Ten Tips on Hiring and Working with Freelancers

Your business has been growing and you've now reached the point where you need additional help. But you aren't ready to go through the hassle or expense of hiring full-time employees. One option is to outsource as much work as possible to freelancers.

Following are 10 tips for finding talented freelancers and setting them up as part of your team.

1. Search for talent online. If you're looking to hire freelance help, the Internet is a great place to start. Start with useful sites like Elance and Craigslist, which allow you to post project descriptions in category-specific areas and then receive résumés from a pool of eager professionals.
2. Tap into your network. Another good place to find talented freelancers is through your professional network. A word-of-mouth recommendation is a freelancer's best marketing tool. Ask associates or other business owners for some good recommendations.
3. Clearly define the project's scope and schedule. To avoid any confusion, especially if your freelancer will be working remotely, it's critical to outline the project's scope, provide clear guidelines, and set deadlines for its completion.
4. Negotiate ownership of the work upfront. Draft a legal document stating that all work completed belongs to you, the business owner, and have the freelancer sign it. (Here is a sample freelance Writer Agreement.) A good guideline is to pay no more than 20 to 30 percent of the total project price upfront, with the rest of the payments awarded based on the completion of three or four key project milestones.
5. Critique their work thoroughly and often. Just because your freelancer is a hired gun doesn't mean they'll do a good job. Evaluate freelancers as you would any full-time employee. That means reviewing portfolios and samples thoroughly prior to contracting them, and reviewing their work in stages to avoid being disappointed if they turn in poor work at the project's end.
6. Match your needs to their experience. You want freelancers who have concrete experience that fits your needs. Look for those freelancers who have worked on projects in the past that are similar to what they will be doing for you.
7. Don't make a decision based on price alone. Don't choose a freelancer based solely on price. Sure, you may find a designer willing to build your Web site for half the price of a more experienced person, but odds are the finished project will also be noticeably less professional.
8. Know your tax obligations. If a worker is classified as an independent contractor or freelancer, that person is considered to be in business for himself. You are not responsible for withholding taxes from their wages nor are you responsible for paying certain payroll taxes on their behalf. (However, be extremely careful to follow the law regarding how you treat an independent contractor, as failure to properly classify a contractor can end up costing you money. Read A Test for Determining Contractor Status for more information.)
9. Realize you are not the only client. One of the disadvantages of independent contractors is that they aren't dedicated solely to you and your project. If they have a deadline on another client's project or need to travel for business, they may not be immediately accessible.
10. Protect your assets. Another disadvantage to hiring talented freelancers is the risk of them cutting out the middleman (you) and absconding with your clients. Protect your assets by making all freelancers sign a non-competition agreement that prohibits them from soliciting similar work from the same client for a specific period of time. Read Should I Have My Workers Sign Non-Compete Agreements? for more information.