As every bit of “founder’s wisdom” says: people are the critical element of your startup. Sure, having a world-changing idea is important. But you also need minds and hands to help it materialize.
Soundly, in today’s hyperconnected world, you have no shortage of hiring options. You can easily run hybrid teams, made of in-house, remote, and freelance teammates, operating from any location on the planet.
In this post, we break down the main reasons why startups choose to hire freelancers and how to do so effectively (with tips from other founders!).
As the “Lean Startup” principles go, you need four types of people to hatch a new startup:
The above dream team can be any combination of two to four founding team members. They’ll be the core of your venture.
But if you want to scale your startup from “an after-work moonlight thing” to an “investment-worthy company”, your core team needs extra hands to make work happen. That’s when hiring freelancers makes sense.
Why hire freelancers over full-timers? Because it’s a lean way to obtain the missing skillsets and get some of the pressing jobs done. Hiring full-time employees takes more time (and money), especially if you are competing for people with in-demand tech skills.
“Our order volumes are not constant, they are changing up and down. Therefore, having more contractors on high volume days is necessary, and vice versa.”
By relying on freelancers, UpSteam can effectively meet fluctuations in customers’ needs without stretching their operating budgets too thin.
Natural hustlers. Just like many founders, freelancers love to hustle. They have a hands-on, no-nonsense approach to getting things done and can quickly jump on burning tasks when needed. With the right motivation (and good compensation), many freelancers will go the extra mile for you.
Hiring freelancers is a bit more complex than posting an online ad and calling it a day.
First of all, you’d want to get the best-fits for the open roles. For that, you need to have a good idea of whom you are hiring and communicate that both in your recruiting post and during interviews.
Secondly, the talent shortages are real. Every organization out there is looking for people with strong digital skills — and they are in short supply. Experienced freelancers usually have a tight schedule of lined-up projects. So many may not be looking for a job directly.
Given the above, you should put the strategy behind your hiring.
In this section, we explain how to plan your recruiting activities and how to work with freelancers for the best results.
Startups aren’t the only ones looking to hire freelancers: 72% of enterprises say they are now using contractors in bigger capacities to augment the in-house workforce.
That being said: the freelance workforce is growing too. Over 13 million digital freelancers live and work in the EU – and many more talented people operate from other parts of the world.
The above means two things for you:
In other words: you need to create a well-structured hiring process for freelancers. Without one, you’ll fail to hire and retain the right people.
Matt Dowling, the founder of Freelancer Club, explained that lack of process was one of the mistakes he made early in his startup journey. As Dowling shared in this post:
“Our original thinking [...] was to source the best possible freelancer for the lowest possible price. We soon learned that this approach came at a cost to both the freelancer and to us. We found ourselves spending more time re-hiring, re-training, and re-doing projects than the core work we set out to do.”
When your focus is tilted towards hiring anyone fast and cheap, rather than getting the best person for the role, you end up with mediocre results.
Dowling later spoke to freelancers and other founders to understand how the hiring could be made better for both sides. He found that many startups lacked formal internal hiring processes, struggled with onboarding, and then struggled to keep freelancers engaged.
Freelancers, in turn, admitted they often felt like outsiders, lacked support from clients, and didn’t feel comfortable talking about important issues such as knowledge sharing or fairer compensation. Because of such issues, many eventually grew disengaged and switched to other gigs.
Remember, freelancing is a business partnership. Your approach to talent sourcing and retention should be based on the premises of mutual respect and transparency. Set clear expectations around the role and compensation. Be proactive in communication. Give your freelancers the room to ask questions and exchange ideas with you.
Ask yourself the following questions before posting a new freelance job:
On the surface, you have plenty of avenues to hire freelancers for your startup:
But too much choice can create confusion: Where do you even begin looking?
If you don’t have an internal recruiting team to sort through all applications, the best approach to finding freelancers is going bottom-up — from personalized outreach to freelance marketplaces.
OK, but why should I be cold-calling freelancers instead of vetting self-applicants?
Because experienced freelancers are part of 1-2 platforms at most and don’t actively job hunt (most of the days). As I wrote before, a good chunk of freelancers gets their business by referrals and from recurring clients. Valjo also noted that “social media and word of mouth are their best sources for finding freelancers”.
So when you post a job ad online, it may not get the traction you’d want to. So try some alternatives!
Publish a job on a freelance marketplace. If neither of the above worked, head to a freelance talent marketplace. You’ll have to pay a cut for their services and still do some serious candidate research, but you’d likely get a good selection of applicants. The other downside, apart from fees, is that engaging people on marketplaces is harder because many prompt freelancers to keep applying for jobs to maintain good status with them.
Once you have your lineup of candidates, schedule a series of discovery calls – that’s the freelancer lingo for job interviews.
The difference between a client discovery call and a standard job interview is that this has a softer “let’s get to know each other” type of vibe. During such a call, you can assess the freelancer’s core strengths and main areas of experience, plus pitch your project. The freelancer, in turn, can determine if you are a good fit for them.
Remember: 73% of freelancers decide whether or not to accept a project based on the required skills. So their goal is to learn about the planned scope of work and then decide if they are competent and interested in taking this work.
To keep the discussions productive, here are the best questions to ask when hiring freelancers:
At the same time, be prepared to answer the following questions a freelance may have:
Asking freelancers to complete a “test assignment” is a highly-debated topic. As a client, you want to make sure that the person you hire is proficient.
At the same time, too many freelancers got burned by “work for exposure” or “unpaid sample” requests that led nowhere. Almost one-third of freelancers have, at some point, not received payment for the work they've done for clients.
The rampant rates of non-payments among clients resulted in the “Freelance Isn't Free Act” in NY, USA, and a series of similar global laws, aimed at protecting self-employed people.
Because of some past “baggage”, your request to do an unpaid test task might be met with suspicion or downright refusal by many freelancers.
Still, you have other options to vet your freelance hires:
Both options are perfectly acceptable.
Once you have your match(es), you need to make your relationship “official”.
Make a freelancer an offer to work on your project and summarized the earlier discussed things like:
All of the above should be packed into a freelance contract along with any other special agreements you’ve made such as:
Next, plan how you’ll onboard a new freelance. To make things easier, break down your freelance onboarding process into two parts — administrative and operational.
When it comes to the administrative side of things you need to:
Xolo Teams can help you a lot here. Our platform is purpose-built for founders who want to run an agile freelance team without worrying about admin overheads. Invoice generation, cross-border payments, ongoing compliance — we handle that all for a flat 5% per person fee.
As Valjo of UpSteam noted the admin upkeep of managing contingent workforce can be tolling for startups. “The management team has to focus on growth, not admin operations. Having contractors on our payroll meant that our company employee count kept going up and does not actually reflect the real employee count.” This made accounting and growth projections hard.
So they turned to Xolo Teams, which only charges you for actual freelancer payouts, rather than virtual team headcount. “Also, Xolo system works in several countries, so expanding teams in the future is a lot easier”, Valjo noted.
Another massive aspect of working with freelancers is knowledge transfer. You don’t need to make a freelancer privy to all internal company discussions. But your new hire needs to know:
The latter includes access to project documents, tools, brand guidelines, briefs, etc., — every bit of information that helps your freelancers do their best work!
You have your bench of solo performance — now you want to make them a fine-sounding orchestra! Mesh your freelancers with in-house people and other remote hires to make them feel part of a bigger community.
Freelancing can be lonely. We sometimes feel like a grumpy neighbor, sitting next door to a big fun party (the client’s team) where we are never invited for some reason. So ask us to join the fun too!
As a freelancer, it’s hard to feel connected to projects where we are never given any credit or allowed to see the impact we’ve made. This eventually grows into disengagement and prompts us to jump ships and get a new gig.
Over the years, some of the nice gestures my clients did for me were lunch treats (and vice versa!), corporate merch gifts, public appraisal of my work, solid testimonials, and stellar referrals. All of the above makes one very happy and a very loyal freelancer! :)
Valjo also agrees that proactive contractor retention and engagement are very important.
“We have learned that contractor retention/engagement is getting better if we focus on two things:
If you too want to run happy and productive freelance teams, here are several more simple, yet impactful management tips.
Check even more tips and tools for managing remote teams we shared earlier!
Startups have many good reasons to hire freelancers.
But going forward with the hiring process can feel overwhelming. So give it some good structure! Map the main roles and skill sets you need. Then “go into the field” and get the news out about your professional network and freelance communities. Hop onto several discovery calls and then put down plans for onboarding your new top hires!
And if you need help with the admin side of things, Xolo Teams is there to lead you through this less exciting part of your startup journey.
Elena Prokopets writes content for tech-led companies & software development businesses, marketing to them. Her empathy for the customer, expertise in SEO, and knack for storytelling help create content that ranks well and drives industry conversations.
Elena uses Xolo Leap so she can focus on her solo B2B content writing business without stressing over the compliance and admin overhead.
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