For many companies, hiring freelancers is a cost-effective way to expand their talent base without taking on the expense of full-time staffers.
But unlike full-timers, freelancers aren’t direct reports, and for the most part, the company must rely on their expertise and word that they’ll get the job done.
Just as in making a bad permanent hire, hiring the wrong freelancers could leave you and your business vulnerable.
“You want to check them out and their references,” advises Steve King, a partner at Emergent Research, a Lafayette, California-based consulting firm focused on small business.
Don’t go into the relationship blindly, he cautions.
Emergent recently teamed up with Intuit to release a study and forecast on the on-demand economy that predicts the contingent workforce, which includes freelancers, is expected to reach 43 percent of the U.S. workforce by 2020.
“The contingent workforce is pretty much anybody who has a non-traditional work relationship with their employer,” he explains.
This growth is fueled in part by companies’ increasingly looking for more flexibility and agility and trying to “avoid fixed commitments as best they can,” says King.
Make an effort to find the right people
With this growth expected to continue, companies need to take some precautionary measures to find the right people.
To start, word of mouth is always good to find qualified freelancers.
Conversely, if you use online sites like Freelancer.com or Upwork.com, the freelancers will generally have star ratings you can see, says Jim Coutu, the Lutz, Florida-based author of “The Employer’s Guide to Hiring Freelancers and Managing Outsourced Projects” (GatorData Press; $9.99).
Sometimes they may also include comments from past clients, he notes.
Look at their skill set and the number of jobs they’ve done, he recommends. “A large number of jobs is someone more experienced,” he notes.
Be very clear and specific on the scope and parameters of the job and ask them if they have everything they need before they begin the project, he advises.
This way there are no surprises later on, says Coutu.
You can establish checkpoints along the way, but don’t dictate how they perform the work or the hours they work.
“When the company starts to identify the means to achieve the result, it becomes an employee-employer relationship,” says Barbara DeMatteo, director of human resources consulting at Portnoy, Messinger, Pearl & Associates Inc., a consulting firm in Syosset.
Avoid misclassifying freelance workers
This could cause serious problems for employers, particularly if they’re misclassifying people as independent contractors instead of employees.
“It ultimately is the company’s responsibility to pay and classify this individual correctly,” says DeMatteo.
Given that, the employer shouldn’t provide the individual with a company email address, a phone extension or business cards, or reimburse them for tools and expenses, she notes.
Don’t say they have to report to the office or use the company software, and don’t provide them with training, because they’re supposed to be the expert, she notes.
They should also have a written, signed independent contractor’s agreement laying out the relationship, she adds.
Also, if you want ownership of any of the work or material they’re producing, that must be spelled out.
“On any kind of creative work, you should have an agreement saying you are buying all the rights and own all the rights,” says Janet Attard, who hires freelancers for her BusinessKnowHow.com, a Bohemia-based small business information website.
She advises testing freelancers on small assignments first to see how they do.
“You have to be on your guard a little,” she notes. “You will get people that aren’t what they say they are.”
If you find good freelancers, treat them with respect and pay them promptly, says Attard. “It gives you a little bit of an edge.”
36% The percentage of the U.S. workforce made up of contingent workers, up from 17 percent 25 years ago
Source: Intuit/Emergent Research