Three Reasons To Simplify Global Gig Worker Payroll

The global gig economy offers companies access to an ever-expanding pool of skills and knowledge. The race for this talent is intensifying in the remote work era, as more highly skilled professionals turn to independent contracting, and businesses shift their perceptions of outsourced skills and expertise.

According to industry studies, the worldwide freelance market is estimated to be worth $1.5 trillion and increasing at a CAGR of 15%¹. But complex payroll requirements, different currencies, and contractors’ differing payment method preferences can prevent companies from benefiting from this growing talent base.

The gig economy today covers much more than drivers or delivery couriers. According to the estimates of the Brodin.com survey, the gig economy is expected to grow from 204 billion dollars in 2018 to 455 billion dollars in 2023² at a CAGR of 17.4%. The sector has expanded to cover a wider range of workers.

Knowledge workers — professionals who provide expertise and in-demand skills — are becoming key players in this global workforce. 71% of the employees in the United States are planning to freelance in 2023 with the number of freelancers forecasted to reach 90.1 million by 2028³.

Gartner research estimates there are more than one billion knowledge workers⁴ in the world today, and more than 51% of all knowledge⁵ workers worldwide are working remotely. Developers, marketing consultants, graphic designers, and I.T. specialists are just some of the knowledge workers who are serving companies across borders and timezones.

This new breed of global workers have a significant impact on business productivity⁶ across the world. Research by Oxford Economics and SAP Fieldglass shows:

However, the shift to greater remote working and the rapid digitisation of industries such as retail and banking means companies must be strategic and organised to attract and retain the cream of the global talent crop. Technology company Philips, for example, has created its own freelance talent pool⁷ of vetted professionals.

Streamlining global payroll should be at the centre of your strategy, whether your business follows in the footsteps of Philips or turns to marketplaces for outsourced labour.

Most gig economy workers want flexibility in how they get paid, according to a recent analysis from PYMNTS⁸. The analysis showed many gig economy workers (85 percent) would work more often, if they could get paid more quickly. A separate study of 400 independent contractors in the US carried out by Everee⁹ in late 2020 also found:

Simplifying global payroll is not only about attracting the best freelance talent — it’s also a key recruitment approach for full-time staff. For example, recent ADP research¹⁰ shows the following factors make a difference when candidates consider employment offers:

Paying global suppliers, remote employees, and service providers can be resource-intensive, time-consuming, and costly. Firms that still rely on slow, paper-based processes to compensate gig workers may find themselves losing out on labor. The IRS calculates that 33% of employers¹¹ have made payroll errors that can result in billions of dollars of fine an decreased employee loyalty.

Having payees in various countries make it hard to control costs across different regions and currencies. Payees also grow frustrated when they have to pay fees or have limited access to funds. Wire transfers and automated clearing house payments take time to settle, while international bank transfers can create fees that add to company expenses and eat into gig economy workers’ incomes.

Embedded finance makes it possible for companies that are not in the financial services industry to provide financial products and services to customers under their own brand’s banner. The cost has been radically reduced because companies no longer need to build such financial products in-house.

For example, Nium simplifies payroll for multiple countries and currencies, with complete payment visibility, one simplified backend process, access to new global markets, speedy, real-time global payments, and a better experience for your suppliers and service providers. Importantly, payment recipients can choose how they want to get paid.

With embedded financial services, companies can send payments or expenses to global workers on company-branded cards. In this way, companies and marketplaces can give freelancers the payout flexibility they value. Payroll management is simplified, as the know-your-customer (KYC) process and onboarding are handled by the card issuer.

This removes the need for marketplaces to store bank account information. For companies, it widens access to freelancers in countries with low bank account adoption. By easily sending out funds to cards, companies can avoid the high fees for smaller payment transactions that add up across a distributed global workforce.

There are multiple ways for accounts payable professionals to pay gig economy workers — as well as a customized app for such workers to manage and receive payments instantly.

The race for global talent is only getting started. By simplifying global worker payroll, businesses can open up additional revenue by taking a cut of FX and providing locally preferred payment methods to attract and retain the best experts. Payroll should no longer be a barrier to hiring in emerging markets. Companies can win the global talent war by providing faster, flexible payments right at the point of need.