Freelancers Versus Employees: What to Expect
On the surface, freelancers don’t look so different from employees: you assign them projects and pay them for their work. But if you consider how freelancers will interact with you, how they complete projects and even how they are paid, freelancers are a lot different than employees. It can require a shift to start working with freelancers, rather than trying to manage them like employees — but if you can build up a strong freelancer-client relationship, you can get much better results than trying to have an employee complete the same project.
Hiring a Freelancer
When you hire an employee, there’s generally a pretty lengthy process required. You may review quite a few resumes, hold interviews, run background checks and take care of other application details — and that’s all before you actually hire someone. Once you’ve made your choice, you’ll have to orient your new employee, take care of HR paperwork, maybe even issue a key or equipment. All of that is days, perhaps weeks, beyond what it takes to hire a freelancer.
It’s entirely possible that you won’t meet a freelancer in person during the hiring process, if ever.
With freelancers, you’ll generally review portfolios and exchange emails or phone calls. It’s entirely possible that you won’t meet a freelancer in person during the hiring process, if ever. It’s rare that you’ll need to go beyond portfolios to make your choice though — because you’ll only be working with a freelancer on a relatively short-term project (rather than hiring her indefinitely), it’s not necessary or practical to go through a lengthy application process. On top of that, most freelancers work exclusively on their own equipment, usually in their own offices. They don’t get benefits or anything like that, either, which means there’s no orientation process. You pick a freelancer and he gets to work immediately.
The Costs of Freelancers
If you haven’t worked with freelancers in the past, their rates may seem a little surprising — especially in comparison to what you write on your employees’ paychecks. But it’s important to remember that employees cost far more than what they actually take home: payroll taxes, health insurance and other benefits, equipment for their use, even the coffee you provide to employees are costs that you won’t have with a freelancer. When you add up all those numbers, you’ll likely find that hiring a freelancer costs less on an hourly basis than an employee with similar skills — and you don’t have to keep a freelancer on when your project is complete.
You’ll likely find that hiring a freelancer costs less on an hourly basis than an employee with similar skills.
When paying a freelancer, you’ll likely come to some agreement regarding whether you pay via check, PayPal or another option. No matter which payment method your freelancer prefers, though, it’s important to keep records. In most countries, the payments you make to a freelancer are considered business expenses and may be deductible on your taxes.
Managing Freelancers
Freelancers operate their own businesses. That means working with a freelancer is more like working with a vendor than an employee. In most cases, you and your freelancer will work together to lay out a schedule, project goals and other details for the work you want the freelancer to complete. However, a freelancer will decide when and where to complete the work in question.
A freelancer will decide when and where to complete the work in question.
Trying to get a freelancer to handle a project within certain hours, say 9 to 5, or at a specific location, such as your office, can actually open you up to some trouble. If you’re based in the U.S, for instance, such requests can lead the IRS to consider the freelancer to be your employee, rather than an independent business. That can make you liable for payroll taxes and other expenses associated with hiring an employee. Luckily, for most projects, there’s no need to have a freelancer work any way other than the way she would typically handle a project.
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Very nice article. It’s definitely something I could see myself sending a potential client if the gasp at my hourly rate.
I do website development (not design) and I plan on sending this to a few of my clients.
Thanks
The one greatest things about freelancers is that they can get to work immediately, as mentioned above. For simple quick projects, you can’t go wrong with a freelancer. However, you should expect to get what you pay for. I know, its cliche. It’s true though. Remember to always check up on references, if they provide any. Best of luck to everyone in using a freelancer!
Setting up project milestones work best with freelancers. Some freelancers have a full time job and work on the side so a 9-5 gig may be out of the question.
This is a great summary of the key differences between freelancers and full time employees.
Thanks for the article. We use freelancers fairly often, and have learned a few things in the process.
One of the things that was most difficult initially was figuring out how best to communicate. We tried weekly calls, email only updates, and project management software, and found that a combination of project management software and phone calls seems to work best for us.
The software helps us keep documents in one place, track the current status of projects, and also keep a record of conversations so they don’t get forgotten or lost in old emails.
The phone calls are important too, because there’s nothing quite like talking in real time to sort out confusion or deal with more sensitive topics (like a problem with the work).
Amazing article. I’m definitely going to keep this as reference!
What a simple and yet amazing way to explain a client why they should go for a freelancer. Thanks for the insight.
Thank you for the clarification about where freelancers work (short answer: wherever they want!). I’ve had so many tussles with clients over this issue.
Very nice article – clients will benefit from this read
Would have loved to see one more section in your article: The Benefits of Hiring a Freelancer. Clients get a talented specialist to work on their project. They can expect top-notch work and first-rate service. They will get the objective perspective of someone not mired in the day-to-day dealings of their company. Freelance professionals deliver true value to their clients, and that’s certainly worth taking into consideration.
In my experience companies interview freelancers, what’s more they even interview employees of the company they want to hire to do something for them.
Not all the time, that’s true, but I have seen it happen quite a lot.
The beauty of working with freelancers, either employers or clients is that you deal only with one person who takes all the responsibility. There are no delays and circles of official hierarchy. But that, if you v got a responsible one
Sadly there are employers who look for employees when they actually need a freelancer with a more defined skill-set. Then of course we have clients looking for freelancers when they really need an employee.
Nice article, even though from the title it seems you are providing the pros and cons or freelance vs employees, It does not give you any opinion why employee is better than a freelancer.
Really good, that article is going to be a reference when I’ll cross someone roads who’s worrying about freelancer or full-time employee…
I think a big problem is that companies usually don’t plan accordingly their projects. Freelancers are not always the best solution for some projects. Then the freelancer is blamed.
For example, if the shoes shop from your neighbourhood wants an ecommerce website, a freelance web developer is the best option (actually the only one). You wouldn’t hire a fulltime web developer in this case.
In the case of a shoes manufacturing company, with suppliers accessing a B2B portal, clients ordering online in the thousands of pairs of shoes, connection of your shopping cart with your ERP system, etc., you will need a full-time developer in-house or a contractor (different from a freelancer) that works fulltime for 3-6 months.
I’ve seen this happening over and over again. Then managers and users blame “freelancing” or “outsourcing” for any problem that they have.
The other side of the coin is that many freelancers promise more than what they can do. In a company that I worked, a freelancer said that he had PHP knowledge. He actually knew how to set up Open Source products and a bit of HTML and CSS, but didn’t have any background on programming. When requirements became more complex, he kept promising that he could do it. The results were horrific.
Very good article, I might forward this to some of my contacts, as it has some relevant information they could do with reading!
Thank you so much! I plan to include this the next time someone asks me about rates.