HR Tech in the Gig Economy: Managing Freelancers and Contractors

Published on 26 Jun 2024

gig economy

The gig economy, which comprises more freelancers, contractors, and short-term workers, has changed how people usually work in big ways. As technology improves, businesses are turning to the gig economy more and more to find a wide range of skilled workers, keep costs down, and keep their freedom. 

However, handling this part of the workforce comes with problems, like handling projects, communicating, ensuring rules are followed, and handling payments. Here comes HR technology (HR Tech), which offers creative ways to handle workers and freelancers well. 

In fact, 80% of HR professionals believe that incorporating HR technologies into their processes improves employee attitude toward the company, suggesting HR tech can positively impact engagement even for gig workers. This blog talks about how HR Tech is changing management in the gig economy. It discusses the pros and cons of using these technologies and the best ways.

See also: The Role of Machine Learning in the Automotive Industry 

The Rise of the Gig Economy

In the past few years, the gig economy has grown exponentially, thanks to technological improvements, economic changes, and shifting worker tastes. A McKinsey study says that about 162 million people in Europe and the US work in the gig economy separately. This trend isn't just happening in one field but also in IT, marketing, the creative arts, healthcare, and transportation, among others.

Businesses can benefit from freelancers and contracts in many ways, such as having more freedom, lower costs, and access to specific skills. However, managing a diverse and spread-out staff differs from handling full-time workers who work in one place. This is where HRTech is very important.

Key Challenges in Managing Freelancers and Contractors

Managing freelancers and contractors involves unique challenges that differ from those traditional employees face. Some of the primary challenges include:

Onboarding and Integration: Integrating freelancers into existing teams and workflows can be complex. Ensuring they understand the company culture, processes, and expectations is crucial for seamless collaboration.

Communication and Collaboration: Effective communication is vital for managing remote and freelance workers. Coordinating different time zones, managing project updates, and fostering teamwork can be challenging.

Compliance and Legal Issues: Freelancers and contractors often operate under different legal and regulatory frameworks. Ensuring compliance with tax laws, labour regulations, and contractual obligations is essential to avoid legal pitfalls.

Payment and Invoicing: Managing and invoicing for a diverse workforce can be time-consuming and error-prone. Ensuring timely and accurate payments while managing various payment methods is challenging.

Performance Management: Tracking and evaluating the performance of freelancers can be difficult due to the lack of direct oversight. Establishing clear metrics and feedback mechanisms is crucial for maintaining productivity.

HR Tech Solutions for the Gig Economy

HR Tech has many products that can help you deal with the special problems of managing freelancers and workers. These tools make things easier to do, work better, and allow people to work together better. Some important HR tech options for the gig economy are:

Freelance Management Systems (FMS)

Freelance Management Systems (FMS) are specialised tools that handle workers' or contractors' tasks. These systems can handle hiring, project management, time tracking, billing, and payments. WorkMarket, Upwork Enterprise, and Field Nation are all well-known FMS systems.

Project Management Tools

Project management tools like, Trello, and Asana are needed to organise work, set due dates, and track progress. These tools make it easy for freelancers and in-house teams to work together and ensure everyone is on the same page.

Communication Platforms

Good communication is essential for managing a distributed staff. Thanks to platforms like Slack, Microsoft Teams, and Zoom, freelancers can stay in touch and be involved with their work. These platforms allow real-time chat, videoconferencing, and file sharing.

Payroll and Payment Solutions

Workers can find it challenging to track their funds, especially when dealing with different countries and payment methods. Solutions for payroll and payments like Deel, Gusto, and Payoneer make it easier by handling payments, tracking compliance, and giving customers various payment choices.

Talent Management Systems

Talent management systems help companies identify, onboard, and manage freelancers and contractors. These systems offer candidate sourcing, skills assessment, and performance tracking features. Examples include Toptal, Guru, and Fiverr Business.

Compliance and Legal Tools

It is very important to ensure that work rules and contractual obligations are followed. Legal and compliance services are available on platforms like LegalZoom, UpCounsel, and Zenefits. These services help businesses understand complicated rules and lower their risks.

Time Tracking and Productivity Tools

Time tracking and productivity tools like Toggl, Harvest, and Hubstaff enable freelancers to log hours, track project progress, and manage productivity. These tools provide valuable insights into work patterns and help ensure timely project completion.

Benefits of HR Tech in Managing Freelancers and Contractors

Implementing HR Tech solutions offers several benefits for companies managing freelancers and contractors:

  • Streamlined Onboarding: HR Tech platforms automate onboarding, ensuring freelancers are quickly integrated into the company’s workflows and systems. Automated onboarding reduces administrative burden and ensures a consistent experience for all freelancers.
  • Enhanced Communication: Communication platforms facilitate real-time interaction and collaboration, ensuring freelancers are always in the loop. Improved communication reduces misunderstandings and fosters a collaborative work environment.
  • Efficient Project Management: Project management tools provide a centralised platform for managing tasks, deadlines, and project updates. These tools ensure transparency, accountability, and efficient resource allocation.
  • Accurate Payment Processing: Payroll and payment solutions automate invoicing and payments, reducing errors and ensuring timely compensation for freelancers. Automated payments enhance financial transparency and freelancer satisfaction.
  • Compliance and Risk Mitigation: Legal and compliance tools help companies navigate regulatory requirements and contractual obligations. Ensuring compliance reduces legal risks and fosters trust with freelancers.
  • Improved Performance Management: HR Tech solutions offer performance tracking and feedback mechanisms, enabling companies to monitor freelancer productivity and provide constructive feedback. Performance insights help optimise workflows and enhance project outcomes.
  • Scalability: HR Tech platforms are designed to scale with business needs. As companies expand their freelance workforce, HR Tech solutions provide the flexibility to manage increasing volumes of freelancers and projects.


The gig economy is changing how people work by giving businesses access to various casual workers. However, handling freelancers and contractors comes with problems that need special solutions. HR Tech solutions give managers the platforms and tools to handle this group of workers well, simplifying processes, improving communication, and ensuring rules are followed.

Using HR Tech can improve how companies handle workers and contractors, leading to more speed, productivity, and teamwork. Companies can also handle the challenges of the gig economy and get the most out of their freelance workers by following best practices and implementing the right HR Tech solutions.

HR technology will become increasingly important in shaping the future of work as the gig economy grows. It will help companies build flexible, quick-to-adapt, and productive teams. Using HR technology is not only a good idea but also necessary to succeed in the changing world of work.


Featured image: Image by jcomp


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