How Technology Can Help Your Company Effectively (and Compliantly) Manage a 1099 Workforce

Research from Statista estimates that by 2027, 86.5 million people in the United States will be involved in freelancing. Even if your business has ignored the potential benefits of contingent workers up until now, changes in worker and employer preferences mean this won’t remain the case for much longer.

While the use of 1099 contract workers offers several key advantages, effectively (and compliantly) managing this workforce can prove to be a significant challenge. Fortunately, a freelance management system that fully embraces technology can streamline your efforts so you can make the most of the contingent workforce.

Talent Identification

Remote work is highly valued among 1099 contractors. A 2021 Gallup poll found that 91 percent of U.S. workers who worked remotely at least some of the time wanted to maintain this option after the COVID-19 pandemic.

The use of remote workers gives your company access to talent from across the country — or even from outside it. However, this means that traditional talent acquisition methods may be less effective. Remote workers expect digital-friendly options when applying for projects.

To facilitate this, a branded talent landing page can go a long way in improving an organization’s recruiting efforts. Aside from listing open positions, these landing pages should aim to “sell” the employer brand and its benefits to make your company more enticing to top talent.

Hiring and Onboarding

When a 1099 contractor submits an application through your organization’s landing page, they deserve to experience a simple digital hiring and onboarding process. Automated screening tools can vet a contractor’s qualifications and ensure they are indeed suited for the job.

Many organizations utilize direct sourcing to build their own internal talent pools. Contractors are organized based on skills, experience level or other attributes in a dynamic labor cloud. This enables quick identification of qualified talent when a new position needs to be filled, which can significantly streamline the hiring process.

Of course, when interviews or other more personal interactions are needed, video conferencing and other messaging platforms can improve communications between the organization and the prospective contractor.

Digital onboarding can also enable 1099 contractors to get to work right away. Digital receipt and organization of necessary documentation for compliance and payroll ensures that contractors can become productive as soon as a hiring decision is made.

Worker Management

When so many 1099 contractors work remotely, effectively managing their day-to-day efforts can be a challenge. While you should never try to micromanage a 1099 contractor, a digital dashboard is necessary to ensure that both contractors and full-time staff are fully aligned on the scope of the work that needs to be done.

Digital project management tools such as Slack, Asana or Basecamp can be used to set up workflows and provide individual assignments and deadlines for each person working on the project. These communications tools can also streamline the check-in process for handling assignments. Many project management tools even send emails or push notifications to ensure that no message or deadline slips through the cracks.

Freelance management systems should ensure that 1099 contractors are given the appropriate level of access based on the type of work they are performing on behalf of the company. These digital systems ensure that everyone is on the same page, and that work is completed in a timely manner.

Payroll and Compliance

Managing payroll and compliance are common stumbling blocks for businesses that engage with 1099 contractors. Managing regulatory requirements can be quite complex, especially with different locations often having varying regulations.

The IRS invokes significant penalties for businesses that misclassify workers, even accidentally. States such as California have increasingly complex rules regarding whether someone is classified as a 1099 contractor or an employee. 

To alleviate these concerns, businesses will often partner with an employer of record (EOR), which serves as the employer for tax purposes. The EOR takes on the tasks and liabilities of traditional employment, using in-depth knowledge to ensure that all workers are classified in a compliant manner. 

Automated invoicing and flexible payment processes that are managed through the employer of record can further streamline your HR team’s responsibilities. Technology that facilitates these partnerships ensures that your team can focus on their core competencies, rather than get bogged down by regulatory concerns.

Worker Engagement

When businesses partner with an employer of record, they can put a greater focus on worker engagement — another area that can benefit from technology use. Your worker engagement initiatives don’t just maximize the productivity of your 1099 contractors. They can also play a big role in building your employer brand and providing a quality work experience — key areas that aid in ongoing contractor acquisition and retention efforts.

One example of how technology can improve worker engagement is mobile apps for worker communication. These tools give 1099 contractors an instant connection to the rest of your organization, making it easier for them to keep in touch and operate on a schedule that works well for everyone.

Qualitative feedback and rating systems are another valuable engagement resource that can provide much-needed learning opportunities. By giving 1099 contractors the ability to give feedback, your organization can identify areas for improvement to strengthen the employer brand. 

On the other hand, your own qualitative feedback can be used for future hiring efforts. The rating you give a particular contractor based on your experience with them on one project can help your team quickly determine if they should be hired again when similar needs arise in the future.

Streamline Your Workforce Management With myBasePay

If you need help managing a 1099 workforce, myBasePay could be the right technology solution for you. Our full suite of back-office solutions includes full-cycle onboarding, invoicing, payroll and compliance administration. As a provider of EOR services, working with myBasePay will give your team one less thing to worry about when it comes to managing a 1099 workforce.

Instead, you can focus your efforts on providing an engaging and rewarding employment experience that will get the most from your contractors — and encourage them to work with you again in the future.

Author: Cesar Jimenez, myBasePay CEO
Cesar A. Jimenez is an entrepreneur, investor, and military veteran with over 25 years of staffing industry expertise successfully leading technology staffing organizations. His expertise in the IT industry allows him to use his experience as a thought leader for talent acquisition, staffing, IT, and recruitment technologies with a passion for contingent workforce solutions. Cesar has held various leadership roles for both a global staffing organization and technology solutions companies. This expertise has enabled him to develop alternative workforce models that provide the agility for organizations to be competitive in today’s marketplace. In his spare time, he enjoys spending time with hisfamily, working out, and coaching high school baseball players.