Is Your Program Leaking Spend to Unmanaged Freelancers?
- Cheryl Tracz
- Mar 26
- 2 min read
It Might Be Costing You More Than You Think
Across industries, contingent workforce programs are quietly bleeding spend—and taking on unnecessary risk—through unmanaged freelancer and SOW (statement of work) engagements. When managers sidestep formal processes and bring on independent contractors through quick-fix agreements, it may seem like a practical workaround.
But it’s a high-risk decision that could cost your organization dearly.
At Tracz Consulting, we specialize in helping companies uncover and address these exact vulnerabilities—before they become compliance violations or financial penalties.
The Risk Is Bigger Than You Think
New and evolving independent contractor regulations clarify that organizations must ensure every non-employee worker is appropriately vetted and managed. Relying on informal or unmanaged relationships, primarily through vague SOWs, exposes you to:
Worker misclassification lawsuits
Tax violations and fines
Reputational damage
Operational disruptions
When multiple vendors are involved, the risk compounds. Not all vendors are transparent about how they engage talent, especially in global markets.
Know Where You Stand
A bright starting point is a self-assessment of your non-employee workforce supply chain. Where are freelancers being used? Are they adequately classified? Are you relying on outdated contracts or vendor assumptions?
At Tracz Consulting, we guide organizations through this assessment and offer strategic advice to:
Identify hidden freelancer spend
Vet current EOR/AOR partners
Build a foundation for compliant independent contractor engagement
Avoid fines, disruptions, and rework down the line
What You Might Discover
Not all vendors are truthful about their compliance models or business practices. Just look at the ongoing Rippling vs. Deel lawsuit, where accusations of trade secret theft and unfair competition have raised serious concerns about transparency and ethics in the HR tech and global employer of record (EOR) space.
Speed and scale don’t have to come at the cost of compliance. With the right framework, you can support agile engagements without adding risk.
You can empower independent contractors to operate as legitimate, self-employed businesses—giving them flexibility while protecting your company.
Ready to Get Ahead of the Risk?
Tracz Consulting offers trusted, practical contingent workforce consulting to help organizations take control of non-employee management. We support your internal teams in identifying gaps, selecting the right partners, and building a compliant program supporting flexibility and growth.
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