The pandemic rebuilt standard operating structures. Office cubicles turned into digital workplaces. In-person shopping stepped down to e-commerce. And teams became largely distributed (and often more productive too!).
Work from anywhere is the new norm. In fact, 63% of high-growth organizations now operate by the “productivity anywhere” principle: people can check-in to work from any location, at any time of the day, in any capacity.
Other companies are looking into alternative hiring strategies. By the end of 2022, 46% of HR professionals expect to have at least 20% of contractors or temporary workers in their workforce.
What do these numbers (and underlying trends) tell us?
The role of the traditional office keeps diminishing. More businesses choose to have a portmanteau of employees, vendors, independent contractors, and freelancers in their workforce.
So it’s no longer a question of whether you can power your business with the freelance team(s) — but rather how do you do it?
This post explores how to manage freelance teams best and what you need to do to keep your people motivated, productive and highly efficient.
What is a freelance team (and what it’s not)?
A freelance team is a group of independent service providers, collaborating together on a shared objective — be it a one-off project or end-to-end service provisioning for a certain organizational function.
Clearvoice also coined another popular term — “teamlancing.”
Teamlancing is the practice of collaborating with a networked team (or networked teams) of freelancers to achieve a common goal, whether for a client or as a remote extension of a branded entity.
The essence is the same in both cases. Instead of outsourcing a task to an independent contractor, you can build up a freelance team to cover larger amounts of work, akin to an in-house unit. Then manage a team of freelancers directly or by creating a lower-level management structure within the team.
Benefits of hiring a freelance team
- Access to scarce talent. Over 57% of global leaders name constrained access to talent as a hindrance to their growth. Indeed, if you have a weak employer brand, operate in a “boring” industry, or have a limited hiring budget, you’ll struggle to attract top-tier full-time employees (or retain them). This is very true for the tech and digital professions where acute demand outweighs the talent supply. A freelance team can be a good interim or permanent solution to closing gaps in capacities and expertise.
- Higher engagement. Back in 2016, the IBM Smarter Workforce Institute report argued that independent contractors are as engaged as the companies’ high-potential members. They measured engagement across four factors — satisfaction, pride, advocacy, and commitment. Independents had higher pride and satisfaction aspects of engagement compared to in-house employees. While advocacy and commitment are two areas you can improve with better freelancer onboarding and day-to-day management.
- Higher autonomy. Autonomy — control over when, where, and how you work — is a factor in-house employees got to savor during the pandemic. Millennial workers especially enjoy this new “flavor” of work. Freelancers are well-accustomed to remote/hybrid work, have a high degree of personal accountability, and don’t require supervision to perform their best work. When you manage freelancers right, you can get more work done with less direct involvement.
- Faster scaling. You can hire a freelance team to do R&D work or augment the core workforce during busy seasons. This lets you handle more work and innovate without keeping extra staff on payroll. Moreover, hiring freelancers takes less time than hiring full-timers does. So you can get those extra hands faster and prevent delays or operational bottlenecks.
- Economies of scale. You can expand your business into new markets and establish local operations without facing payroll complexities. Instead of opening a branch, you can virtually operate in new markets by hiring a local freelance team. This way, you can grow horizontally and cover more service/product lines or markets without investing in a costly physical footprint.
Do you manage a remote freelance team as regular employees?
The reasons to hire a freelance team are aplenty. But not all employers rush to do so due to lack of managerial experience. If you are in this camp, here’s some reassurance for you.
Given the distributed, digital-led nature of work today, there are few differences in managing freelancers vs full-time employees left. Both often operate remotely, on flexible hours. Communication is asynchronous. Work often happens autonomously. Sure, not all in-house teams work this way — but the most productive ones do.
The above operational setup goes by the name of “digital workplace.”
“[Digital workplace] technologies and tools can help employers gain insights ranging from individual employee performance to team-level productivity to companywide morale, enabling them to identify patterns and make predictions, nudge positive employee behaviors, and fine-tune individual, team, and organizational performance” — as Deloitte puts it.
Digital workplaces are less constrained by co-location. With the right tools and lean processes, it doesn’t really matter where your people sit or when they clock in to work — they can be productive from anywhere at any time.
Freelancers can be an attractive value-add to your digital workplace since they already possess many of the skills and qualities modern companies need to succeed in new markets. These include high digital literacy skills, flexibility, autonomy, and strong remote collaboration skills.
Also, a lot of advice on managing freelancers argues about the differences between freelancers and employers. But those primarily boil down to three factors:
- Compliance and payroll. The tax and legal implications of hiring freelancers vs. employees are different.
- Compensation structure. Employees earn a salary (+ benefits) — freelancers set their own rates.
- Scope of work. Freelancers need better-structured tasks and a clearly-defined scope of work compared to employees.
Arguably the biggest difference between employees and independent contractors lies in the administrative side of things.
Independent contractors are not payrolled, meaning there are no employment taxes due on your end. But there are other complexities such as payments, compliance, and legal contract work. Xolo helps you deal with all of those through one convenient freelance management interface.
On the other hand, aspects like communication, collaboration, and engagement are now very similar between high-performance remote teams and freelance teams.
What freelance teams often lack is alignment and synergy with in-house units. And that’s something you can improve via proactive team management.
How to work with a freelance team: 5 management best practices
The key to managing a freelance workforce is effective communication.
Organizations need to stop latching to proven (but trite) corporate office practices of joint work, often bordering on micromanagement — and instead progressively build out processes, more conducive to hybrid work.
Whether you run an in-house distributed team or a freelance team, you need to cover four pillars:
- Offer fair compensation and adequate hours
- Establish clear reporting and communication practices
- Ensure high engagement and team morale
- Have a feedback loop to identify and resolve issues faster
Below are our best tips to manage freelance teams, based on the above principles:
1. Develop a reference team structure
A good structure underpins every high-performance team. It establishes
- A well-defined span of control for management role(s)
- Clear-cut set of supporting roles (executioners)
- Strong collaboration and decision-making processes
You have plenty of reference organizational structures available for shuffling the above three parameters. For example, you can organize teams by function (e.g. HR), by the project (cross-functional unit, working on a mobile app), by product (chocolate bars division), or using a more elaborate matrix.
In every case, your goal is to arrive at the optimal structure where each person has a clear role, area of responsibility, and enough skills/knowledge to perform the assigned work.
To work out the optimal organizational structure for a freelance team, ask yourself the following questions:
- Does it make more sense to organize the team by function, process, market, or product?
- Which roles do you need on this team to operate effectively?
- Whom different roles should report to? Who will be the main centralized point of decision-making?
- How should collaboration happen between different freelance team members?
To paint a better picture for you, let’s say you operate an ecommerce store. You want to assemble a freelance “creative” team to do all things marketing across the UK, France, and Germany.
Here’s a sample freelance marketing team composition:
2. Hire based on fit, not fee
Let’s be real: there are plenty of “freelancing gone wrong” stories shared by companies online. From missed deadlines to subpar service quality, some clients got burned by negative experiences. So others feel reluctant to give freelancing a greenlight.
Yet most negative stories have one common theme: you get what you pay for. When you hire the cheapest service provider — be it a hairdresser or a mobile app developer — you shouldn’t expect a “luxury” result.
Remember: freelancers pay their own taxes. To earn above the living wage, they can’t charge you peanuts. Experienced freelancers use the cost-plus method for pricing their services. They don't just rely on ongoing market rates, but also factor in the “overhead costs” — from tool subscriptions to tax costs in their location — into their project rate. Because of that, the average freelancer's hourly rates are higher compared to in-house employees.
In the long run: you still save money when hiring freelancers. You don’t have to pay employment taxes, offer any extra benefits or social security payments, or pay for their gadgets, training, or software subscriptions (unless you want to!).
Also, location independence plays a role in freelance rates. Hiring a freelancer from the EU vs. the US can be cheaper because of the differences in cost of living and market compensation. Even within the EU, employment costs per country vary a lot between countries. German-based UX designers often bill higher than Romanian ones.
Before you go on a freelance team hiring spree, you need to make a preliminary hiring budget. To do so, factor in:
- Market rates at the freelancer’s location
- Experience level
- Time commitment
- Setup status (e.g. what tools they have)
Finally, ask the freelancers for direct quotes and see how they compare to your numbers. If you are constantly out-budgeted, perhaps you should run the figures once again.
3. Tap into the power of networking
Few freelancers work solo these days. Most have a great community behind their back — freelance friends, colleagues (freelance team members and full-timers), personal and professional contacts in the industry.
Many freelancers also self-organize into bigger teams to scale their business. They hire subcontractors or involve business partners from adjacent industries to cover more work.
Take it from Alma Abreu, a project management consultant for SMEs and startups. To bring her consultancy into a new market, Alma assembled her own freelance team of Spanish-speaking writers, editors, and translators to help her on an ongoing basis. Kat Boogard, a freelance writer, mentioned that subcontracting has helped her take a proper 2+ month maternity leave without losing much of her income.
Once you have a few reliable freelance hires, ask them if they can introduce you to more great people. The freelance economy runs on referrals, not just between clients, but between freelancers too. One freelancer can easily connect you with even more independent professionals in their domain and beyond it.
Also, your freelance “connectors” can help you manage your freelance team. If they are up for it, you can put them in a mid-management role to act as a liaison between you (as a manager) and other team members.
For example, you can have a cross-functional team of a freelance growth marketer, reporting straight to someone in-house. This person, in turn, manages their smaller freelance team of a writer, designer, and social media expert. All of these people still report back to you, but you don’t spend as much time every day supervising their work.
4. Provide adequate onboarding
Onboarding is the mortar of effective freelance team management.
If you struggle to onboard new freelancers effectively, you’d alienate a lot of great peeps. Likewise, haphazard onboarding also affects the timelines, decreases freelancers’ engagement, and otherwise drags the project down.
So start your collaboration off on the right foot by doing the following:
- Create and organize a stack of legal documents for freelancers — standard work contracts, legal clauses, NDAs, tax forms, etc.
- Determine the optimal way for paying freelancers at high speed and at a low cost.
- Create a set of orientation materials for freelancers — reporting schedule, communication calendar, project briefs, style guides, templates, etc.
- Set up an introductory video meeting to introduce the freelancer to the rest of the team and answer their questions.
- Provide them with further references and performance indicators to better communicate what great work means to you.
Learn more about creating the optimal freelancer onboarding process from our in-depth guide.
5. Adapt your communication practices
The main purpose of onboarding is to develop a good rapport with your freelancers.
You need to set baseline expectations around reporting, timelines, extra information requests, and so on. Yet, that’s just the first step.
To manage freelance teams effectively, you also need to communicate continuously.
Remember: no matter how good they are, freelancers don’t know how work is done at your company. Sure we can guess based on our past experiences. But the guesswork can only take us as far — we also expect your support.
A 2022 study of knowledge workers by Microsoft found that clients are often guilty of “passing the buck” to the freelancer when they don’t know how to get something done. Such open-ended tasks result in scope creep for freelancers (which they are not properly paid for).
Another issue the report spotlights is information asymmetry. Freelancers don’t have the same knowledge of your operational dos and don’ts as employees have. Because of this asymmetry, they can’t get the job done the way you think is “obvious”.
Sadly, the report notes:
“Freelancers described an asymmetry in which ‘getting a task done’ was perceived to be a collaborative effort for freelancers, but an ‘overhead’ for clients. Consequently, freelancers described how the ease and efficiency of this ‘collaborative effort’ depended on their own capacity to educate the enterprise about their work and resource their own work process. This both transferred costs and overheads to freelancers and stood in contrast to employees’ experiences.”
The above dynamic isn’t right. Freelancers should be proactive with asking questions and clarifications, but they don’t have to weed essential project information out of you, one desperate email at a time.
This inability to clearly communicate goals, preferences, and priorities stands in the way of effective collaboration with freelancers.
So how do you deal with internal communication issues? Here are our best tips:
- Establish a clear reporting cadence, based on your freelance team organizational structure. Determine who should be cc-ed on all comms vs main reports only, who issues final approvals, who needs to attend meetings (or not), and map out how information should travel from the bottom-up and back.
- Document standard operating procedures, best practices, and decisions made during meetings. Build out a written backlog of knowledge everyone can refer to. This promotes a crucial practice of “knowledge reuse” — a system, where you don’t have to send over stuff to people multiple times. Instead, everyone can log in and access a backlog of knowledge, stored in one place.
- Promote knowledge sharing. You discussed a cool growth hack during a phone call. Awesome, write it down for others to refer to. Encourage your internal people to proactively share knowledge with freelancers. Use collaborative and knowledge management tools to prevent information hoarding and silos.
- Master asynchronous communication. Prioritize written communication or video memos over endless face-to-face meetings or real-time chats. Async communication is less disruptive and lets your people do the deep work, without constantly jumping off to “listen in” on yet another meeting.
- Collaborate and collect feedback to better understand when and why your freelance team struggles to move forward and what they believe could be done better.
To manage a freelance team you need structure
To manage freelance teams you need two things:
- A lean organizational structure for distributed teams
- Effective communication practices to back it up
You need to decide whether you want to have a cross-functional team (in-house peeps, augmented by freelancers) or a ‘monoline’ freelance unit (e.g. remote UX design team). Then decide who’s going to be the main manager and who should facilitate at a lower level.
Then think how you can best break down large projects into individual scoped tasks to dole out to freelancers.
Finally, learn more about your freelancers' standard work processes. They may hint about process improvements you can make on your end too.
With the above in mind, design a flexible organizational structure for tying individual members into a close-knit team. And to get the admin side of things out of the way — payroll, compliance, and onboarding — you can lean in on Xolo.
About Elena
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 so she can focus on her solo B2B content writing business without stressing over the compliance and admin overhead.