More and more companies are turning to freelancers to fulfill their needs for flexibility, specialized skills, and cost-effective solutions. This trend is reshaping the workforce and redefining how businesses operate.
In this article, we explore 13 compelling reasons why companies prefer freelancers over traditional employees, backed by the latest freelance hiring trends and benefits.
Let’s get started.
Why Do Companies Hire Freelancers?
According to a report, 78% of companies are hiring freelancers to help them increase productivity and save costs. Here are the strongest reasons companies are pivoting to hire freelancers over in-house employees.
1. Save resources (time + cost)
Many companies hire freelancers today because it saves time and money. When you hire an in-house staff, you’re not just worrying about their salary but the benefits you have to pay as well as providing safe working conditions.
But with a freelancer, you don’t have to worry about these things. You just have to factor in their rates as part of your business expenses to ensure you’re not spending more than you earn. 55% of employers think hiring freelancers is more cost-efficient than traditional employing models
Also, the nature of your business determines if hiring a freelancer is better. For example, suppose you run your business from your bedroom and need an assistant. In that case, there’s no reason for you to hire an in-house administrative assistant especially if their responsibilities can be done from anywhere in the world. You’re better off hiring a freelance virtual assistant living in Illinois who can handle your emails and everything excellently.
Leaders at SMBs who hired a freelancer estimated they saved just over $71K/campaign, on average. Leaders at enterprises who hired a freelancer estimated contract hires save them an average of $124K per campaign." -@MarketerHire
Peter Kang, CEO of Barrel Holdings, says you can run lean and profitable businesses with freelancers, mapping their costs to signed work & not having to worry about utilization.
2. Close team gaps
Where your team lacks a skill set and there’s not enough budget for in-house staff, you can hire freelancers to close the gap.
For example, you started a podcast show that only runs one season bi-quarterly. In this case, you may need a video editor to work with. But looking at it generally, you only need their editing skills for two quarters in the year. Hiring an in-house editor wouldn’t be a great idea anymore, as what happens when there’s no podcast to edit?
Instead of hiring someone and giving them tasks outside their skillset or letting them go eventually because you can’t convince the C-level executives why you still have them on your team, you can simply close the skill gap in your team by hiring a freelance editor.
3. Access to specialized talents
To acquire skills that are momentarily unavailable, 49% of businesses prefer freelancers over staffing firms. This may happen to due business size, location, or any other factor that prevents them from having the skill in-house.
Also, 61% of freelancers have two to three areas of expertise. Having access to this expertise is one of the reasons companies continue to hire freelancers.
An early-stage investor and growth consultant, Samantha Anderl advises companies on why they should hire freelancers: "You get to tap into specialized talent, someone who has done exactly what you're looking for before, multiple times.”
4. Scale faster
Many freelancers offer specialized skills in various locations, some of which may not be accessible to you. Hiring freelancers ensures you always have quality hands doing quality work.
“Hiring freelancers & part-time experts has always helped us scale our efforts & grow quickly. I can never understand why founders hesitate to hire remote employees & contractors. If you have to beat large companies in the war for talent, you need to hire smartly,” said Hrishikesh Pardeshi, Founder at Flexiple.
When planning an event or launch that requires various skill sets unavailable within your team, working with freelancers can ensure you get everything you need in time and of the best quality. The skills you lack in-house, you can make up for with freelancers and compete with other large organizations.
5. Risk avoidance
Working with freelancers means companies can avoid various risks with staffing and have the flexibility to scale the workforce up or down based on project demands.
Also, freelancers work under clear contractual agreements that outline the scope of work, deadlines, and deliverables. This clarity reduces the risk of misunderstandings and ensures that both parties have a mutual understanding of expectations and deliverables.
Additionally, they have controlled access to the company’s data, thereby minimizing the risk of information/data breach. This approach ensures that sensitive information doesn’t fall into the wrong hands.
6. Innovation and fresh perspectives
When working with freelancers, you’re tapping into a diverse population scattered across the globe. These geographical differences bring together unique perspectives, ideas, and ways of work.
Additionally, it exposes in-house employees to new ways of thinking and doing things. They’re not bound by an internal accustomed mentality of “that’s how it’s always done.” They help you break free from such a mentality and bring and new and fresh perspective to the project which could greatly benefit everyone.
7. Short Deadlines
Before you get Evelyn, the associate from Finance to do something, you’ve got to be sure Cheryl, her direct line manager doesn’t have her on a long task sorting expenses, budgeting, and reports. If it’s urgent, Evelyn already has lots of urgent tasks, so she’s just going to ask you, “Which one should I prioritize?”
With freelancers, it’s a lot different. They’re used to working on short-term deadlines and can get on a project immediately after you’ve shared a brief. Also, they’ve done similar work with other businesses, so they may not need a lot of hand-holding.
According to a report, 62% of companies hire freelancers because they think that freelancers complete the projects faster. So, if ever in doubt, remember that freelancers are incentivized to do work while employees are incentivized to get a job done.
8. Reduced onboarding time
Unlike traditional employees, who often require extensive orientation and onboarding processes, freelancers are independent professionals accustomed to jumping into projects quickly.
This is especially helpful for companies who need immediate expertise without the delays associated with lengthy onboarding processes.
Also, the administrative burden of onboarding a freelancer is lighter compared to a full-time employee. There’s no need for benefits or extensive documentation, as freelancers work on a contract basis with clear deliverables.
9. No long-term commitments
Working with freelancers gives you more freedom and flexibility than working with any other client. The only thing binding you both is the exchange of services for payments. They work, you pay. No extra bonus, insurance, or benefits are added. Additionally, they’re not obligated to work 8 hours a day for you, they work at any time.
For example, you can contract a consultant for one hour to share his expertise. You can hire a freelance virtual assistant to work for 4-hours a day. You could hire a web developer to work on your e-commerce website which may likely be days weeks or months. The point is, working with freelance is as flexible as it gets, nothing is set in stone.
10. Flexibility
Since freelancers are in control of how they work, they can be flexible enough to work on weekends and late nights to complete a project. Unlike employees with set working hours, freelancers are flexible enough to work at any time to ensure they deliver on tasks. According to Demandsage, a full-time freelancer typically works 43 hours a week. So, if your projects go longer than anticipated, you can count on freelancers to help you scale operations to ensure everything works smoothly.
Freelancers vs Traditional Employees
When hiring, knowing whether you need an employee or a freelancer can save you lots of time and resources. Each type of worker offers unique benefits and work styles, impacting how you manage and compensate them.
Employees typically receive perks like PTO, health insurance, and more, while freelancers enjoy greater flexibility in their work. Knowing these differences will help you determine the best fit for your company’s needs.
Similarities
When comparing an employee and a freelancer, these are the key similarities;
1. Provision of services
Both types of workers provide services that contribute to your business goals. Whether it’s an employee working full-time or a freelancer handling specific projects, each plays a vital role in your operations.
2. Compensation
You’ll need to compensate these workers for their contributions. Employees generally receive a salary or hourly wage, while freelancers are paid per project based on contractual agreements.
3. Client relationships
Employees have an ongoing relationship with your company, while freelancers typically work with multiple clients. However, both maintain professional relationships that are essential for the delivery of services.
4. Work output accountability
Each type of worker is accountable for the quality and completion of their work. Employees are monitored by supervisors, while freelancers are evaluated based on client feedback, reviews, or contract adherence. Their performance can influence future opportunities within your company or in the broader market.
Differences
Freelancers are technically employees of an organization. However, the nature of their job clearly differentiates the types of employees they are. Employees have a stable income payable by the employer at the end of each month. However, freelancers only get paid at the end of a project or task. This task may not be recurring as with regular employees.
Nonetheless, these are the differences between an employer and a freelancer.
1. Independence:
As an employer, you have more control over how, when, and where an employee works. In contrast, freelancers have significant autonomy, often working remotely and setting their schedules.
2. Nature of work
Employees typically have a more formal and ongoing relationship with your company, as they often work under an employment contract that requires full-time commitment during work hours. Freelancers, however, manage multiple clients and projects simultaneously, providing flexibility but less attachment to your company.
3. Payment and benefits
Employees benefit from a stable income and additional perks such as health insurance, retirement plans, and paid time off, all of which you, as the employer, provide. Freelancers, on the other hand, are paid based on their projects or contracts and do not receive employment benefits.
5 Common Platforms to Find Freelance Work
Companies who hire freelancers do so through various methods. While some prefer referrals from their personal or professional networks, others go through social media or job boards. However, the most effective way of finding and hiring freelancers is through freelance marketplaces or online talent solutions.
Some of the most common platforms used are;
1. Expaat
Expaat is a freelance website connecting clients with the top 5% freelancers in Nigeria and worldwide. Whether you’re searching for a software developer, designer, research analyst, digital marketer, or copywriter, you’ll find top global talents in these fields on Expaat.
As a client, you can start by going to expaat.co and clicking the “Hire an Expert” button to hire top freelance talents on Expaat. Freelancers on Expaat are vetted and skilled so you are 100% assured of the quality of work you’re getting.
You can hire talents for both long-term and short-term projects. And if there’s a need to work with these talents physically, Expaat provides a solution.
2. LinkedIn
LinkedIn is a popular social networking platform also used to find and hire freelancers online. With over 1 billion members in more than 200 countries, LinkedIn is a popular place for finding freelancers and full-time employees. Although it’s not a freelance marketplace, you can still post job search and hire the contractor you need.
3. Freelancer.com
Freelancer.com is a platform exclusively for freelancers. The platform supports freelancers to develop their skills through regular contests and competitions. Winners win extra cash and can showcase the project as part of their portfolios.
4. PeoplePerHour
If you prefer hiring freelancers per hour, PeoplePerHour is a great platform to use. Here, you can hire diverse talents hourly and only make payments when the work is satisfactory.
5. Truelancer
Truelancer is a freelance marketplace that connects top-rated freelancers to clients in need of them. With a talent pool of primarily Indians and Africans, Truelancer is a place to get your work done at the best quality while saving costs. The site offers great features for managing and communicating with freelancers seamlessly.
READ MORE: 13 Best Freelance Websites to Hire Top Freelancers in Nigeria (2024)
Common Challenges with Working with Freelancers
Working with an in-house employee is not the same as working with a freelancer. Although freelancers are very flexible and offer a lot of advantages, there are still limitations as to how you can work with them.
Before you hire a freelancer, here are a few challenges to be aware of that may come up;
1. Improper Communication
Due to lots of factors like time zone, geographical location, work nature, etc.. you may encounter communication challenges. For example, there could be misunderstandings about project requirements, deadlines, and feedback. Also, freelancers who may not meet up to deadlines fail to communicate prior, hence leaving everyone hanging.
2. Unavailability for Work
Freelancers can work with multiple clients in various locations, which can make them unavailable when you need them. This can cause delays if they're working on other projects that require urgent tasks. To avoid this, discuss availability upfront and set clear expectations about response times and deadlines.
3. Poor Work Quality
Sometimes, freelancers may deliver work that doesn't meet your standards. This can happen if they don't fully understand your expectations or if their skills aren't as strong as claimed. To understand the quality of a freelancer’s work., check out their previous work or give a sample test to assess them yourself. Remember, low rates don’t always guarantee the best work.
4. Lack of Commitment
Freelancers are not employees, so they might lack the same level of commitment to your company. They might prioritize other clients or projects which may negatively affect your project.
5. Data Security Concerns
Working with freelancers can pose risks to data security, especially if sensitive information is involved. Freelancers might not follow the same security protocols as in-house employees, leaving you at risk of a data breach.
Save More Time. Hire the Top 5% of Freelancers on Expaat
To save more time on hiring and get your jobs completed in time, working with freelancers is the best way to go. It’s even easier now with various sites available, but you’ll still have to put in the work to get the best out of any platform you choose.
Luckily, Expaat is here to help you with the hiring process. From helping you find the perfect match to onboarding them on your team, we make it easy to find and hire the best freelancers globally.
Don’t agree? Sign up on Expaat and see how easy it is to hire and work with freelancers in Nigeria and across the globe.
