Two hundred years ago, Americans anxiously shouted “the British are coming”. Well, they’re back, but this time to provide freelance talent to American businesses across the country. And it’s not just the British who are coming – platforms like YunoJuno.com, Distributed.com, Talmix.com, Underpinned.com and others. They are also independent German platforms like Vicoland.com and WorkGenius.com, French platforms like Beager.com and Malt.com, Spanish platforms like Outvise.com, Australian platforms like Mash, Brazilian platforms like Ollo.is and African platforms like Andela. com.
But accessing the world’s largest industrial market requires a thorough understanding of US rules and regulations, and platforms and individual freelancers who don’t take the time to understand how to operate in a compliant way in the US are in trouble. Fitz Ventura, CEO of 1099.com, an insurance expert, recently described a situation where a large company was hit with a massive fine for breaking the rules.
So what should a freelancer or a freelance platform do? I asked Cesar Jimenez, CEO of Mybasepay.com and ProsourceIT.net, and global freelance compliance expert, to help readers understand what it takes to enter the freelance market in the United States. United effectively and compliantly. Here he shares what to expect:
Cesar, how do you see the US personnel market in 2022? Current forecasts are for block endowment revenue to rebound strongly. The United States took a hit of 11% in 2020, but grew 16% in 2021 and continues to show strength. We are seeing layoffs in some companies, but it’s also a very tight market overall with nearly two jobs open for every unemployed worker. The IT staff and freelance segments are clear market share leaders, and healthcare is a particularly strong segment. Due to the tightness of the market, companies are looking beyond traditional sources and expanding their recruiting efforts to Twitter, Facebook, Instagram and even TikTok.
Is it still a seller’s (talent) market? Yes. It’s always difficult to find both the best full-time talent and freelance or contract talent. The most successful companies understand the value top talent places on flexibility. Out of necessity, employers in many industries and geographies are now moving away from the traditional 9 a.m. to 5 p.m. schedule as an incentive. And the ability to work from home full-time or on a hybrid basis is now more of a standard offering than a perk.
Compared to other countries, what is unique about operating in the United States?Size, margin and category are three important areas of difference. Let’s start with the size: according to recent statistics, the total global size of the recruitment industry is approximately $500 billion. The American share is estimated at 150 billion, or about a third of the total. Margin is a second area that is important. The strong and growing demand for freelance talent (over 90% of large companies rely on freelancers to supplement their workforce) also means that it can also be more profitable compared to average margins in other parts of the world. world.
What do you mean by category? Regions differ in indie talent provided by local indie platforms. for example, the UK has a strong tradition of excellence in independent marketing, advertising and public relations. The EU benefits from the strength of technology, but also from independent advice and interim management. Asia is progressing in several areas, as are Africa and Latam. The United States, of course, is strong in most freelance categories and in a large number of verticals; however, the size of the US market as a whole offers substantial opportunities in most areas. To give you a big example, recent surveys estimate the talent gap in the United States in just one area of technology – artificial intelligence or AI – at more than 300,000 professionals.
Is there one law for the country, like in many others, or do states and even municipalities have competing rules? The American political and legal system is complicated in most areas, and certainly in the freelance and recruiting sectors. Careful international readers know that individual states have a great deal of autonomy in making laws, and each state is likely to be unique in its choice and selection of regulations governing self-employment and contract work. Thus, the rules in New York can be very different from those in Florida, Texas or California. In addition, cities within states have enough autonomy to establish their own regulations. If you want to establish a business base for your freelancers here in the United States, it is important to plan which parts of the country you will prioritize based on business and regulations. Sticking to general regions will help minimize your exposure to regulatory oversight. Going national from day one is a challenge.
Freelancers are often confused by the requirements of EoR and AoR services. Can you explain these terms to readers and their importance? When a company hires a freelancer, they assume responsibility for the duties, costs, and responsibilities of the job. But not all companies want to take on this responsibility. The alternative is to use an official employer: the EoR or Official employer is an organization that serves as an employer for tax purposes while the employee performs work at another business. EoR assumes responsibility for the traditional duties and responsibilities of the job. The EoR manages all personnel functions for the freelancer and is an efficient and fast way to outsource payroll and HR functions. The company pays the EoR a flat rate for each hour worked by the employee, and the EoR manages all the tasks. It’s no surprise that EoR services are particularly useful in dealing with payroll processing and employment laws for employees in multiple states. The EoR stays up to date on state and local laws, so you don’t have to worry about learning and complying with laws in multiple places. And, when a company wants to hire an employee from another country, but does not have an entity in that country, the company can use an EoR. The employee is still working for the company, but the employer of record handles payroll and HR issues in that local country. With the rise of remote work trends, global EoRs are poised to become an essential part of the global employment ecosystem for companies looking to hire anyone, anywhere. Registrar or AoR is similar to EoR and manages the relationship between a business and an independent contractor or freelancer. It is important to note that the company must properly classify and administer freelancers or face significant fines for misclassification. For this reason, most international platforms and domestic companies rely on AoR services to control, identify and properly administer the freelancer. For example, a well-known company was recently fined several thousand dollars a day for misclassification.
You’ve been running this business for a long time. What is your advice for global talent looking to work in the United States? The best advice I can give, the US recruitment market is large and complex, and offers great opportunities for thoughtful and prepared entrepreneurs. Number one: walk before you run. Lead with a niche that you are strong in, that is in demand, and market your unique ability, experience, or relationships. Partnerships help you get there faster. Look for partners that are complementary and where the combination creates value, for example, where 1 + 1 = 3. Do your homework on compliance and put in place the right infrastructure and relationships to support your business and, our suggestion , to outsource this infrastructure to experts like Mybasepay.com. The competition is real and tough, so you’ll need to focus on marketing your capabilities, building customer relationships, and investing your resources in delivering great talent rather than managing internal processes and compliance.
Finally, what’s next for America’s independent economy in these difficult economic times? I’m optimistic. Freelancing often works well during times when companies are slowing full-time hiring or reducing staff. Remember that the work goes on and freelancers often provide a quick and economical alternative to expensive full-time hires. But be smart. Freelancing is a big tent, and different categories of freelancing are differently affected by economic circumstances. While some technology areas like AI may continue to be in high demand, other categories like copywriting may well see a loss of altitude as ad revenue declines.
Long live the revolution!