Delayed payments can strain companies’ working relationships with independent contractors. These late payments can impact the freelancers’ financial health and strain their trust in the partnering company. As this may lead the independent contractors to seek job opportunities elsewhere, it can create retention problems for companies.
In fact, 73% of the independent contractors responding to a survey claimed they would abandon the freelancer marketplaces they work with for factors including a better payment experience, as reported in the “Digital Payments in a Digital World Playbook,” a PYMNTS and North Lane Technologies collaboration.
Get the report: Digital Payments in a Digital World
The freelance economy is witnessing rapid growth worldwide. Freelancers are searching for work inside and outside their native countries, taking advantage of the ad hoc economy’s inherent flexibility to find opportunities and expand their professional networks. Businesses also appear to be ramping up their hiring of these professionals.
Enticing and Retaining Independent Contractors
Businesses that want to expand the number of freelancers or contractors they work with must take careful note of how payment troubles could hurt their chances of enticing and retaining ad hoc workers.
This is especially important when freelancers feel overwhelmed with managing their finances even as they enjoy flexibility and financial autonomy.
Read more: Pallo Launches SaaS Platform for Freelancers
Finding payment solutions that can address freelancers’ unique cross-border payments challenges is the next step for the businesses that employ them.
More and more of these workers want to be paid in their local currencies — quickly. Late payments can be financially devastating to freelancers.
These expectations are prompting businesses that want to retain or grow their freelancer relationships to conduct the complex currency conversions and other cross-border payments compliance aspects far faster than they traditionally have.
Finding Payment Solutions That Address Unique Challenges
Flexible freelance payments require businesses to first reexamine their current methods. Many firms use internal payment processes that involve at least some manual procedures — relying on employees to wade through invoices and other documents to finalize transactions, for example. Other companies still fail to support payments in local currencies despite ad hoc workers’ increased demands for them to do so, which could strain their working relationships.
Many businesses are looking to mitigate these problems by supporting real-time payments. Most real-time payment networks are being developed for domestic use, however, meaning it will take several years before they can adequately handle cross-border payment volumes. Implementing automation or partnering with third-party payment providers could also ease some of these companies’ cross-border strains.
Companies must quickly get to work analyzing their freelance payment strategies as the world becomes more digital and connected. Freelancers are coming to occupy a crucial role in the global economy, and ensuring that they can receive their payments quickly, seamlessly and in their desired currencies is of the utmost importance for the companies that rely on their services.
