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.
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.