AGILE GROWTH: EMPLOYEES VS. FREELANCERS

If you want to grow your business, you will undoubtedly face the following dilemma: should I hire someone or use a freelancer? For a start-up with scarce resources making the right choice can be the difference between gaining traction and wasting valuable, and finite, time and money.

The case for using freelancers usually sounds something like this: “Need new talent, but don’t have the resources or desire to take on a full-time employee?” … and that’s a great reason by the way.

Other good reasons for using freelancers include value for money, needing specialist skills and surge capacity for an ad hoc project. Some of the arguments against are quality control and the time it takes to get a freelancer up to speed.

There are some great articles about the main pros and cons of using freelancers. But there is no point telling you what you already know or can easily find out with a quick Google search. Instead, we wanted to share some of the lessons we have learnt through our own experience at vervoe.com, as well as the feedback our clients have shared with us. Employees versus freelancers: Which is best for you?

Here are some of the less obvious, but equally important, considerations when trying to decide between making a permanent hire and engaging a freelancer.

Retained Knowledge

Even if a freelancer does a great job, at the end of the assignment she is gone. She won’t call you next week with another idea or come back to fix something that was overlooked, at least not for free. While you will benefit from the outcome, you are unlikely to be privy to all of her thinking and preparation. So, it’s worth considering whether the task you are outsourcing is isolated or will have an ongoing impact on your business.

For example, it might make sense to outsource the task of sharing content on your preferred social media channels and even creating some of that content. But preparing your content marketing strategy requires buy-in from the founders or management because it involves deep product and market knowledge and a strong understanding of your company’s objectives. It is also a document you will likely want to revise over time so you need to understand it intimately.

Occasionally you may find an absolute gun who will only work freelance and it’s clear that she will provide greater value than an equivalent employee. Don’t dismiss working with her on strategic tasks just because she is a freelancer.

But structure the arrangement with two things in mind. First, be heavily involved in the thinking process rather than just waiting for the outcome and ask for all the draft materials. This may cost more but it will be well worth it. Second, try to retain her services on a long-term basis and treat her like she is part of the team. This will hold you in good stead.

Product Knowledge
The biggest cost associated with using any freelancer is the time it takes her to understand your product and market positioning. Therefore, your return is likely to increase over time and the first engagement is usually the riskiest for your company.

Really good freelancers will do their homework and tell you upfront what they require in order to make the assignment successful. They may ask to interview your customers. They may go through every page of your website. They may look at all your competitors. They will most certainly consult with their network. Good freelancers “get it” quickly because they prepare.

Unfortunately, only a very small minority do this. Most freelancers learn about your product and industry on your time and at your cost. Sometimes that is unavoidable. If you are paying someone under $100 you can’t expect them to dedicate hours to gaining a strategic understanding of your business. It’s simply not worth it.

The arrangement needs to be mutually rewarding. If you need a short video, a few lines of quick copy or an icon or two then a site like Fiverr makes sense. But if you need something impactful and you want a freelancer who will understand your business then prepare to pay more or make a permanent hire.

Motivation
When people do work for your company, how invested do you want them to be? A freelancer, even one with amazing dedication, is committed to a specific task rather than your entire business. She is unlikely to be as incentivized as your staff. Having said that, it’s all a matter of degrees. Your staff will not be as incentivized as people who have equity in your company and certainly not as incentivized as the founders. So is the answer to only hire employees and give them all equity?

That’s certainly one model but it’s not necessarily the right one and it assumes that financial gain is the main source of motivation. Your team members, from the founders to the freelancers, are likely to be motivated by a range of factors, including intellectual stimulation, learning new skills, working with like-minded people, building something exciting, doing a great job and of course having fun. And obviously money.

If your number one criterion is having people who are heavily invested in your business then hire them permanently, give them equity and lock them up. But that comes at a huge cost, especially for early-stage start-ups. And it’s not always necessary to get great results. The right freelancer can add enormous value and there are no guarantees your employees will always deliver.

Access to Elite Skills

One of the biggest advantages of using a freelancer is gaining access to someone you can’t hire. It’s not just the individual. It’s the level of seniority, the experience, the contacts and perhaps even the location. It might be the money or maybe your company hasn’t yet got enough runs on the board to attract elite talent. For whatever reason, you are not in a position to hire someone at that level.

But by using a freelancer you can get access to super talent and immediately inject value into your business. There are some amazing operatives in the market and under the right circumstances they can help you grow your business. When you find them don’t let go, freelancer or not.

First, think about the skills your founding team already has. Then figure out what you are missing. Keep in mind that “missing” in this context doesn’t mean the things you prefer not to do. It needs to be something that is genuinely critical to your success and you can’t do yourself. Something that you wish one of the founders could do. When this happens, you are in need of an expert.

Finding the right one isn’t easy and trawling through the freelancer sites is not likely to yield results. There are two good ways to find a true expert you can rely on. The first, and most likely safest way, is a referral. Contact a friend or someone from your network who has been in a similar situation and ask for a reference. Reach out to people in your network with the expertise you need and ask them for advice.

This article is by Omer Molad, co-founder and CEO of Vervoe.