At some point or another, most companies will find themselves working with a contractor or freelancer. And it’s no mystery why. It’s great business practice!
They represent the easiest way to access some of the best niche talents. Working with a contractor or freelancer allows you to push forward on essential projects, expand and reduce your workforce as necessary, and have more flexibility in how you do business.
That’s not to say there aren’t drawbacks.
While the contractor paperwork and overheads are less than with traditional employees, different expectations can influence what you’re prepared to put up with. For example, you may only need freelance support for a short project with a tight deadline.
If that’s the case, paperwork that draws out the formal onboarding program can be counterproductive to what you want to achieve. The same goes for budgetary considerations.
Many small businesses use contractor support primarily due to the reduced costs. But poor planning can lead to unforeseen expenses or the need to hire legal support.
That said, as they say, where there’s a will, there’s a way. Here’s how to reduce freelance paperwork by outsourcing your hires (and save money in the process).
The benefits of contractor help
The last thing we want to do is to turn your particular company or organization off from working with freelancers and contractors. They genuinely can transform the operations of businesses of all sizes and provide access to an incredible talent pool. Every business owner we know has benefited dramatically from hiring one.
Before discussing the paperwork involved in hiring freelancers, we’ll touch on some of these benefits.
Flexibility and access to expertise
The most significant advantage of freelance help is undoubtedly the flexibility and access to industry experts without delay. At the drop of a hat, you can find, start the onboarding process immediately and begin working with talented individuals.
Many organizations despise the lengthy, drawn-out vetting and onboarding process. If you work with a reputable outsourcing marketplace, your focus can be diverted elsewhere, freeing time to perform tasks and operations that benefit your customer base. All you need to do is set up an online onboarding process that works for you, and away you go!
More often than not, working with freelancers allows you to access skills that aren’t currently available among your team members, drastically improving your ability to reach a goal.
Employing full-time employees can be a risk just because you’re making a huge commitment with a new hire. You face a significant financial burden and potential legal action if it doesn’t work out.
With freelancers, everyone is aware of the agreement, and you can swell your ranks or thin them as you see fit. The risks to your business are minor.
Yes, freelancers do save on costs. Although hourly rates can differ, and some freelancers charge a lot for their work, you’re still spared the price of an entire contract and all the associated benefits.
If you hire many freelancers, you can also lower labor costs and save money on office space, technical equipment, training, and resources, which independent contractors generally take care of themselves.
Freelance contractors are used to working independently, getting jobs done within the specified deadline. More often than not, they’ve done this hundreds if not thousands of times and, assuming they’re solid professionals, should be able to carry out any task with minimal management.
Finally, working with freelancers means you can access talent from anywhere in the world. If you want to hire someone full-time, you really do need to be in the same country. Often there is the expectation that they move to where your company is based.
To get access to the best full-time talent, a lot of paperwork and expense are involved. By outsourcing, you can quickly access the exact skills you need, no matter where they are in the world.
While this arrangement can change the company culture somewhat, as you now have a blended team of consultants and full-time hires, the pros outweigh the cons.
Hiring freelancers: What’s involved?
The benefits speak for themselves and entirely outweigh the risks. But you need to ensure everything is properly to have a streamlined experience that’s entirely above board when working with freelancers.
Please note that any information provided below is for informational purposes and should not be considered legal advice. If in doubt, contact a professional.
Contract and statement of work
The first must-have is a contract and statement of work (SOW). No matter how short the project is – even if it’s just for a day – you need to have an independent contractor agreement to protect both parties.
This agreement is legally binding and clearly outlines the type of relationship and end products to be produced. The Statement of Work isn’t essential but is a good idea, especially for one-off projects like a website build. It outlines the details of the outsourcing services, including the timelines, budget, and other information.
In many cases, the contract will be enough, but an SOW is recommended if you’re worried about potential disagreements.
Keeping the IRS happy
Unsurprisingly, freelance workers still have to pay taxes. So, to keep the IRS happy, you need to verify the individual or business entity’s name, address, and Tax Identification Number (TIN).
If you’re working with a contractor based within the United States, this will mean filling out the W-9 form, and you will use information from this form to complete the 1099-NEC at the end of the year.
For anyone outside the U.S., you’ll need to fill out the W-8 instead of the W-9. In either case, you’ll need their TIN, a Social Security number, or Employer Identification Number.
A non-disclosure agreement (NDA)
Asking the freelancer to sign an NDA is entirely at your discretion, and you do not have to do it. That said, freelancers often work with many companies within the same niche, and protecting some of your confidential information may be a good idea.
It’s simple to do, many free templates are available, and it’s another layer of protection for you and your business.
We’ve touched on this before in our freelance compliance explainer, but how you pay freelancers must align with their work classification. This means you can’t pay them regularly as you would a salaried employee. Instead, they must send you an invoice for specific outsourcing services.
Apart from that, you also need to make sure before the relationship begins that you can pay them no matter where they are based.
Outsourcing your hires with Quickly Hire
Putting the time and effort into getting the paperwork is essential to avoid extra costs and overheads. You either have to do it yourself for every freelancer you hire or find outsourced help to ensure everything is above board.
If you don’t have the time (or budget) to prepare all the paperwork and ensure everything is up to scratch, Quickly Hire can help you.
Quickly Hire is a freelance marketplace that works to smooth the process for freelancers and companies looking to share their incredible skills. Not only does our service help companies with all the paperwork involved, but we also provide access to our broad network of talented freelancers. We even advise our clients on how to set up easy-to-understand onboarding programs!
If you’d like to learn more about how we can help you find the right talent for your specific development needs – without the hassle – get in touch with us today!