payment information in a centralized manner. It makes it easier for others on the team to track spending and optimize budgets accordingly. This option allows for greater cost-efficiency within the organization.
Why should you use a freelancer management system?
You must use a freelancer management system to:
- Save time:
Freelancer management system saves time by automating processes and managing your existing freelancers. It also segments all freelancers based on their skills.
- Streamline hiring:
By standardizing the onboarding process and maximizing compliance, an FMS ensures that freelancers comply with terms & policies. It also makes sure the freelancer signs the contract on time.
- Offers visibility:
A freelancer management system gives access to all that data that will help you make actionable hiring decisions. You can view performance history, expertize, rate, and contact details to find and hire the right freelancer.
- Robust tracking:
The FMS allows you to not only track the progress of a project but also check the duration spent to complete a task. It will help you strategize your work and meet deadlines effectively.
Freelancer Management System Vs. Spreadsheets
Companies relied on spreadsheets to keep a track of their freelancer employee details. But when it comes to maintaining an agile workflow, FMS trumps spreadsheets any day. Here are some reasons why:
Freelancer Management System
It is difficult to build and manage a database of freelancers when the number of resources grows.
FMS can track user and vendor activity, allowing you to see interactions from beginning to end.
You will not be able to get a holistic view of projects on spreadsheet
FMS offers a holistic view of projects ensuring knowledge is not lost
Tracking performance of freelancers is challenging for teams using static Excel files
FMS tracks performance of freelancers based on a particular project, duration and skills. FMS helps find talent based on different filters or requests.
You need to manually enter feedback and reviews on spreadsheets.
FMS automatically sends reminders to provide feedback and reviews for each contractor at the end of a project.
Excel sheets need to be sent back and forth among different teams so they can key in their inputs.
FMS is accessible to everyone in the organization. Teams can update, add and track simultaneously effortlessly.
Excel and Google Sheets lack APIs that allow for robust integration which reduces the scope of automating processes.
FMS allows users to integrate tools which helps reduce workload and increases turnaround times.
Do you need an FMS if you have an HR system?
Traditional HRIS systems are not agile enough to manage freelancer workforce, as their work processes are different from that of full-time employees. There are also legal implications of storing non-employee data alongside full-time employee data. Therefore, having an Freelancer Management Software will add value to organizations that rely on freelancers to get work done.
As more and more companies accommodate freelance talents to take up their work, it helps to have a freelancer management system that facilitates collaboration and offers a flexible talent strategy. Moreover, having an agile freelancer management system ensures that a well-managed workflow which means your teams can devote their time on other critical tasks without having to worry about managing your freelance talent pool.