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5 Things to Have in Place Before Hiring Freelancers Businesses need to do a little prep work for the relationship to succeed.

By Peter Daisyme

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.


Businesses are increasingly embracing freelancers, realizing the many benefits of using contract workers for their projects. With more than 20 million people expected to leave the workforce to become freelancers in the next five years, businesses will find themselves dealing with a talent shortage.

Unfortunately, half of all businesses are still not prepared to bring freelancers onto their teams. Their hiring processes are set in stone, with new employees recruited, chosen and promised an annual salary.

"It was quite shocking for us to see how few companies are actually well-equipped to work with tech freelancers," said 10x founder Rishon Blumberg. "Some companies have great practices in place, while others require a lot of hand holding to help ensure a freelance project runs smoothly. Part of our mission is to help modernize the way companies engage with freelancers, especially strategic freelancers like the ones we represent."

Related: 4 Ways Enterpreneurs Can Prepare to Engage With Today's Freelancers

To accommodate a new freelance-driven marketplace, businesses must shift the way they think of their teams, and put processes in place that make it work. Here are a few things you should do to prepare your businesses for freelancers.

1. Have a recruiting strategy.

Finding talented freelancers can be complicated, but if you have a network in place from the start, it's easier. Ask colleagues for referrals, and use online job boards to build a core group of reliable freelancers that you can turn to every time you need work completed. If you need highly-specialized workers at an affordable rate, consider working with a specialist who matches freelancers with the businesses that need their skills. Set aside at least a few minutes to speak one-on-one to each freelancer before making a hiring decision. This can help avoid freelancers who don't follow through.

2. Know your budget.

Pay can be a sticking point when trying to line up freelance workers. Many professionals have a set rate for each project, so one of the first questions about any potential job should be about pay range. If you set your offering prices too low, you'll have difficulty attracting experienced talent, but if your rates are too high, you'll quickly run through your budget. Calculate the amount you can afford to pay before you start your search. If you notice you can't win workers at that rate, consider increasing it.

Related: 5 Tips for Hiring Freelancers Who Will Boost Your Business

3. Assign a manager.

Someone on your team will need to manage freelance workers, which can be complicated if they're working remotely. Coordinating on-site team members and telecommuters, whether they're salaried or contract, can be challenging, so it's important to find someone who will take the responsibility seriously. The manager should at least have a working knowledge of the duties that will be assigned to freelancers -- which isn't always possible, especially if a business needs specialized work such as application development or data analytics.

4. Set up paperwork.

Before beginning your freelancer search, you'll need to have paperwork in place that will address all of the regulatory requirements for working with contractors. Make sure each worker knows the scope of the work, as well as the methods through which work should be transmitted to you.

You'll need to have a completed W-9 form on file for each freelancer, as well as a bookkeeping process that tracks each dollar you pay for reporting to tax authorities. If in doubt, you should have a bookkeeper and HR expert review your forms, accounting processes and paperwork to ensure you're above board with everything you're doing.

5. Choose technology.

Your workers will need tools on hand to do their work and communicate with your management team. You'll likely need online collaboration software that lets team members work together no matter where they are. You'll also need a way to communicate face-to-face with those workers, especially if getting together in person is out of the question.

Related: Remote Control: The Tools and Tactics You Need to Manage a Far-Flung Workforce

A video chat service for multiple meeting participants is essential when working with freelancers and salaried employees who aren't in the office. Finally, consider how you'll pay freelancers and put resources in place that will make it easy to ensure contractors get paid in a timely manner.

Freelancers will soon become an essential part of operating a business. It's important that companies start preparing for the trend now. By researching as much as possible about what your business needs to legally work with freelancers, you can start to ready your environment for a new way of hiring.

Peter Daisyme

Entrepreneur Leadership Network® Contributor

Co-founder of Hostt

Peter Daisyme is the co-founder of Hostt, specializing in helping businesses host their website for free for life. Previously, he was co-founder of Pixloo, a company that helped people sell their homes online, which was acquired in 2012.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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