Hiring a freelance team can be a very effective way of growing your business, but it also brings huge challenges for entrepreneurs.
Recent research from Gallup has found that remote freelance workers are substantially more engaged in their jobs than traditional counterparts who are stuck behind desks all day, and that they are markedly more productive.
In fact, research predicts half of the U.S. workforce will be at least partly freelance by 2022, meaning today’s business leaders need to learn how to better manage off site employees in order to stay profitable.
Alongside these huge opportunities, moving to this model requires that entrepreneurs think carefully about how they will manage a freelance (and often remote) team.
The tools you need to meet these challenges can be broadly broken into two types.
The first and most obvious are the extra technical tools required to manage a freelance team. These will include online hiring platforms, time-tracking software, project management systems, and dedicated communication channels.
The second set of tools you will need is managerial. You’ll need to teach yourself to rethink the way that you oversee your employees.
Unlike traditional staff, freelancers thrive when they are hired for very specific, tightly defined tasks, like making a marketing strategy or building an ecommerce community. Asking a freelancer to do general admin is less effective, because neither you nor your freelancer will have a clear idea of what you are expecting them to do on a daily basis.
Making the best of freelancers also means jettisoning the instinct to micro-manage staff, because freelance teams work best when you embrace the flexibility that this business model provides.
In this article, we’ll take a look at requirements, both technical and managerial, for hiring and working with a great freelance team. This will include:
- Managing freelance teams
- Budgeting for freelancers
- Project management for freelance teams
- Tracking and monitoring your freelance team
Along the way, we’ll give you quick breakdowns of the tools you can use to effectively manage freelancers, and also dispel some common misconceptions about freelance teams.
How to Manage Freelance Teams
The Freelance Mindset
First, let’s tackle the biggest challenge entrepreneurs face when hiring and managing freelancers—understanding what makes them tick.
In traditional management roles, where your employees have desks next to yours, delegating tasks to them is as easy as leaning over and speaking to them. Projects can be broken down into small tasks, and the typical employee will have a to-do list of maybe a dozen items a day.
That approach doesn’t work with freelancers. They chose this form of work because it affords them a high degree of flexibility, and you need to recognize this to make the most of them. Instead of asking them to write an email, give them control of your email outreach system. Instead of asking them to generate ideas for content, ask them to write a series of articles. The key here is to break your projects into larger chunks than you would in a traditional management environment, and give your freelancers the freedom to execute them well.
For many entrepreneurs, this can be difficult. If you have been in sole control of your company for a few years, ceding control over important business functions to an employee can be uncomfortable. But what you need to understand is that freelancers are best understood as “co-entrepreneurs” rather than as underlings, business partners rather than normal employees.
Thinking in this way automatically highlights several important practical principles of working with freelancers. Here they are:
Isolation and Communication
The freedom that comes with working with freelancers is a double-edged sword. Freelancers thrive when they are given responsibility for particular projects, and when they are not micromanaged. However, this lack of everyday oversight can lead to team members becoming isolated from each other, and from the strategic goals of your business.
Not only can this isolation make freelancers less productive, it also makes them less healthy. Research has shown that continuous isolation can lead to mental health issues and even increased mortality, and avoiding it is therefore key for those managing freelance teams. The key to doing that is to ensure that you have the tools necessary to enable continuous communication with (and between) your freelancers, while avoiding the temptation to use them to pile on tiny tasks.
The importance of good communication doesn’t just apply to everyday interactions, however. Working with freelancers also requires you to be clear about your business goals, and empower them to use their intuition to work towards them. Giving freelancers a good understanding of your strategic plans is one of the core techniques involved in growth hacking your startup, and is far more important for freelancers than for traditional employees.
Setting clear goals for your freelancers has advantages throughout the business cycle. A clear understanding of what you want your freelancers to do will help you to find the right hires. It will then allow you to communicate to your new team exactly what is expected of them. It will then form a clear framework for assessing their work, and their progress in terms of your strategic goals.
Setting goals is the area where entrepreneurs make the most mistakes with freelancers. As a business grows beyond the capabilities of a single individual, many small business owners will naturally gravitate toward the idea of hiring a freelancer, but without a clear idea of what this new employee will do everyday, and precisely what they will be responsible for.
In short, if you can’t write a list of the tasks you will delegate to each of your freelancers, don’t hire any just yet. Take the time to plan what needs to be done, and who can do it best, and then look for freelancers who fit that profile. You are hiring freelancers to do specific jobs, not looking for “someone” to “reduce your workload.”
Being honest with your employees about how they fit into your organization is important in traditional environments, of course, but exponentially more so when it comes to managing freelancers.
Beyond being honest when it comes to the expectations you have of your new employees, you should also be up front about how you are monitoring their work. Most freelancers will be happy to use timesheets and time tracking software, but will resist having you continuously monitoring their email inbox. Monitoring freelancers should be done against high-level business goals, and not everyday activities.
Rather than telling your outreach freelancers that they need to send three tweets a day, for instance, measure how many followers they attract per month. And, most importantly, tell them how you are going to measure their productivity. Dropping new KPIs on freelancers with short notice is a great way to get them to quit, and to undermine your reputation as an employer.
The Same But Different
If you’ve worked in traditional management roles before, the three principles above will not come as a surprise. In fact, you might be wondering why you need to be reminded of them at all. Aren’t communication, clear goal setting, and honesty just the marks of any good manager?
Well, yes and no.
In truth, managing freelancers requires many of the same skills that managing “traditional” employees does. The difference is one of severity. Fail to apply these principles in a traditional environment, and your employees will tell you off in your weekly meetings. Fail to apply them with freelancers, and they will bail, taking your investment in training with them and potentially outing you as a bad employer.
In short, managing a freelance team means you have to be a better manager than the vast majority of your peers. If you’re up for that challenge, here’s more information on how to rise to it, broken into three core elements.
Budgeting For Freelancers
At this point, let’s bust a widespread myth about freelancers. They are not a cheap alternative to traditional employees.
Or not necessarily, anyway.
There are, of course, some cost savings that can be achieved by moving to a freelance team, or by starting out with freelance employees. For some tasks, it is possible to hire workers from countries that have a dramatically lower costs of living than where you are based, and the pay rates they expect will reflect this.
It also costs between $10,000 and $20,000 per year to house an employee in an office in a major metropolitan area, and between $6,000 and $10,000 to do so in a smaller city. Moving employees out of your headquarters and into remote or home offices can therefore save you millions of dollars a year, depending on the size of your team.
But, unfortunately, these savings are not the whole story.
The Actual Cost of Freelancers
When it comes to budgeting for a freelance team, you need to take into account far more than just the hourly rate you are going to pay them. In reality, managing a freelance team comes with recurring costs that many entrepreneurs do not consider when they decide to go down this route. Here are the most common:
- Freelance marketplaces. Most will charge you a subscription fee, and most businesses will need to take out a long-term subscription to ensure ongoing capacity. Some of these marketplaces, notably UpWork, will also take a percentage of the money that you pay to your freelancers.
- Freelance Management software. This is a necessary part of managing freelancers effectively, and should be seen as the business cost associated with doing so.
- Training. If you plan to hire freelancers for short periods, and to complete particular tasks, you should recognize that every new employee will require on-boarding and training to get up to speed. That will take up your time, and we all know that time is money.
You Get What You Pay For
That might sound obvious, but it’s a piece of advice that many entrepreneurs forget when they look to hire freelancers. Hiring workers from countries with lower costs of living can be a good way to cut costs, but only for certain tasks.
The most important factor to bear in mind when outsourcing to other countries is communication. If there are language barriers, effective online communication can be very difficult to achieve. This is obviously important when hiring copywriters and content managers, but it also applies to a number of tasks that don’t appear to involve language at all.
It might seem, for instance, that the task of producing web analytics reports could be given to a freelance employee whose English is not great. You may realize that’s not the case when you need to ask your new employee to tweak the report.
The truth is that the best freelancers know how much their work is worth to you, and will charge you for it. In fact, a freelancer quoting an extremely low rate for a complex task should be a huge red flag. Either they don’t have enough experience to know what their skills are worth, or more likely, they lack a level of financial literacy that could ultimately harm your business.
Defining a Clear Budget for Freelance Teams
This means that developing a budget for freelance teams is a little more complex than hiring someone to do a boring task “more cheaply.” Instead, you should take a more holistic approach.
Budgets for freelance teams should always start from the bottom line: the ROI you will achieve by hiring a new staff member. Calculating the ROI for online businesses can be tricky, but should inform every business decision you make.
When it comes to hiring freelancers, this approach means that you need to calculate the actual (monetary) benefit of each set of tasks you are planning to delegate to your new employees. If it turns out that some of the processes you are currently doing yourself aren’t worth the time you are putting into them, all the better—either stop doing them, or delegate them to someone for less than the cost of your time.
From this starting point, you should then subtract the true cost of hiring freelancers. As above, this should include not only how much you will pay them, but also the cost of any extra software you will need to manage them, and the cost of the time it will take to train them.
These calculations will give you a clear idea of how much (or how little) you can spend on a freelance team, in other words, the maximum amount you can pay them and still achieve an ROI. In some cases, this number will be so low that you won’t be able to hire a freelancer, so unfortunately you’ll have to keep doing that task yourself. In other cases, you will find that your budget allows you to hire the most experienced, most professional freelancers out there, and still see a return on the money and time you invest.
Project Management for Freelance Teams
There is a fundamental difficulty when it comes to project management in freelance teams, and it stems directly from the considerations we’ve outlined above. You’ve got to strike the right balance between maintaining open communication and allowing independence.
These competing priorities can lead to a nightmare composed of endless GANTT charts, KPIs, and strategic briefings. Instead of your team members working independently toward a shared goal, they can end up spending the majority of their time working as project managers.
This outcome can be avoided by carefully planning project goals, by making use of software tools, and by recognizing the importance of independence for most freelancers.
Setting Goals and Timelines
In traditional office environments, checking in on progress tends to happen naturally. Because of the close physical proximity of team members to each other, timelines for the delivery of key tasks tend to be short term and focused on small tasks.
When moving into a freelance environment, managers need to take the time to set definite, achievable goals for each team member, and link these explicitly to a timeline for completion. Doing so will not only make managing your team more efficient, but will also streamline your business development plan. It also has benefits when it comes to assessing the work of team members or teams, which we will get to in the next section.
Setting clear goals and linking them explicitly to timelines is also an important part of another principle we mentioned above: honesty.
Ideally, a manager should schedule a meeting at the beginning of each project plan and ask freelancers to give their honest assessments of how achievable the outlined goals are. Keeping everyone on the same page is the most effective way of heading off potential problems with missed work deadlines and poor productivity.
Project management software is a critical investment when it comes to managing freelancers. Software solutions that are specifically designed for remote work can be broadly broken into two types: those that facilitate communication, and those that aim to also organize tasks and projects.
The first category includes communication platforms like Slack, which has quickly become the go-to platform for freelance teams. The advantage of Slack over email or messaging is that it allows you to quickly and easily set up groups and channels to work on particular projects. Given the low cost, and how much easier they make freelancer communication, apps like Slack have become a necessity for managing freelance teams.
This list has been organized by the level of complexity and how many features it offers. Trello, at the top of the list, operates on a “card” system, and is a simple and effective way of managing simple “production lines” like those that are used in designing, producing, and reviewing marketing content. OpenProject, at the other end of the spectrum, aims to provide an all-in-one tool for managing the most complex projects, and is therefore the most complex to learn how to use effectively.
Which of these platforms you choose will depend on a number of factors. The primary ones are how many freelancers you plan to hire, and the complexity of what they will be doing. If you are hiring a couple of freelance writers to churn out blog posts, Trello will be fine.
If you are developing an app with freelance software developers, you’ll want a more fully featured program. Just be aware that the more complex programs will require a faster than average internet connection, extra time spent training your staff, and a higher up-front cost.
Work Not Talk
Most of the pieces of software we’ve mentioned are designed to facilitate easier communication. But that doesn’t mean that you should be scheduling online meetings every week.
That might sound counterintuitive, given all we’ve said about the importance of communication. But here’s the thing: one of the huge advantages of hiring freelancers is that they are not distracted by an office environment. And keeping it that way involves scheduling as few meetings as possible.
Managers moving from traditional environments into one made up of freelancers are often frustrated with the limitations to setting up meetings with their new freelance staff—differences in time zones, language barriers, and simply finding a time when everyone is free. This frustration gradually gives way, however, to a powerful realization that you don’t need as many meetings as you think you do.
Working with freelance employees forces you to consider whether a meeting is really, truly the best way to get something done. Especially when you are starting an online business, meetings can take valuable time away from getting tasks done: instead of convening a strategy meeting to consider the pros and cons of various approaches, you can spend the same time actually trying them.
In short, managing a freelance team is about giving your employees the capability of easy communication, and encouraging them to talk to each other, without burdening them with endless, unnecessary meetings.
Tracking, Monitoring, and Payment
No matter how motivated your freelance team members are, and no matter how invested in your business they appear to be, you will need to monitor how, and how much, they are working.
For managers new to freelancers, this can feel a little intrusive. However, it is a necessary part of managing a freelance team, not only because it ensures that you are getting your money’s worth, it can also help you spot potential problems at an early stage.
In reality, freelancers who work too much are just as big a cause for concern as those who work too little. With no time off, workers who are pouring every waking hour into your business risk burning out, which is bad both for them and you.
When to Monitor Employees
The common move here is to set up time-tracking software, and we will explore options in the next section. Before we do that, though, it’s worth taking a moment to point out that tracking time is not the only, and sometimes not the best, way to pay your freelance employees.
Freelance writing is an obvious example of this. Instead of paying by the number of hours a freelancer spends writing an article, which can be seen as an invitation to conduct endless “research,” you can pay writers by the word. This encourages them to turn articles around quickly, rather than getting distracted coming up with the perfect structure for their content. Just make sure you monitor the quality of their work, as well, to avoid them getting sloppy.
Other types of freelance roles, and especially those that include ongoing engagement with customers and receiving payments, are better paid by the hour. In order to monitor employees in this way, the best solution is to make use of free software that integrates with most merchant services, so you can track payments received and time logged concurrently.
Popular Software for Freelance Monitoring
As freelancing has risen in popularity, the marketplace for employee monitoring software has become more crowded. Just as with the employee communication software, there is a tradeoff to be made here between complexity and features. However, this decision is arguably more important than your communication platform, because it is linked directly to the amount you will pay your freelancers.
One of the most popular options is Time Doctor. An early example of this kind of software, Time Doctor still provides all of the basic features you will need: integration with project management services, and the ability to create invoices straight from the application. On the other hand, Time Doctor is starting to show its age a little, and the user interface, in particular, looks a little dated.
Another relatively simple solution, albeit a much newer one, is Hubstaff. Hubstaff offers screenshot and keystroke monitoring, as well as scheduling features that can help both you and your employees to plan workloads. What Hubstaff does, it does well. However, it does not come with the project management features of some more advanced monitoring apps.
One of the more complex systems is StaffCop. This is a great solution for large teams, offering features that few other systems can rival. These include full audio and video monitoring, automated policies and triggers, as well as full text recognition capability on documents and screenshots. If you’re managing a huge enterprise team remotely, StaffCop is for you. On the other hand, the system needs an on-premises server in order to function, and has no cloud-based admin interface. This makes it less than ideal for managing small, agile teams.
A good compromise between these solutions is Teramind. This is a relatively new piece of software, so it’s designed with the needs of contemporary freelancers in mind. Teramind offers the same intuitive user interface as Time Doctor and Hubstaff, but also includes a full automation layer that makes repetitive tasks much quicker.
When choosing employee monitoring software, it’s worth scheduling in a trial period. Most of these systems require a significant amount of time to set up, and migrating from one to another can be costly.
You should also be as clear as possible with your freelance employees about exactly what you are monitoring, and what you will do with this information. Some freelancers, and especially those who are highly paid, can take offense if you propose to check their every move, so make sure that you agree with them on what’s fair.
Paying Your Freelance Staff
Last, but definitely not least, is the process of actually paying your staff. This might sound like an easy part of the process of managing freelance teams, but there are a few issues that can arise.
The first thing to say in this regard is that many employee monitoring tools automatically generate invoices, and some of the better ones include integrations with payment systems like PayPal, or popular alternatives like Payoneer and TransferWise. This can make the process of paying your staff a lot easier, and a lot more transparent, as long as your time-tracking software is configured correctly.
It goes without saying that, when it comes to payment, you should be as prompt as you expect your staff to be. Quibbling over small sections of an invoice can quickly lead to a break down in your relationship with your staff members, because they can feel that you do not trust them.
Finally, you should remember that your staff are likely to be less invested in your business than you are. No matter how motivated they are, you must recognize that for them, working for you is just a job. As a business owner, you might be willing to put in dozens of extra hours in order to set your business up for the next five years, but your freelancers are likely working on timeframes that are much more limited. For this reason, you should never expect them to work for free.
All of these processes are important aspects of managing a freelance team. They are important, in fact, in managing any kind of team, but for entrepreneurs seeking to grow their businesses, hiring your first freelancers brings both opportunity and risk. Getting it right the first time is critical, and with the tips above you should be able to do that.
In addition, you should think of the process of hiring your first freelancers as a learning opportunity. If you’ve never managed staff before, this is a great way to gain that experience. And if you have managed teams, but not remote workers, then you have equally as much to learn. These skills are hard to come by, and are in high demand.
For that reason, hiring freelancers is not only a good way of building up your business, it’s also a great way to raise your profile. Though AI might undermine the importance of some freelancers in the next decade, for many tasks, businesses will be relying on human freelancers for many years to come. And if you play your cards right, you will not only get great employees, but you will also make contacts with the best in the business. These connections might pay off during the next phase of business expansion.