The Platform Economy

The job market from ten years ago no longer exists. Learn how these three models converge in the demand for flexible work.

Staffing agencies face competition

Specifically, from intermediaries and freelance platforms. As a flexible worker, you seek security, hassle-free assignments, and a smooth processing experience.

How do these needs and challenges come together in the platform economy?

We’ve researched the key differences between staffing agencies, intermediaries, and freelance platforms for you.

There are significant differences among the three models

There are major differences among the three models. However, they all cater to the demand for flexible work. Therefore, you can find opportunities as a flexible worker through staffing agencies, intermediaries, or freelance platforms.

How do you distinguish between them? And where is the platform economy headed?

1. The Staffing Agency
   Staffing agencies traditionally act as intermediaries between job seekers and employers looking to hire. They actively fill vacancies with employees they have on their own payroll. The agency sends them out to companies where they will work.

Additionally, some agencies have their own flex pool, enabling them to act as intermediaries.

2. Intermediaries
   Intermediaries actively match contractors with clients. Contractors are often freelancers who work for companies. Intermediaries facilitate connections in two main ways:

• With involvement
  The intermediary has contracts with both the contractor and the client. The intermediary guides and brings the two together.

• Only mediation
  The intermediary has a contract only with the client. The contractor independently establishes an agreement with the client. There’s typically no contract between the intermediary and the contractor. If the intermediary remains involved after the introduction, a contract may be drawn up.

3. Freelance Platforms
   A freelance platform works like an online job board. The platform facilitates the meeting of supply and demand. Additionally, the platform can assist with administrative processes related to the assignment.

It’s generally up to the contractor and client to agree on the terms of the contract and settle them independently.

Invoicing works differently for each model

A significant distinction lies in how invoicing or payment is handled across the three models.

• Staffing Agencies
  A staffing agency hires the employee directly and then assigns them to the client. The client pays the agency, and the agency pays the employee's salary. The employee receives a fixed salary with minimal administrative hassle.

• Intermediaries
  No salary is involved. Instead, the intermediary typically earns a commission or fee upon successfully making a match. When mediating between a freelancer and a client, they handle the invoicing between themselves. This can happen between the freelancer and the intermediary or between the freelancer and the end client.

• Freelance Platforms
  Freelance platforms mediate by focusing on facilitating supply and demand. Some platforms make invoicing and administration easier for both clients and freelancers. Others only connect the two parties, leaving invoicing and administration to them. This can result in relatively time-consuming administrative work for both clients and freelancers.

With or without a contract

Similarly, staffing agencies, intermediaries, and freelance platforms differ in how they handle contracts.

• Staffing Agencies
  Staffing agencies hire employees under an employment contract. This is typically a temporary contract with a fixed salary. The agency also signs an agreement with the client for the employee’s placement. Employees have little to worry about in terms of administration.

• Intermediaries
  Intermediaries are actively involved in assignments and the underlying contracts. Once a freelancer accepts a job with a client, the intermediary’s role concludes.

• Intermediaries "with involvement"
  Intermediaries play a more active role here. They remain involved through the agreement with the end client and serve as the contracting party with the freelancer, effectively acting as the employer. Managed services providers (MSPs) commonly offer this type of service, removing the legal risk from the end client.

• Freelance Platforms
  Freelance platforms bring freelancers and clients together in a flexible pool. Typically, they operate with a service contract. Most platforms have general terms that both parties must agree to, allowing clients to hire freelancers flexibly without direct platform involvement. Conversely, freelancers are guaranteed the flexibility to accept assignments as they choose, forming the flexible workforce that clients seek.

United in the demand for flexible work

Staffing agencies, intermediaries, and freelance platforms ultimately share the same goal: to facilitate flexible work. Freelance platforms, in particular, are still evolving, offering more flexibility than staffing agencies or intermediaries.

However, this often means clients and freelancers must invest more time and effort in handling administrative tasks and invoicing.

Simplifying administration and invoicing

Freelance platforms like Temper and Newcreators are working on ways to make things easier for everyone. They offer features like automatic invoicing and instant payments.

This saves both clients and freelancers a lot of time. They maximize flexibility by connecting the worlds of clients and contractors.

These platforms help shape the platform economy.

Finqle for staffing agencies, intermediaries, and platforms

At Finqle, we facilitate automatic invoicing and direct payments for staffing agencies and intermediaries. We streamline the systems of platforms, clients, and freelancers to make things easier for everyone involved.

This eliminates unnecessary administrative hassle and saves time. It also prevents errors and provides insights into the collaboration between both parties. Interested? Feel free to contact us.