Freelancers have emerged into a force to be reckoned with. More than 53 million Americans — representing 34 percent of the U.S. workforce — are working as freelancers and their numbers are growing. Businesses across industries and of all sizes are using freelancers to bridge talent shortages on their staff, scale up for specific projects, hire people with highly specialized skills, and more.
A lot of the discussions around freelance economy tend to focus on what freelancers can do to secure work, but that leaves out a critical part of the equation—what companies can do to ensure freelancers want to work for them. To get a ready supply of quality freelancers, employers have to treat them right, and this means paying them on time.
The Waiting Game
Slow and late payments is one of the most, if not the most, common complaint from freelancers. In 2015, the Freelancers Union revealed that 44 percent of its members reported issues getting paid. On average, its members are owed over $10,000 in unpaid invoices and spend 36 hours tracking down missing payments. For someone who lives project to project and does not have a steady paycheck to rely on, late payments can be , at best, a nuisance, and at worst, catastrophic. A delayed payment could be the difference between being able to pay rent and not. For all its flexibility, freelance life can be stressful because there is no safety net. Furthermore, the U.S. tax system punishes freelancers with higher taxation, and the self-employed have traditionally struggled to gain access to benefits, like health insurance and retirement savings.
All of this is to say that freelancers deserved to be paid in a consistent and timely manner. But even if the fairness or ethical arguments don’t resonate with an employer, consider the financial ones. The ranks of freelancers are growing and there is power in numbers. Freelancers who struggle to get paid are often not shy about saying so, particularly in the era of social media. Word can travel fast—through Twitter, Facebook groups, and sites like Glassdoor. When word gets out that an employer doesn’t pay (or pays slowly), that can create problems. Reputation matters, and a bad reputation could prevent an organization from hiring the people they need.
Just look at what happened with Conde Nast, Newsweek, and Vice Media. Media is an industry known for relying heavily on freelance writers. Outlets sink or swim based on their ability to attract talented and creative people, and in an era where editorial budgets are tight, freelancers keep many publications running.
Earlier this year, Conde Nast sent off a firestorm earlier this year for a policy that said if freelancers want to get paid faster, they have to shell out for the “accelerated payment option.” In 2016, Newsweek took heat for failing to pay freelancers for months, even a year, after their work published. Buzz circulated on social media and other outlets covered it as a story.
The same happened to Vice Media, which was called out by the Columbia Journalism Review for its treatment of freelancers:
“Journalists who have worked for Vice tell CJR that the company published their work without paying them for it, promised them assignments which were later rescinded, and asked reporters for their help with documentaries that covered issues they had written about without any plans to pay them for their work. There’s also the usual freelance complaint: late payments,” the article said.
Reports like this matter. A writer who was thinking of pitching a story to Vice might think twice before doing so, and the same principle goes for web developers, designers, consultants, PR pros, etc. Moreover, freelancers who feel they are treated well are more likely to be motivated and deliver better work. The connection between satisfaction and productivity/performance does not just apply to full-time employees.
Don’t Be A Jerk
So what can businesses do to treat their freelancers right and cultivate a good reputation? To start, don’t treat freelancers differently than full-time employees. Make them feel like they are a part of their team, ask for feedback, and listen to what they have to say. If possible, include them in company events or team activities, especially if you want to work with them again down the road.
It’s also important to be organized so you don’t waste their time. Far too many managers seem to value freelancers’ time less than their own and are always late, canceling, and/or rescheduling. Those delays aren’t just frustrating, they are disrespectful. They essentially take money out of the freelancer’s pocket. Along the same lines, be organized about the tasks at hand. Before you hire a freelancer, make sure you know what you need and what the expectations are and communicate those clearly. A freelancer is an outsider, so they can’t be expected to know everything out of the blue. Take the time to make sure they have the information, tools and support to do what they were hired to do.
And of course, paying on-time is key. This requires having a streamlined, efficient system in place to turn invoices into payments. Human error and bureaucratic hurdles are top reasons why payments can take so long to go out, so automating as much of the process as possible can reduce bottlenecks and prevent invoices from falling through the cracks.
That’s why Kalo launched a premium product to enable freelance payments. Kalo automatically creates invoices when freelancers complete a task, handles compliance and administrative issues, and keeps all project stakeholders in the loop about invoice status. It also allows employers to issue payments to 120 countries around the world, so businesses are not limited in who they can hire by geography. Freelancers can receive payments in under 5 days, and believe us, they will appreciate it.
Freelance Isn’t Free
As freelancers assume a greater role in the workforce, it’s not just companies that are recognizing the importance of paying them on time. New York City passed the Freelance Isn’t Free Act in 2016 which requires a contract for any job that totals $800 or more and requires companies to pay within 30 days after completion of services. It aims to create accountability and provide freelancers with basic worker protections. This act is a great step forward, but all employers that work with freelancers should follow these guidelines even without being forced to. It’s not just the right thing to do—it’s the smart business move.
Kalo is the world’s leading freelancer management platform. We empower the most creative companies, including Google, Airbnb, Popsugar, The Economist, and many others, to easily manage and scale their freelance workforce. Learn more at Kalohq.com