What to Know Before Hiring Freelancers for Your Small Business

June 12, 2018 Pete Jansons

If you’re among the 31 percent of small business employers who can’t find qualified talent to fill jobs, consider hiring freelancers or independent contractors. With an estimated 7.3 million people identifying themselves as independent workers (an increase of 62 percent since 2011), there’s no shortage of talent to choose from. Whether you’re a small business owner or manager trying to fill gaps in your organization or need to ramp up for an upcoming busy season, freelancers and contract workers are a viable, cost-effective option.

Benefits of Hiring Freelance Workers
Freelancers and independent contractors bring a host of benefits to your organization, including:

  • Saved money. Not only do independent contractors cost less than permanent full-time employees, but they help saves on costs associated with lost productivity.
  • Quality work. Not only are freelancers always trying to build their portfolios with work that illustrates their talents, they often rely on client referrals to get more business, so you can count on them to deliver high quality work that meets your satisfaction.
  • Flexibility. Hiring freelancers on a project-by-project or as-needed basis lets you quickly scale up for busier than usual periods or special projects.
  • Fresh ideas. While bringing an outsider in can feel like a risk, it can also be an asset. Independent workers tend to have experience in a variety of industries and can provide new insights and perspectives that may improve project results.

Tips for Hiring Freelancers and Independent Contractors

While you may be reluctant to hire contract workers or freelancers for various reasons - perhaps you have doubts about their reliability, or you’re worried about compliance issues - there are ways to mitigate those risks.

Have a kick-off meeting. Whether you meet in person, over the phone or via video conference, a kickoff meeting with the freelancer you are considering will give you a chance to clarify your expectations and agree on the details of the project. This includes the duration of the project, deadlines and - last but not least - payment.

Take a test drive. Even if the freelancer you’re considering has an impressive portfolio of work, you may want to consider giving them a small assignment ahead of hiring them for a bigger project. This will enable you to understand their work style and see if they can deliver on what you need in a given time period. Just make sure you pay the person for his or her time, even if it doesn’t work out.

The matter of money. Once you and your freelancer agree on an hourly or project rate, it’s also important to clarify when your freelancer should expect to be paid (at the end of the pay period, once the project is completed, etc.) and how (via PayPal, direct deposit, paper check, etc.).

Put it in writing. Put the details of your freelance arrangement in writing. Perhaps this seems like a no-brainer, but it can be an easy thing to forget - especially if you need a project completed ASAP. But having something in writing will be of critical importance should litigation arise.

Classify correctly. Misclassifying workers as independent contractors when they should be classified as employees (and vice versa) could lead to fines, penalties or other, more severe legal issues. Unfortunately, determining whether or not an independent contractor qualifies as an employee isn’t always a black and white issue. The U.S. Department of Labor offers some guidelines to help businesses determine the nature of the employee-employer relationship. When in doubt, you may want to seek the counsel of an attorney.

Plan for future needs. Start building a talent pipeline of freelancers and contract workers you can tap into as future needs arise. That way, you won’t have to make hasty hiring decisions if a last-minute need comes up. As your talent needs change, these workers also make viable candidates for full-time positions, too.

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