Freelancers allow businesses to find talent at affordable rates, often at short notice. You can find someone to fill a position who may not work in your area, but remotely, and freelancers located overseas can work on something while you sleep and submit the requested research to you by your morning. Given the benefits of hiring freelancers, why isn’t it more common? Because of the mistakes many make that prevent others from utilizing them more often. Let’s look at the four mistakes people make when hiring freelancers.
Deciding Based on Price Alone
Freelancers may save you money by working for less than the local market rate, whether because they are located in a cheaper area in the United States or located overseas. In other cases, they offer to work for a lower rate because their work isn’t high enough quality to justify a higher rate. Never select a freelancer based on price alone, since you may have to spend time editing work or reviewing their code. If you hire the cheapest person instead of a somewhat more expensive, experienced pro, you may not be able to afford in terms of time or money the cost of correcting the cheap worker’s mistakes.
Failing to File the Necessary Forms
When you hire a freelancer, you pay them money for the work to be done without the hassle of offering health benefits or paying payroll taxes. However, this doesn’t mean there isn’t any legal paperwork involved. If you have someone involved in performing competitive analysis research, creating marketing campaign information or accessing your customer lists while cleaning up the data in your database, you should have them sign the appropriate non-disclosure agreements.
This legal document serves as notice up front that they are not allowed to divulge this information to others, and it gives you a legal basis for suing them later if they do. Confidentiality agreements may be necessary in addition to NDAs. Avoid non-compete agreements with freelancers, since they have to work with a variety of clients to pay the bills.
A freelancer is a contractor. If you treat a contractor as an employee, you are liable for payroll taxes and a host of paperwork with the IRS. A freelancer sets their schedule, determines how they will do their job and works for a variety of customers. If you require the freelancer to follow your schedule, tell them how to do their job on a day to day basis and insist they don’t work for anyone else while working for you, the IRS could classify them as an employee. One way to avoid this issue is tracking the work freelancers do without micromanaging them. Another solution is to give them breaks between assignments where you hire others to do similar work and encourage them to work for others. If in doubt, seek legal advice. This is especially true if you are consistently relying on the same contractor for key business services.
Lack of Support
The opposite of micromanagement is failing to support the freelancer. If you do not answer their questions in a timely manner, it is not their fault if they finish the project and generate a result you don’t like. If you don’t give them access to the data or tools they need, they are not at fault for failing to deliver on schedule. If you cannot respond quickly to a freelancer’s request for information or access to resources, assign someone in your organization to handle it in a timely manner. And never extend the scope of the project while assuming they can do it with the same time frame and budget.
Hire freelancers based on quality as well as price. Determine the correct legal forms such as nondisclosure agreements. Take care in advance to structure the freelancer’s projects to avoid them being classified as an employee. And provide adequate resources for the freelancer, including answers to their questions.