The do’s and don’ts for hiring freelancers—including advice on how to choose exactly the right tasks for them to perform to scale your business faster.
As you take on more clients, your employees are responsible for more and more administrative overhead. And that means they have less time to invest in billable tasks. You could hire more project managers to help boost revenue, but that’s another salary to pay without a substantial increase in hours billed.
A lot of agencies look to freelancers to provide cost-effective, quick labor. But if they’re not managed properly, freelancers can cause agencies to hemorrhage money instead of save it. Freelancers cost more time than you realize—there’s the time to find them, to manage them, and to fix their work if something goes wrong. Those hours add up and take away from your margins.
But when you use freelancers correctly, they can be a cost-effective way for your agency to take on more work without hiring new employees.
Here’s our guide that outlines the best ways to use freelancers to help you scale for maximum cash flow.
Decrease Your Employees’ Administrative Work
You’re picking up clients left and right, and it’s exciting that more and more people want your services. But more clients means more client relationship management—and your employees are already drowning in admin work. Between maintaining your database, sending update emails, renewing contracts, and writing proposals, they just can’t bill as many hours as they used to.
Don’t: Outsource all admin work
It’s tempting to outsource all of your agency’s admin work, but that comes at a high cost.
Freelancers may or may not have a long-term commitment to your company, which means it’s harder to tell if they’re invested in maintaining your agency’s brand or standard of service.
Because freelancers aren’t long-term employees, you can’t make them representatives of your agency. Giving them the autonomy to make decisions in client relationship management is risky – their payroll comes from getting the work done, not making sure it’s on-brand.
Do: Only outsource back-end admin work
Paul Higgins, CEO of Think to Act—a company that helps agencies scale through outsourcing—suggests outsourcing only the back end of your administrative tasks.
Outsourcing the hidden stuff gives your full-time employees the hours they need to focus on making clients happy, but also involves the most invested people in client-facing communication.
For example, you could hire a freelance copyeditor for about $30 per hour. As long as all your projects are free from spelling and grammar errors, no one will know that the copyeditor is outsourced—and your employees will have time for more valuable work.
Here are some of the other back-end admin tasks you can outsource:
- Payroll. Using a service or a freelancer to take care of the employee payroll and benefits system is relatively inexpensive and eliminates the need for a full-time employee.
- Expenses. Outsourcing company reimbursements means your employees don’t have to engage in tedious back and forth about receipts and company expenses.
- Client finances. Choosing freelance services for billing tasks means that your employees don’t have to worry about nitty-gritty stuff, like sending payment reminders and drafting invoices.
- Automation. Create a reliable automation system for your agency by hiring a freelance developer who is an expert at identifying functions that can safely be managed with code instead of human input. Using a freelance developer to identify non-billable tasks you can automate not only removes some of these tedious tasks, but can also increase your agency’s revenue by up to 45%!
By outsourcing administrative work, you make sure that your employees have time to do the hard work that makes your agency better instead of getting bogged down with the details that simply keep things running.
Expand Your Service Offerings to Scale Up
You want to expand your reach by increasing the types of services you offer to clients—and take your agency to the next level.
You might want to add content marketing to your SEO efforts or web design to your conversion rate optimization services. But your employees have too much work on their plate to learn a new skill set, and trying out a new market consumes a lot of resources.
Don’t: Outsource your core services
You want your most trusted employees to test out the new territory, so you think it would be a good idea to hire a freelancer to perform some of the standard services your agency offers.
But letting freelancers assist with services you’ve already mastered is much less efficient—and more costly than it appears on their bill.
Most freelancers work at an hourly rate, and it can be very difficult to tell how much they’ll accomplish, how their rates compare to others, and how quickly they’ll understand the project. Plus, your employees spend about 10 hours per week managing the freelancers, and that doesn’t even include the cost to find them, discuss their availability, and draw up a contract.
In addition to those hidden expenses, there’s no guarantee that the project will go well. Even if the freelancer does a good job, if it’s not exactly what your agency needed, your employees might have to do the whole thing over again.
Because of these cost and quality factors, hiring a freelancer is always a risk.
Protect your agency’s high standards by keeping essential projects in-house instead of assigning them to a freelancer.
Do: Outsource new ventures
You’re an expert in your field, but freelancers are also experts in theirs. Because being heavily specialized is part of being a successful freelancer, they can help you dip your toes into new markets without taking on the risk of hiring a new employee or taking away from your senior creatives’ workflows.
For example, if your agency wanted to try out offering graphic design, hiring an expensive freelancer to test it out for a few projects would still be more feasible than hiring a full-time graphic designer—and discovering after 6 months (and $25,000 in salary) that it wasn’t the right fit.
Plus, if you find a freelancer you love and need their services more permanently, you can ask them to stay on instead of taking a risk hiring someone you might not actually need.
Bring All Hands On Deck to “Wow” Big Clients
You want your agency to do its absolute best work to impress a new client. When you totally “wow” them, they’ll come back for more—and you’ll be rolling in the big bucks.
Don’t: Bring in a show pony
It’s tempting to bring in a successful freelancer for that extra “oomph” to amaze new clients. Many bigger agencies will bring in top-dog specialists as a one-off expense to impress (and subsequently retain) their new clients. These freelancers are called “show ponies” because they come in and court clients—costing about $2,500 per day.
Show ponies are notorious for being expensive, sticking around for a few weeks, and rarely seeing projects through to the end. Their $37,000 price tag (estimated for three weeks of work) doesn’t even cover the total cost your agency spends on that project.
Even if you’re not shelling out $37,000, you might be considering bringing in a higher-end freelancer to impress a new client. But that means you won’t be building your relationship with the client. The process and product will look different when it comes from you than when it comes from the freelancer, leading to mismanaged expectations from the get-go.
If you’re taking on a new client, you have to be the one to build a relationship with them. There’s always a learning curve for new clients, and your agency needs to discover their preferences as quickly as possible.
It’s better if you plan to check in with them frequently as you’re building the relationship and a new project rather than risking their disappointment in a big reveal. It’s important that your team is leading this process and building that knowledge base with new clients, not a freelancer.
Do: Outsource “upgrades”
While your agency might have to be responsible for the work in order to set up a positive working relationship with a client, they don’t have to be responsible for all the work. You can use freelancers (and their expert skills) to package in “upgrades” with your agency’s specialty services, where freelancers do supplementary work, but not the agency’s main service.
For example, if you’re a content marketing agency, you wouldn’t outsource your content, but you could hire a graphic designer to help you produce an infographic for each piece of content as an added bonus. You can charge around $3,000 per infographic, but outsource it for less than $1,000.
This element adds to the value of your work without adding much time to your employees’ days, especially when these high-value supplemental pieces have standard elements that can be personalized for each client.
In Summary: Find the Best Possible Talent—And Use Them Wisely
Freelancers currently make up about 34% of the U.S. workforce, and that number is expected to grow to 50% by 2020. In the UK, the trend is similar: the number of freelancers is growing by tens of thousands of people each quarter. Today, freelancers almost match the number of public sector employees.
No matter where you’re located, this freelancer boom means that there’s top talent at your fingertips. You’ve got your pick of the litter—but it’s up to you to outsource wisely.
Using the strategies for utilizing freelancers outlined in this article can increase your agency’s immediate margins, and ensure that your agency’s value grows over time. Developing an arsenal of trusted freelancers who are well-coached in your company culture—and creating these systems for scaling—can help your agency grow without straining your budget or sacrificing quality.
We’d love to know how (and if) your agency uses freelancers? Give us your tips in the comments section below!