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.
If you’re considering hiring freelancers, there are five major benefits you can look forward to.
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.
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.
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.
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.
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.
If you’re considering hiring freelancers, there are five potential limitations to be aware of.
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.
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.
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.
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.
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.
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:
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.