The UlTimaTe GUide To SoUrcinG and manaGinG FreelancerS · This guide will help business owners and Those in charge of resource To discover The added value of freelancers, and how

The UlTimaTe GUide To

SoUrcinG and manaGinG

FreelancerS

Find freelancers in a flash, lower your project costs and save valuable time with Proffy

This guide will help business

owners and Those in charge of

resource To discover The added

value of freelancers, and how

To manage Them effecTively

wiThin your workforce.

There has been a staggering increase in the number of

freelancers in the last decade, with recent years seeing

significant percentage growth in both the number of freelance workers and the change in attitude towards

them amongst businesses. As we see advances in

technology for communication needs, workplace cultures are increasingly adapting towards a more agile solution than the traditional 9-5 for their staff.

There are 53 million people doing freelance work in the US, that’s 34% of the national workforce

(1). In the UK there

are an estimated 5 million workers in some form of self-employment and 1.4 million freelancers with a worth of £109 billion accumulatively to the British economy in added value. It is also predicted that by 2025, 50% of both the US

and UK workforce will be freelancers or self-employed. Attitudes are changing from the mentality that workers should be at their desk to do a good job, to appreciating flexible working solutions. A recent study showed 78% of

the UK public think freelancing and flexible working help promote a good work/life balance.(2)

But employing freelancers whilst on the increase, isn’t yet the norm, so it can be difficult to know where to start in finding and hiring the right people. Whether you are an SME or larger business, this guide will talk you through each stage, from finding the right freelancers, getting the most out of their skills and maintaining a professional relationship with them to ensure they are part of your company’s future success.

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53 MILLION FREELANCERS IN THE US

5 MILLION FREELANCERS IN THE UK

50% FREELANCE PREDICTED FOR US & UK

78% OF PEOPLE ARE IN FAvOUR OF FREELANCING

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If you’re looking to scale your business, freelancers can help test new services before you employ full-time staff and commit to the time and cost associated with an increased head count.

Companies hire freelancers for a number of reasons, one of the most common is for them to fulfil specific tasks and projects that the business doesn’t have the skills in-house for. This can be everything from admin and office support, IT, design, development and copywriting, through to research and analysis.

Be aware there are restrictions on the amount of time and responsibilities freelancers should have before they are considered your employee, and therefor liable for corporate benefits.

Freelancers can be brought on board to be a fresh pair of eyes on a problem you’ve been trying to solve, or to share their specific experience with your team to bolster their capabilities.

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PRO’S AND CON’S TO HIRING FREELANCERS

Working with freelancers you are more likely to cut out the frustrating experience of waiting for long notice periods before someone can start work, compared to an employee. They also reduce time and money invested into permanent hires if your business needs change quickly.

If you require senior support when your staff are away or sick, freelancers can fill these gaps on a flexible basis.

Freelancers can increase your geographical coverage and allow you to attract talent to your business which would have otherwise been inaccessible.

There are significant cost benefits for businesses who implement a hybrid employment model. Facilities costs such as office rents for example are constantly on the rise, therefore it allows a business to remain lean and scale their operation to meet customer demand.

Freelancers can work with multiple businesses, you have to trust they don’t share company information by putting contracts in place to protect your work.

Freelancers need bookings, so they often work on a ‘first come first serve’ basis with their clients, making it difficult for you to plan long term.

Communication can be more challenging if you don’t implement the correct collaborative technologies and document storage/sharing can pose a security risk if not managed appropriately.

Staff employed in agencies often have a multitude of skills, particularly in the creative industries. The advantage of freelancers is that they tend to focus on a few skills they do welll.

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WHAT MAKES A GOOD FREELANCER?

Opting for the cheapest freelancer is not always best. The ones who charge higher rates do so for their experience, their flexibility and can often complete tasks quickly and autonomously.

This also applies to the task at hand, if it’s an entry level task it’s not always best to get entry level freelancers. The advantages of senior freelancers willing to do those tasks are that they are far more efficient at them, make less mistakes and bring their experience to the table to challenge processes and ideas.

Good freelancers know they need to be flexible to your business needs. Last minute changes to projects should be expected and handled appropriately.

This makes it easy for you to find one suited to the task at hand. Plus you can choose by experience, such as bringing in senior freelancers with relevant experience that can apply those learnings to your projects.

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WHERE TO FIND FREELANCERS

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Sourcing freelancers through social media and job adverts is the traditional but time consuming route to hire.

No longer do companies struggle to find people for freelance project work, the talent pools are vast and are growing by the day. The issue lies with shortlisting the right person for the job. Platforms such as Upwork and Freelancer etc. will increase your speed to market, but the quality can be hard to measure and it’s not currently a scalable model without becoming disjointed.

As a business owner, you either need rigorous in-house talent sourcing processes or a company which can provide you with a trusted source of skills, with time and cost efficiency. Traditional recruitment is undeniably expensive and ineffective at times, this said, there are some modern companies which are reforming how this service is being delivered.

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You really need to flip this question on its head from the outset. First of all, why would the freelancer want to work with you? Once you have established that, you will have a much better response rate. If you send out a task list and get immediate responses of acceptance with no questions asked, that’s a good indicator that the freelancer is picking up the scraps and is only interested in making money.

The questions that you ask shouldn’t be obvious. People, by nature, will try to offer you the answer that you are looking for. Cliché questions will get cliché answers. Here’s an example; “We have found that freelancers often fall into two brackets – task orientated or project orientated. Which are you and what do you perceive to be the difference?”

There is no right or wrong answer to the above, it’s the explanation that will uncover their train of thought and provide you with character and motivational insights.

Conducting video calls is both a time and cost effective method to adopt with freelancers, it also doesn’t restrict you geographically.

Testimonials should feel like handing out a top trump to a freelancer – they should have nothing to hide and be open about who and what they have worked on. If they aren’t, alarm bells should ring; unless of course they are just starting out and therefore you are hiring for will and not for skill.

Breaking down the project deliverables into phases can be a sensible approach, as it gives you the opportunity to test the quality of the freelancer before making the decision to integrate them into your team or client. It’s always best to start off with a small project to test they are the right freelancer for your needs.

The process of obtaining references is time consuming and sometimes ineffective, hence the reason that using a 3rd party can provide more immediate feedback, reviews, past projects etc. This said, you should always combine this with a screening process which is tailored to the outcomes that you want to achieve, whether short or long term.

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CONTRACTS AND NEGOTIATIONS

Many freelancers appreciate being made to feel part of your business culture and team, so invite them to inductions, team lunches and nights out, but don’t require them to do the social side, it’s just nice to be asked.

Remember you are paying them for their productivity, so don’t waste their time on internal meetings when not needed and avoid involving them in large volumes of company emails.

On-boarding freelancers requires the correct contracts and rates to be agreed upfront. If you are a smaller business and want to remain nimble, outsourcing should be considered so that you can maintain focus on the project. Even larger companies benefit from having a ‘middle man’ as it reduces the possibility of friction during the negotiation and can give the wrong impression to a freelancer if you start squeezing their prices from the outset.

Should you ask freelancers to reduce their rates? If you are offering long term work and increased security for them, they could consider it. But remember, they have set their rates to cover quiet periods, tax, insurance and their own business overheads, so reducing rates should not be expected especially for short term projects.

Absolutely you should negotiate, however build trust first and demonstrate to them that you are client worth reducing their rates for. After all, the same goes for the freelancer, if you weren’t open to paying their rates, why are you talking to them in the first place? Negotiations are always better received when there’s some leverage and proof in the pudding – that goes for both parties.

Manual processes can kill your productivity, so ditch the spreadsheets and leverage technology to manage your people and projects. This applies to companies of any size, you should set the business up with scalability in mind, re-engineering manual processes after winning new customers or experiencing growth can cost you in the long run.

Your freelancers may work for your competitors, so protect your work with NDA’s. You can use additional security measures such as container technologies which restrict file access, but doesn’t block them out of the company network entirely.

Budgeting is one of the most critical aspects of running a profitable business which involves independent workers and so often it’s not given the attention it deserves. Make sure that you are monitoring projects individually; budget allocation, project costs and then either redistribute budget or account for increases.

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RULES AND REGULATIONS OF IR35

LOOKING AHEAD

To future-proof your business from IR35 rules, it’s important to not only get clued up as a business owner, but also ensure your HR department and anyone else responsible for hiring freelancers, know the do’s and don’t’s.

Compile a policy document that details your exact hiring process and ensure everyone involved follows it to the letter. This includes payroll and management systems to make sure you stay compliant.

The rules around IR35 are complex and putting new policies in place can be time consuming, which is why many businesses outsource the management of freelancers, for greater peace of mind.

STayinG complianT

The government is cracking down on companies who abuse their employment status, so it’s important that you understand regulations such as IR35.

The best way to stay on the right side of the law is to consider the working relationship between your business and freelancers, right from the start of working together.

Freelancers must be working in a business to business capacity, and their role should not be the same as a full time employee.

If you don’t categorise how your freelancers work, you risk an investigation by HMRC. This will bring tax bills and even fines. If HMRC rule your freelancers have undertaken the same role as a full time employee, then you’d be liable for national insurance and tax payments.

You must make sure that the projects you work on with freelancers, are clearly projects.

By setting clear timescales and objectives, your freelancers will be working exactly as their contract states.

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Challenge 1The beST FreelancerS are bUSy

SolUTion:

Start the recruitment process well in advance of projects, and offer your chosen freelancers longer term contracts

Strength in depth is important here, like any top sports team, you can’t always have your A Team on the field. If you implement a strategy to build agility into your organisation, that doesn’t stop and start with finding some freelancers. Be strategic, look at the key skills that are required and break them down into subsets so that you resource accordingly and call in your subs when you need them. i.e. a set number of hours over three months, to secure their availability and you get the flexibility of using the hours.

Project based agreements are beneficial for both parties, it provides ease of budgeting for your business and predictability for the freelancer. It’s also more likely that you won’t be panicking at the last minute because expectations have been outlined and diaries coordinated.

Challenge 2remoTe vS workinG in The oFFice

SolUTion:

Assess the project needs/ client expectation/ timescales/ availability of chosen freelancers/ technology for comms and tracking tools available to make your decision.

Freelancers should expect to be requested to work from the office for collaboration needs from time to time. However, do bear in mind that expenses for travel to meetings will need to be covered.

Collaborative technologies nowadays are extremely effective and can be accessed almost from anywhere at any time. If you want a larger talent pool to choose from and more productivity, consider the frequency of remote vs on-site.

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Challenge 3can FreelancerS be clienT FacinG?

SolUTion:

Yes, absolutely, there are 5 million people in the UK who are in self-employment and many who operate in roles such as sales, marketing and customer service.

Equally, white-labelling (no client or customer contact from the freelancer) can be of benefit to your business, particularly if you fulfil work for other companies on a white-label basis.

Where this can be a problem is through your customers contacting the freelancer out of their contracted hours or taking up time with admin tasks, so ensure it’s clear to both who the point of contact is and when they are available to provide support.

Challenge 5FreelancerS aren’T aS inveSTed in yoUr company

SolUTion:

They naturally won’t be compared to an employee. Help them learn the company values and treat them like an employee in terms of the culture you operating by.

They can become an advocate for your business, recommending you to their network for new business.

Treat them well, pay them on time and keep in contact with regular work.

Long term relationships are key, and times are changing. The employers of the future will view freelancers very differently than they do today – encourage, reward and involve them for helping you to succeed. A few more heads at the Xmas party is not going to break the bank!

Challenge 4eSTimaTinG Time correcTly

SolUTion:

The majority of business owners and freelancers will under-estimate the time needed for projects.

Try to consider time for changes to project work and the tasks given to the freelancer, in advance, to agree a set number of hours to cover these instances.

If you are working on hourly rates with a freelancer, it’s reasonable to ask for ball park figures, but it’s unreasonable to expect 100% accuracy. You need to allow at least a 20% buffer due to unforeseen circumstances (factor this into your budget).

makinG FreelancerS parT

oF yoUr Firm’S SUcceSS

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Once you’ve started working with freelancers, you can develop your own talent pool to call upon when customer demands and resource requires their support.

Use freelancers to cover the same services your employees work on, and have them prepared to take on tasks that are outside the scope of your own team. If an element like this is part of a bigger project, you won’t have to turn down work due to lack of in-house resource.

One of the most valuable uses for freelancers in businesses, is having them as a fresh pair of eyes on a new challenge or taking a look at a long standing issue that may be causing your team to scratch their heads.

Freelancers won’t be afraid to share their opinions (as they don’t risk upsetting a line manager they see every day, for example) and they bring their experience from outside your business, which will boost the team by getting them thinking about potential pitfalls or new approaches.

Hand picking senior freelance consultants for the sales pitch process can be one of the best ways to scale your business.

The freelancer is introduced to the customer as any other employee, but can be chosen due to specific experience relating to the industry, or even just their presentation skills to support your existing team.

Don’t be afraid to be upfront with your potential customer, as a quick Google and they’ll know they are freelance. The changing workforce culture means this soon will not even be a topic of discussion.

GETTING THE MOST OUT OF yOUR FREELANCER

For a successful relationship between your business and freelancers, it’s vital to set clear objectives before, during and after projects.

Regularly give an evaluation of their work and involve your whole team by asking them how they find working with remote workers. This will help change any existing negativity surrounding remote working if they can see the success they bring.

Show your appreciation to your freelancer by giving them a testimonial they can use for future clients. Be sure to refer work to them from your peers when the opportunity arises.

You should consider block-booking freelancers over a longer period, as this gives them security for their role, and you retain someone who has learnt all about your business and how you prefer to work.

Try to give freelancers as much notice as possible for new projects, as this will help them do the necessary research and ask questions before they begin.

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SoUrceS:

1. A study, conducted by an independent research firm and commissioned in partnership by Upwork and Freelancers Union, surveyed more than 6,000 U.S. workers 2. Professional Contractors Group 2018 report

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[email protected] ● 020 3870 8515

SUmmary

Utilise technology right from the hiring process through to managing freelance workers. It is this that will help you stay in control and make it a seamless shift to using a remote workforce.

Have the right contracts in place and focus on building long term relationships with freelancers to receive the best service in return.

Technology is your friend, use it to your advantage and you will have more time to focus on your people and customers.

Forward plan and have strength in-depth to cover seasonality, illness, staff churn and holidays.

Take your time in the hiring process, set clear goals and expectations for your freelancer and give them regular feedback.

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