Faster Payments

Topcoder On Minding The Financial Security Of Technology Contractors

Businesses are ramping up their digital capabilities during COVID-19 and are turning to gig marketplaces for sourcing talent. But all too often these technology professionals can find themselves waiting up to a month to collect payments, says Dave Messinger, chief technology officer at Topcoder. In the latest Next-Gen Payroll Tracker, Messinger shares the flexible payroll options that are becoming must-haves for hiring and retaining tech talent.

Gone are the days when newly hired employees could expect to spend their entire professional lives with just one or two companies.

Businesses change and evolve rapidly, as do their staffing needs, and workers’ professional lives now take more winding paths than they did in previous generations. These shifts have accelerated in recent years with the emergence of gig platforms that supply on-demand services and offer their workers scheduling flexibility.

These shifts have perhaps been particularly visible among highly skilled workforces, especially during the pandemic, which has motivated companies to ramp up their digital capabilities with aid from skilled programmers. Pandemic-related challenges have forced employers to find new ways to quickly attract and onboard talented workers.

Many are thus turning to gig marketplaces, which can help them connect to programmers and other technology professionals, Dave Messinger, chief technology officer at Topcoder, said in an interview with PYMNTS. 

Topcoder has seen interest in its services surge since the pandemic on the part of both clients and contractors — and the company is not alone. Gig work platform Freelancer.com reported “exponential” growth in new sign-ups during the early days of the pandemic.

Gig platforms and marketplaces face their own challenges in attracting and keeping talent, however, especially since they cannot offer the security of a traditional staff position. This helps explain why companies like Uber have spearheaded innovations in rapid compensation, allowing drivers to request instant payouts. Demand for flexible, reliable and prompt payment extends to knowledge-based professions as well. Topcoder views such options as important components of assembling and maintaining an attractive and reliable talent pool.

Adapting Pay For Changing Times

“The check is in the mail” is a dreaded phrase in almost any context, but it is especially scary for freelance or gig workers. Freelancers were often paid with paper checks prior to the rise of the gig economy, which has an on-demand nature that mandates faster payment options such as ACH and PayPal. Gig marketplaces such as Topcoder have adjusted to keep up with the evolving needs of gig workers around the world.

Topcoder’s members — as it refers to its contractors — have clearly shown where their preferences lie: 70 percent of them receive digital payments, and 30 percent use ACH. Offering payment experiences that are fast and seamless is almost as important as ensuring that gig workers are getting paid for their work. Gig marketplaces are responsible for making sure that these freelancers are paid for their work if it meets client specifications — even if the client backs out, Messinger noted.

“For us to grow our community, trust and transparency has been key,” he said. “[Contractors] are not going to trust us, they are not going to do the best work for our clients, and they’re not going to meet timelines unless we are … very transparent about what our expectations are [and] that we’re going to pay for these things.”

Another part of providing satisfactory payment experiences is giving gig workers payment flexibility. Different projects are built on their own timelines, which can sometimes leave gig workers waiting to receive payment for their work. Topcoder formerly imposed a 30-day hold on payments until an internal review could be completed to ensure the project was well executed and bug-free, but the company recently decided to shorten this period by half, partly in response to feedback from its members.

“One of the things we heard when the pandemic hit was that our members were not as greatly impacted, but [their] family members in other areas were, and they just needed more access to money to be able to help out their own friends and family,” Messinger said.

Faster access to payouts has been essential in the space, which must address the reality that the nature of work it sources via gig marketplaces such as Topcoder makes instant payouts inadvisable.

The Pandemic Catalyst

The pandemic has had severe economic and social impacts, forcing some companies to scramble to accommodate remote workforces and strengthen front- and back-office digital operations. Topcoder observed this firsthand and has been fielding more calls from companies looking to outsource IT projects since the pandemic’s onset.

“We’ve seen a much greater uptake in inbound sales calls and talking to new leads for clients,” he said.

This reflects a wider trend. Some companies are turning to contractors and temporary staffing at a time when traditional hiring processes are on hold. Some experts believe this may hasten a larger shift of “knowledge workers” toward freelance and gig relationships — a development that could further blur the lines between these types of platforms and traditional employers.

One of Topcoder’s clients — a large hotel chain — encouraged furloughed workers to take on projects it had outsourced to the company, for example, underscoring the dynamic nature of today’s workforce. Talent is more mobile than ever, and it may become increasingly common for workers to transition from contract-based work to on-staff positions and back again. These workers may come to expect compensation options that are fast, convenient and flexible, regardless of the particular employment classifications they have at any given time.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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