4 Things You Must Have When Hiring Freelancers
Freelancers can be very useful for handling jobs you don't have the right people on staff for. Before you go hiring, there are a few things you should know.
What You Need to Know About Hiring Freelancers
Every business needs employees. It’s good to have some workers who are permanently on staff so you have some consistency in your workforce. It makes sure everybody knows the day to day expectations of the workplace and you don’t struggle to find workers from one day to the next. Sometimes, however, there are jobs that need doing which aren’t part of the everyday routine. They’ll require a set of skills that your regular employees don’t have, but are so specific that you may only need the job done once. For that, it’s a good idea to hire freelancers.
What Are Freelancers?
Freelancers are workers who don’t work for a specific company, but provide their services to anyone who pays them. They’re sort of the mercenaries of the business world. Often, freelancers have specific skills that you don’t need very often, but are more technical or unique than you can reasonably expect an employee to have. In these cases, it tends to be more effective to hire a freelancer, because trying to train a regular employee to do these jobs costs time and money, you may not have the skills needed to teach this kind of work, and the work would take away from what your employee needs to do in their regular job.
For example, freelance blog writers are common. There are many benefits to running a company blog, but generally, you only write one to two blogs a month and that’s not enough work for an employee to live on. At the same time, good writing requires a lot of training and experience that isn’t commonly taught. Sure, just about anyone can type words on a page, but to make those engaging and easy to read is a much more technical skill. Blog writers can usually make more money freelancing because it gives them more opportunities for work than if they stuck with one company.
There are other reasons you might hire a freelancer as well, but if you’re going to hire a freelancer for any reason, there are some things you should prepare for according to Stapley Accounting.
1. The Paperwork
Everybody’s gotta pay taxes, there’s just no getting away from that. When hiring freelancers, they need two forms: the 1099-MISC and the W-9.
The W-9 is the form that allows a business to hire a freelancer or other independent contractor. You must provide this form to any freelancer you hire at the start of their time working for you. It releases you from the obligation to pay FICA and income taxes for them, leaving them responsible for their own taxes, which saves you time and money on what is usually a one time, or occasional gig. You will need this form if you ever pay a freelancer more than $600 in a year.
The 1099-MISC is the freelancer equivalent of the W-2 form. Using the information provided to you on the W-9 form, you complete this form to turn in with the rest of your tax paperwork. It’s important to keep a careful record of all payments made to the freelancer within any given tax year. You will also need to provide a copy of this form to the freelancer you hire no later than January 31 of the following year so they have it for their own records.
2. Billable Invoices
Freelancers will have different ways of billing you for the work they do. Some will bill you after the work is finished, giving you a certain number of days to pay. Others will bill you up front based on estimated hours, or by the job they do. Some will take half-pay up front, and half after the job is completed (this is sometimes called the net pay option: net 15 gives you 15 days to pay). You should be ready to handle this. Find out how the freelancer will be charging for their services and prep this with your bookkeeper or payroll manager (depending on how your company operates). This will help avoid inconvenient surprises later.
3. Training Plan
While a freelancer is usually hired to save money on training, it’s a good idea to have a plan ready for getting the freelancer up to speed on how your company operates. You should have certain expectations for the sort of work that gets done and how it gets done. These might include safety procedures, company policies, or other standards and expectations of the quality of work. While you don’t get to tell freelancers how and when to work, it isn’t unreasonable to expect them to be able to get the work done in a reasonable time frame and for it to be done to a certain standard of quality. You should have a plan in place for making a freelancer aware of those expectations early on so you can convey it to them before they’re hired. This will avoid any complications later, such as finding out that the way the freelancer works does not fit with your company protocols. This is an ideal strategy for hiring from temp agencies or professional employment agencies.
4. Transition Strategies
While you’re usually hiring freelancers for one-time gigs, sometimes the situation changes. For example, as a marketing company, we offered blog-writing services to clients who wished to pay for them. Initially, when we had few clients, it was easier to hire freelance writers because not every client wanted the service and there wasn’t a lot of work that needed doing. As the business model changed, we moved blog writing to a regular service, so all of our clients got this service as part of the base package. With more writing being done for us specifically, it became easier for us and more profitable for our best freelancers to be hired on as full employees.
If you work with a certain freelancer regularly because you find the quality of their work stands out and helps your company more than others, you may find yourself wanting to bring them on as regular employees. You will gain access to their services on the regular and not have to worry about if they have time to fit you in their schedule. You should have a plan for this, so that if your situation changes to one where this is profitable for your business, you are ready to bring them on full-time.
Alternatively, if you are taking on a freelancer for a series of jobs over an extended period, you’ll want to have in place a protocol for bringing them on board and then terminating the business relationship after the agreed period of service ends. The freelancer should be aware of these up front so they can be ready to make decisions on how to handle when these changes come up. These transition strategies help smooth the periods where you bring on or cancel services with new freelancers.
Photo by Andrea Piacquadio
When you first hire freelancers for work, there’s a lot of things that take getting used to. Over time, you’ll figure it out on your own and develop a good system for it, but why leave yourself to be caught by surprise? Knowing ahead of time some of the basic elements of hiring freelancers can help you make a plan that will avoid unexpected complications.
These four things are the basics that every business should consider. They aren’t everything, however; each type of business may have specific things to consider. While these tips will get you started, you should also consider the specific needs of your business and work these elements into your plan as well. You’ll still need to smooth the plan out over time as you find out what works best for your company, but having a plan ahead of time saves you a lot of hassle.
Cover photo by Edmond Dantes