Agencies Rely Heavily on a Flexible Workforce. But is This Strategy Manageable at Scale?

In the remote-first reality of our post-pandemic world, and considering today’s volatile talent market, it’s no surprise that a reliance on freelance resources is never far from the headlines.  

What does this growth mean for agencies in particular, and how can they best manage today’s freelance challenges?

Do Agencies Rely on Freelance Talent?

For agencies, freelance talent comes with a wide range of benefits, which is why 75% of marketing agencies for example are already outsourcing to freelancers or content marketplaces.  54% of these agencies work exclusively with freelancers. 

Take the same reasons why big businesses are investing their attention in independent contractors, and you can multiply the value exponentially for agencies. 

Expert skills: For agencies, an inability to offer specific industry or audience knowledge is the biggest blocker to creating quality results for clients. By outsourcing to experts, agencies can attract talent with the exact knowledge or skills needed to get the job done. 

A lean team: More than your average enterprise, agencies understand the need to scale teams up and down. Freelancers can join the team for a specific client or project, without adding full-time workers who may not be needed once the project is complete. 

Engaged workers: The epidemic of Quiet Quitting is a sign of unengaged workers who aren’t committed or passionate about their roles. Freelancers work on their own terms, agreeing to the projects that make them excited, and often setting their own hours, pay, and working processes. This gives agencies a competitive edge.

The Challenges for Agencies When Scaling the Use of Freelancers

Across the business world, companies are seeing the value in engaging freelancers, and agencies are even better placed to see success with this model. Independent contractors are a way of scaling teams up and down with ease, while ensuring agencies can provide competitive work to their own customers, completed by professionals with top expertise.  

However, that doesn’t mean the freelance model comes without its challenges. While hiring a single freelancer is relatively simple, as soon as an agency begins using freelancers exclusively, or as a significant part of their workforce, the complexities start to stack up. 

Sourcing the right people

It’s fairly easy to find independent contractors for low-level work, such as data entry or manual labor. However, when a job requires more skills, the harder it is to find the right people. Freelancer marketplaces are full to the brim with profiles of workers with 5* profiles, reviews and named areas of expertise, but how do you know that the task is right for the candidate? 

This problem is exacerbated for agencies, as whoever they choose will represent their agency, and needs to meet growing client expectations,  making the risk much greater. 

Onboarding freelance talent

According to Gallup, it can take 12 months for a new hire to get onboarded and reach peak performance. When you’re working in an agency setting, you don’t have the luxury of that kind of time. You may have a sudden need for talent to support a specific client, and you need workers ready to hit the ground running, both for your agency, and for the client’s business. Unfortunately, today’s onboarding is far from simple. 

Especially with freelance talent, agencies often need to get Legal consultation to ensure there is no misclassification risk, IT to allow access to the right systems, Finance to discuss and organize payment terms and processes… and the list goes on. Now multiply this by an entire workforce of freelancers, all from different regions, with their own currency or payment expectations, and tied to varying compliance mandates, and you can see why it has become such a headache. 

Managing milestones and budget

Once freelance talent has been onboarded, agencies also need to consider how they are going to manage their work and their performance. When enterprises onboard freelancers, they can assume that each person will be overseen by the managers in their department. For example a freelance designer may be managed by the VP Marketing, or a freelance accountant by the CFO. At an agency, the model is entirely different, and freelancers will be working externally, perhaps moving between clients. Staying on top of their workload so that you know how busy they are, when you can utilize their skills elsewhere, or when it’s time to scale up your team is critical. 

Managing budget is also an important concern. Your customers will likely pay you a specific amount for workers, but you need to manage your freelancer budget to be sure that you are making a profit and seeing ROI. As each freelancer may have their own payment terms, and are unlikely to be working full-time for you each payroll cycle, this can get complicated fast. 

Paying accurately and on time

Speaking of payments, your freelancers want to be paid for all of their hard work! Unlike a traditional payroll, an agency payroll is likely to be more intricate, with independent contractors on various payment models, including retainer agreements, hourly pay, or even per-deliverable pricing. 

Paying a single invoice can be done manually, but what about when you’ve scaled up to dozens of freelancers each month, many of whom have very specific terms for how and when they are paid? This can quickly take hours from the working day. 

Introducing Fiverr Enterprise: A One Stop Shop for Freelance Management

As agencies continue to go down the road of exploring freelance talent to expand their workforce and boost their business growth, technology is sorely needed to smooth over the emerging roadbumps. 

Fiverr Enterprise is a Freelance Management System (FMS) built for exactly this purpose – to make it simpler to manage the growing freelance revolution. 

First, we offer a simple-to-use talent database which allows you to search and filter freelancer profiles from anywhere in the world, from a single dashboard. Skills gaps can be filled on the same day you need them, priceless for agencies’ need for a quick turnaround. We pre-screen profiles so that you can attain peace of mind that you’re always showing your customers your best side.

Next, Fiverr Enterprise offers automated onboarding workflows, covering Finance, Legal, IT, HR and Compliance, so that documentation is signed, sealed and delivered, and candidates are ready to hit the ground running, with no chance of misclassification in sight. 

When it comes to the money side, Fiverr Enterprise offers ultimate flexibility in how you manage your budget, providing ownership to teams, departments, or even single managers. You can set up payments based on deliverables, milestones, or on a cyclical basis, and all of your freelancers can be paid accurately and compliantly in a single click. You’ll be given detailed, customized cost breakdowns, so that you can keep a firm eye on ROI. 

Looking to maximize the way you handle freelance talent in your agency environment? Schedule a demo to see how Fiverr Enterprise can help.