[Executive Edge] Protecting Filipino freelancers from non-payment
While it is beneficial to talk about how well the freelancing industry is doing in the Philippines, we should not forget the problems that come with such growth.
Evan Tan, the regional director of Southeast Asia of Freelancer.com, believes the biggest issue facing Filipino freelancers today is non-payment.
Non-payment is exactly what it sounds like: An employer will hire a freelancer and have him complete freelance work, either in the form of a service or a deliverable, only to stiff him on the final compensation. When the freelancer inquires about the payment, the employer will generally stall and stall or not even respond at all.
Tan said that Filipino freelancers are largely powerless when these situations arise. He explained that freelancers can hire a lawyer and take the employer to small claims court, but the benefits with this recourse almost never outweigh the risks.
“So it's kind of like a deterrent as well for freelancers – you have a legal course of action, but then again would you actually opt for that legal course of action when you can work on the next project and earn more money?" Tan asked.
Erasing the stigma
Tan thinks that the problem may be rooted in how Filipinos view freelancers. He says that most of us still stigmatize freelancers as people who are not really professionals and got into the industry only out of necessity.
“It's really the view of a lot of employers here in the Philippines that if you're a freelancer, you're basically in between jobs or you're not competent enough to actually be in a multinational company,” Tan said.
Because of this perspective, freelancers become targets for the kind of abuse that non-payment represents. Other than using sound judgment when researching and evaluating prospective employers, Tan said that the most basic way that freelancers can protect themselves is with an escrow system.
Most online freelancing platforms, Freelancer.com included, have an escrow system in place that requires the employer to deposit money. The money is released to the freelancer once the work is done and the employer is satisfied.
The Freelancer.com system also has a mediation service that protects both parties if either feels that there was an issue with the payment for the project.
Freelancer.com needs these checks in place as it ventures out into the real world. Earlier this year, the company launched Local Jobs, a feature that allows Filipino freelancers to find jobs in their local communities.
Tan believes this feature is a natural extension of the mission of Freelancer.com, which now has over 16 million freelancers globally.
“As we got these professionals to come on board and connect them with opportunities worldwide, it only made sense to enable them to easily get jobs in their own localities as well,” Tan said.
Yet even if Local Jobs fits directionally with Freelancer.com’s overall goal of giving as many people as many jobs as possible, there are still challenges to contend with in conducting offline work. This applies both to employers as well as the freelancers themselves.
Part of this challenge is rooted in the difference in scope. With online freelancing, it is limited to jobs which can be easily done remotely and has an output or deliverable whose quality is readily apparent. With offline freelancing, the possibilities are much more broader.
“Any kind of location-specific project can be offered as a Local Job – events management, electrical services, plumbing, catering, carpentry, photography, etcetera,” Tan said.
Though the work may be done offline, Tan still encouraged freelancers to transact and keep their major communications on the Freelancer.com platform. He said that this will allow the Freelancer.com team to review the files that have been uploaded, as well as the conversations that they have had, in the event that mediation ever becomes necessary.
Local Jobs will hopefully continue doing what it can to address any potential concerns of non-payment, so it can help small businesses around the country. According to Tan, 99% of businesses in the Philippines are small and medium-sized enterprises (SMEs), and they contribute 32% of our country’s gross domestic product (GDP) and hire 61% of the workforce.
“What does this mean?” Tan posed. “The backbone of our SMEs are our competent Filipino professionals.”
The first 10 years of a business, Tan said, are a make-or-break period, so these entrepreneurs need to find competent work immediately. This is ultimately the need that Tan hopes Local Jobs will address. He argued that it is a win-win for both parties.
Thus freelancing provides a great setup wherein an SME does not need to hire a self-employed Filipino professional full-time, while also giving the Filipino freelancer the freedom to take on various projects and simultaneously assisting local SMEs, Tan said. Freelancers can, of course, still benefit from taking freelance projects from abroad. – Rappler.com