Many American professionals are saying “goodbye” to the nine-to-five and embracing freelance work with open arms. The flexibility, pay, and remote options are attractive for workers. At the same time, lower costs and accessible talent are valuable to businesses that may not need or want to hire a full-time employee.
Hiring freelancers is an excellent way for companies to get the expertise they need without putting too much of a strain on their budget. However, hiring freelancers can be complicated and fraught with pitfalls for small businesses. Here are some tips to avoid common mistakes and hire freelancers effectively.
Common Mistakes When Hiring Freelancers
Not Understanding The Cost Of Hiring Freelancers
When hiring a freelancer, you need to be clear about what compensation will be given. You should also clearly define what type of compensation it will be and how that type of compensation will be delivered.
For example, most freelance workers are paid in these three ways:
- By hour
- By project
- Monthly retainer
According to a report from the freelancer website Upwork, freelancers in the United States earned an average hourly rate of $20 in 2020.
Not Checking References And Doing Interviews With Freelancers You’re Interested In Hiring
When you’re a small business, hiring freelancers can be a great way to save money and get the job done. But it can also be a disaster if you don’t do your homework.
Not conducting interviews with potential freelancers is a common mistake. For example, when you’re looking for a writer, it’s easy to just look at their portfolio and decide if their work is good enough for your needs. But don’t forget that writing ability isn’t all that matters. You also need someone who can fit into your team and get along well with other employees.
Another common mistake is not checking references for freelancers you hire as a small business. If you’re planning on hiring a freelancer, ask them for their references before you hire them.
If they’re reluctant to give out their contact information or give you details about their past employers, that’s a red flag.
Not Having Contracts For Compliance
It may be tempting to forgo contracts with freelancers if you need a job done quickly or if you have a history with a worker. However, contracts protect you from compliance issues, and in some states, contracts are legally mandatory.
For example, New York City’s Freelance Isn’t Free Act requires contracts for all freelance work over $800. Other states/countries have similar laws already or may in the future, so it’s a good idea to make it a company requirement to use contracts for all workers.
Companies that don’t carefully document their freelance workers with contracts are more likely to misclassify them, which can land them in hot water.
Not Having Clear And Precise Goals
Not having clear and precise goals for potential freelancers is a common mistake. You must be clear about what you expect from the freelancer to get the best results. The more specific your instructions and requirements are, the easier it will be for them to deliver quality work.
Define your project goals, break them into milestones as needed, and share them with freelancers before you hire them. This will help you find people who are a good fit for your project and company culture. It may also be helpful to invest in project management software like Trello to keep track of project progress.
Bottom Line
The freelance economy is booming. According to Upwork, freelancers contributed $1.3 trillion to the U.S. economy in 2021, up $100 million from 2020.
But while freelancing is an incredible way for small businesses to expand their workforce, it also presents some challenges. Small businesses may not understand how freelancers are paid and may forgo interviews and reference checks, thinking that a portfolio of work is enough to judge them by. They may also misjudge the importance of freelance contracts and goal setting. By working with an experienced team of professionals to manage your freelance workers, you can rest assured knowing your risks are being reduced and handled daily. NexusCW keeps up to date with the latest legislation compliance to help you hire freelancers confidently.
