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Hiring Freelancers for Your Startup? Consider These Pros and Cons

Updated Jul 14, 2023

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To get a new business off the ground, it’s essential to keep the speed and quality of development at a high rate while balancing the costs. This is why startup founders are always on the hunt for diverse, cost-effective talent, which often draws them to freelancers.

There are lots of good reasons to hire freelance talent, instead of investing in full-time employees right away. However, working with contractors does come with some risks. Here are some important pros and cons to consider when thinking about hiring freelancers to help grow your startup.

The benefits of hiring freelancers

If you’re considering hiring freelancers, there are five major benefits you can look forward to.

Availability

Today, finding and hiring freelancers has become relatively quick and painless, especially with the rise of platforms that assist in finding and hiring workers online. Such platforms enable business owners to streamline the entire hiring lifecycle, from posting job offers to selecting and working with the best-fit candidates. You can also track your freelancer’s performance and choose a convenient payment model (hourly rate or fixed price), depending on the scope of work you need.

Flexibility

Freelancers can be an excellent staffing solution for companies that need the flexibility to scale their workforce larger or smaller at a moment’s notice. This level of agility is great for startups that are still determining what level of staffing they will need.

Cost savings

Another benefit of hiring freelancers is the price of services. According to the recent Global Freelance Income Report, the worldwide average hourly rate of a freelancer is $28. Although this is much higher than the average rate of $21 two years ago, it is still less than what you would likely pay an employee in a similar position. This is because of the additional nonsalary compensation you must pay for employees. When working with freelancers, you are free from the cost associated with health insurance, infrastructure setup, sick leave and other expenses related to hiring and paying in-house employees.

Diversity

Hiring an employee outside your city, state or country can come with a lot of extra steps that are often complicated for small businesses to tackle. This limits the talent pool you can hire from. With freelancers, you are not limited to one location ― you have the power to search globally. This is especially relevant for countries, such as the United States and the United Kingdom, where the demand for tech talent exceeds the local supply.

Skills and expertise

Hiring a freelancer means having the freedom of choice among varying skill sets. You can find workers specializing in even the most hard-to-find technologies or with background experience in emerging areas, such as artificial intelligence, data science, machine learning and Internet of Things. This can be especially useful if you have a particular project or job that requires a worker with an advanced skill set.

FYIDid you know

There are many ways to find the best freelancers. For example, here are 10 popular freelance websites that gig economy workers rely on.

The risks of hiring freelancers

If you’re considering hiring freelancers, there are five potential limitations to be aware of.

Missed deadlines

Many freelancers juggle multiple projects simultaneously to make the most of their time. However, they sometimes can’t realistically evaluate the scope and timing required to complete each separate task and put too much on their plate.

To cope with a growing amount of work, they focus most of their time and energy on projects that offer higher wages or have a deadline coming up. Consequently, they can fall behind schedule with other responsibilities and miss their deadlines.

Communication

Effective communication is integral to business success. However, you may find it difficult to communicate with some freelancers. Due to the heavy workload and irregular schedule of freelancers, their response time to urgent requests is often long compared to your in-house employees. This can become a problem if you need them to complete an urgent project with a tight deadline.

Lack of commitment

Low commitment is a common issue among remote freelance workers. Due to the vast availability of choices and lack of contractual obligations, they may quit your project abruptly in favor of another or keep it on the back burner until the deadlines start closing in. If a freelancer decides to bail on your project at the last minute, you may be left scrambling to pick up the pieces. This level of instability can be a problem for some employers.

Quality control

Hiring a new freelancer is a risk. You won’t know for sure if they can do the job (or do it well) until you give them a shot. This can leave you with varying levels of product quality throughout your organization, based on each freelancer that comes and goes. What’s more, some freelancers may not have the necessary software and tools, which also affects project quality.

Security

Transparency and security should be a top priority for startup founders working with remote freelancers. Employees are known to be the weakest link within any organization’s cybersecurity chain, and you can expect temporary employees and contractors to top that list. Freelancers have no loyalty to you, and yet they have access to your company’s systems, data repositories and process documents.

Remote cooperation often limits your ability to control the entire process. Therefore, it’s important to set clear security guidelines you want your freelancer to follow as well as conduct regular checks to ensure your assets are kept safe.

TipBottom line

If you want to mitigate some of the potential risks of hiring a freelancer, here are 17 things to look for when hiring freelancers.

Tips on effective cooperation with freelance workers

If you do decide to hire freelance contractors to help you grow your business, here are a few important tips to follow for a solid working relationship:

  • Ask your colleagues for recommendations or contact an experienced staffing company to provide you with a base of reliable and vetted freelancers.
  • Use platforms that provide guarantees and examine the online reviews and former work experience of potential candidates. Cooperation via freelance workplaces also simplifies the payment process between different locations.
  • Explore the market specifics of your target country and consider the time and cultural differences before making any hiring decisions.
  • Try to keep your team stable ― work with trusted freelancers on a long-term basis instead of constantly engaging new people.
  • Keep your communication lines open, arranging regular standups and video calls to ensure everyone is on the same page.
  • Use a set of tools for task tracking, continuous integration and shared repositories to keep track of the team’s progress.
  • Create a hybrid team chat where your dedicated employees can communicate with freelancers to maintain a sense of integrity between freelance and in-house workers.

Overall, cooperation with freelancers entails both benefits and drawbacks. Some of them might not live up to their promises or meet your expectations while others might help you solve a myriad of critical and urgent issues in a matter of days. However, by following the tips above, you’ll avoid a number of pitfalls and drive maximum value from working with freelance specialists.

Igor Tkach contributed to this article.

Skye Schooley
Senior Lead Analyst & Expert on Business Operations
Skye Schooley is a human resources writer at business.com and Business News Daily, where she has researched and written more than 300 articles on HR-focused topics including human resources operations, management leadership, and HR technology. In addition to researching and analyzing products and services that help business owners run a smoother human resources department, such as HR software, PEOs, HROs, employee monitoring software and time and attendance systems, Skye investigates and writes on topics aimed at building better professional culture, like protecting employee privacy, managing human capital, improving communication, and fostering workplace diversity and culture.
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