The composition of the global workforce has slowly but steadily changed over the last few decades. Full-time employment was once considered the norm, but this expectation has all but completely changed. Whether you’re discussing the public or private sectors, freelancers and other independent contractors have become more common in many operations.
This shift has become especially visible in the Philippines. With its large pool of young, talented workers, the country has become a global hub for remote talent. At home and abroad, locally-based Filipino freelancers are sought after for their skills, English proficiency, and competitive rates. As freelancing becomes more embedded in everyday business operations, organizations often face a key question: should they source talent through third-party platforms or hire freelancers directly?
As you might expect, the “right” answer always depends on context. Unfortunately, that context isn’t always so easy to understand, especially given that businesses have many other concerns. If you’re experiencing this conundrum, breaking down the challenge and asking the questions below should help you gain clarity on your hiring strategy.
1. Can You Keep Up with Payroll and Compliance Management?
Managing payments for freelancers can be tricky, particularly when they’re based overseas. Hiring platforms often (but not always) handle tax compliance and disbursements on your behalf, a perk that can streamline the process. Hiring directly, however, gives you greater control over all parts of the process.
In either case, your chosen payroll management system must be able to handle cross-border transactions, automatic transfers, and legal compliance. With a good tool, you avoid messy workarounds that expose your business to legal liabilities.
2. What Are the Fees?
Freelancer platforms typically charge service fees. Every platform is different, sometimes billing the employer, sometimes the freelancer, and often charging both parties. While these fees can add up, they generally also cover dispute resolution and other built-in protections, which can give you peace of mind.
On the other hand, direct hiring eliminates platform fees but shifts the responsibility for contracts, invoicing, and dispute resolution squarely onto your team. If you already have the infrastructure set up to handle these, then direct hiring could be the smarter move.
3. Can You Effectively Manage a Global Talent Pool?
While Filipinos do have a major presence on job platforms, many of these platforms also connect you to a global pool of freelancers. Depending on the markets you serve, this can be a major advantage, especially for niche skills.
Direct hiring, on the other hand, may severely limit your options to personal networks, referrals, or job boards. However, the relative geographic and cultural closeness of your potential hires can mean more accountability, which can be a plus for more sensitive positions.
4. Can You Vet Candidates Properly?
The most trusted hiring platforms often provide review systems, verified credentials, or past work ratings that make it easier for businesses like yours to assess quality upfront. Even so, there is a limit to how well you can vet a person remotely.
That’s another reason why direct hiring tends to be preferred for more sensitive jobs. Hiring directly can justify a more hands-on vetting process, such as trial projects or even in-person interviews. While it does require more effort, it can give you deeper insight into a candidate’s true capabilities.
5. How Soon Do You Need the Job Filled?
Generally speaking, third-party platforms allow you to post a job and hire someone qualified within hours. Direct hiring often takes longer due to the complications of sourcing, interviewing, and contract negotiations. If time is critical and the skills you need are niche, platforms may be the way to go.
6. Are You Trying to Create a Specific Culture?
Yes, even freelancers can become part of your company culture. Direct hiring can give you a better sense of whether a candidate is a good fit or has potential to be a long-time partner. If building loyalty and deeper collaboration is important to your organization, hiring directly could be the right choice.
In contrast, most platforms try to keep relationships transactional, with some even limiting direct communication. While a good relationship with your contractors is still possible, the barriers put up by the platform may make it much more difficult to sustain.
7. How Much Risk Can You Handle?
Unfortunately, there are plenty of unreliable parties everywhere. Whether you use platforms or hire directly, disputes and non-performance can and do happen. Part of the appeal of platforms is that they provide mediation and, in many cases, money-back guarantees. When hiring directly, you must depend on the strength of your contracts and your ability to enforce them.
8. Do You Want to Scale Quickly?
Platforms free you from the limitations of your readily-accessible labor pools, allowing you to hire multiple freelancers with different skill sets in a short period. Direct hiring enables closer vetting, and this usually makes it more sustainable for long-term growth. Scaling, on the other hand, may require more resources.
Flexible Hiring Can Lead to Stronger Foundations
There’s little reason to limit yourself to only doing direct hires or third-party platforms. With better tools and methods, your HR team can pick whichever approach best aligns with your priorities at any given time.
In any case, the important thing is to make sure your freelancers get paid. With reliable business deposit solutions, you should gain the flexibility to support your chosen approach without the need for risky workarounds. Take the time to build the right hiring and technology foundation, and you’ll always be able to access the talent you need.
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