Running Your Business

Tips for Employing a Freelance Workforce

  • Freelancing is becoming more popular and 55 million Americans are part of the freelance economy
  • Employers can find freelancers throughweb research,local referrals or websites like Upwork
  • Employers do not need to provide benefits or manage tax withholding for freelancers

Posted by May 1, 2018

The American workforce is going through a transformation as people switch to freelancing versus working as full-time employees. According to a 2016 survey from the Freelancers Union, 55 million Americans participate in the freelance economy and this number is growing. This shift is an opportunity for employers interested in employing a freelance workforce.

What Is a Freelance Worker?

A freelancer is self-employed and not committed to full-time work at only one employer. They can work on multiple different jobs and projects at the same time. Freelance workers also have control over when they work and for how long.

For example, a freelancer could be a website designer who builds sites for local businesses. It also applies to contractors in the gig economy doing work for companies like Uber. They are not full-time Uber employees and can choose when and where they want to drive.

Why Is Freelancing Becoming More Popular?

The internet has made it easier for people to find freelancers and for people to market themselves as freelancers. Employers also see freelancers as a way to control costs. When you hire a freelancer, you do not provide benefits and you only pay when work is needed. You aren’t committed to a fixed weekly salary. This keeps costs under control.

At the same time, many people like the flexible lifestyle and opportunities from freelancing. Finally, as the baby boomers start retiring, some are turning to freelancing so they can still do some work without the strain of a full-time job.

How Do You Find Freelancers?

There are several websites dedicated to freelancing like Upwork, and Guru. On these websites, you post your project specifications and freelancers bid for your work.

You can try your own web research to see if you can find the websites of individual freelancers, like Googling “freelance web designers in Georgia.” More experienced freelancers often have their own webpages. If you know any other local business people, you could also ask them for a referral to local freelancers.

How Do You Find Quality Freelancers?

There are plenty of freelancers out there. But that doesn’t mean there are plenty of quality freelancers. You cannot trust just anyone to handle your work and should be careful of extremely low bids on your project.

When you vet freelancers, ask for client references and samples from similar projects. Freelancer websites let other clients leave feedback and reviews so you can see whether a freelancer did a solid job in the past.

As you compare offers, keep in mind that employing a freelance workforce is like everything else: You get what you pay for. If you go for a low bid, chances are you will not get the highest quality of work.

How Do You Hire a Freelancer?

When you find a freelancer who looks like a good fit, the two of you negotiate a price for their services. You should both sign a contract stating how much you will pay, the scope of the work and when the project should be completed.

Hiring a freelancer is easier than hiring an employee. You do not need to enroll them in benefits or set up taxes for their payroll. Instead, you pay the freelancer’s earnings pretax and they manage the tax withholding on their own. You should collect a W-9 with the freelancer’s tax information before starting your project. Come tax season, you report to the IRS how much you paid each freelancer.

The freelance economy has opened new opportunities for workers and business owners. By considering this information, you can tap into the rapidly expanding and increasingly talented freelance market.

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