Learn how the creator economy is transforming the marketing landscape, and how to cultivate partnerships to grow engaged communities at Social Media Week: The Creatorverse, May 16–18 in NY. Register now to secure your early bird pass.
It’s no secret that the nature of the U.S. workforce is rapidly evolving.
There is increasing pressure from constant and accelerating change, combined with talent migration dynamics unlike anything we’ve seen before, and it has created a reckoning as companies must reconsider how work happens in order to compete for the best and brightest talent.
Freelancers have been a steadying force in the advertising industry for a long time, and with more than half of U.S. workers expected to be freelancing by 2023, their importance in the new talent equation is unquestionable.
Once a tactic to fill a gap or escape a bind, calling on freelancers to provide depth of bench, introduce new skill sets, and inject diverse experiences and perspectives into a business, while tackling project-based work, has quickly become the new norm for the most forward-thinking and innovative teams.
The next step is carefully considering how they are treated by their temporary employers and teams. And since money is often where the rubber meets the road, payment terms for freelance talent should be at the top of every employer’s list of things to reimagine right now.
Mistreatment of freelancers
For decades, long payment terms have been a thorn in the side of freelance talent. Historically, brands and agencies have wielded outsized power that has resulted in poor partnership with the very people required for their businesses to remain competitive.
But times are changing fast, and the power dynamics are rapidly shifting in favor of talent. This means paying your freelance talent in a timely and dignified manner is not only the right thing to do, it’s a necessity if you want to get your work done.
Delaying payment is solely in the interest of the employer, and 30-, 60-, 90- and even 120-day payment terms are an egregious and common mistreatment of freelance talent. I’ve often referred to these payment terms as wage theft. Simply put, long payment terms for freelancers are a means for companies to get an interest-free loan from their talent. And it’s completely unacceptable.
No one should have to wait 120 days to receive a paycheck for work completed. We should not be setting the same payment terms for freelance talent as you would your software suppliers. These are actual humans who rely on this money to take care of the things that are important in their lives.
Getting paid on time can mean the difference between a freelancer covering their monthly bills and a financial disaster. Again, this is all while a company reaps the benefits of essentially an interest-free loan of the freelancer’s wages and their effort. More than ever before, freelance talent has options and plenty of them. They no longer have to accept disrespectful terms from their partners.
Aligning business goals with the times
As with many head-scratching practices within large organizations, these long payment terms represent incongruent objectives within the leadership of a business.
For procurement and legal teams, who want lower cost, longer payment runway and low liability, the longer the payment terms, the better. For the marketers leveraging the skill of the freelance community to create brilliant work, payment terms are yet another lever they can pull to attract the brightest talent to do amazing work.
As more of the workforce (and brands) turn to freelancers, companies have to examine the way they treat and pay this growing cohort of their workers, which will require serious, high-level conversations about aligning the goals of the procurement, finance, legal, talent acquisition and marketing stakeholders within the business.
Employer brand has never been more important than it is today, and the mistreatment of freelancers diminishes a brand’s ability to partner with a world-class team, even doing hard-to-repair damage to a brand’s reputation as a fair, thoughtful employer in the talent marketplace.
As freelancers become an integral part of every organization in marketing, paying them any less frequently than every other week (as often as we generally pay full-time employees) is going to seem completely absurd. We will look back at this practice one day in disbelief that we let it go on for so long.
Freelance talent is part of your inclusion and innovation strategy, which means the way you pay them should be as important to you as those business objectives. It’s time to make some noise and use the current talent crunch to create meaningful change in the processes and formalities that will allow businesses to move forward with a respected, cared for, wholly inclusive workforce.