7 Tips for Building a Successful Team of Freelancers

9 Comments

The landscape of the workforce is changing. According to Freelancers Union, a non-profit advocacy organization, approximately 30 percent of the U.S. job market today consists of independent workers: consultants, freelancers, temps, and independent workers. By the end of the decade, this figure is expected to reach 40 percent.

The availability of a growing independent workforce lets companies easily reach large talent pools of specialists and contractors. And while this strategy is hyped as a cost-saving measure, numerous other benefits ripple through small and large businesses alike. By hiring outside talent, companies are able to quickly staff up or down as needed to meet the dynamics of the marketplace. Companies are able to easily access particular talents or areas of expertise to fill niche requirements. And by shifting more and more work to offsite contractors, companies can lower the costs spent on facilities and office space.

However, this hiring trend brings its own set of challenges, as companies need to contend with effectively managing a geographically dispersed workforce that’s now tied to multiple employers. Conference room meetings and office visits are
replaced with emails, remote collaboration sites, networking, and electronic billing and funds transfers. Without the right tools and mindset in place, the benefits of contractors can quickly erode from the inefficiencies of clashing software systems, complex reporting and payments, and poor oversight of projects.

If you’re currently hiring independent specialists, or are anticipating moving toward this direction, here are seven tips to make sure you get solid ROI on your new workforce, ensure that the savings generated from hiring independent specialists are maintained, and can scale no matter what project size and scope you have:

  1. Set rules for projects, timelines and budget. Whether you’re dealing with in-house or freelance employees, clear communication of project deadlines, expectations, budgets and responsibilities is crucial. Define the rules and roles upfront. When every milestone, task, and deliverable is clear from the onset, you’ll always know where you stand and so will your team.
  2. Create a collaborative online work environment. When you’ve got multiple people across the country or globe involved on a given project, you’ve got to make it easy for everyone to work together, share documents, make comments, and view project status. A cloud-based workspace is the new and improved conference room. You want to create a one-stop-shop for all project-related documents, conversations, tasks, milestones, and financial information.
  3. Manage documents and conversations in a single place. A simple project can generate an astonishing volume of email. Eliminate the back and forth by communicating in a secure, shared workspace. This centralized area creates an instant audit trail for any project that’s readily accessible to all involved. It also helps to minimize those pesky emails that eat away at everyone’s productivity: What’s the latest version of the document? When do you expect to have the first draft? Where are we in the review cycle?
  4. Stay on top of hours throughout the project lifecycle. On a weekly, if not daily, basis, you should be tracking the actual hours spent by each contractor on a given project, and then compare those numbers to the project’s status and budget. There’s simply no excuse for budget surprises. By continually monitoring a project’s status, you’ll identify potential risks early and be better equipped to make necessary changes to ensure the desired outcome. Of course, this is all easier said than done. It’s critical to first instill a culture where project reporting and hours are given a high priority (and not just deemed busy paperwork). Then give your contractors the right technology tools to make daily or real-time reporting as pain-free as possible.
  5. Accept changes. Even the best-managed projects can run into unforeseen roadblocks, or changes in strategy. Make sure you have a workflow in place that can easily handle change, making it as simple as possible for all parties to quickly analyze and approve any changes in price or schedule.
  6. Link invoicing to actual project management. Invoicing and payment may be the final step in a project, but they shouldn’t be an afterthought. Each invoice item should be directly linked to actual tasks and deliverables, so that anyone (and not just the specific contractor and project manager) can instantly understand the output purchased. Contractors should be able to instantly create invoices right from inside their project workspace as a logical extension of the project activity. This not only saves everyone time, but ensures seamless continuity from initial contract to project deliverables to final payment.
  7. Offer career development and other services. Just because workers are not your full-time employees doesn’t mean human resources and career development services aren’t important. Consider providing access to preferred health insurance rates, offering help on setting up retirement accounts, and other resources. By providing a good set of personal and professional development tools, you’ll benefit from having a pool of happy, effective and loyal contractors.

Fortunately the convergence of new cloud technology with mobile and social computing is enhancing collaboration and the virtual workflow. As the world continues to move faster, it’s critical that your selected online environment improves everyone’s effectiveness, rather than constrains it. These cloud-based solutions must include simple transactional and collaboration tools, along with a heavy dose of business acumen sensibilities and a clear management platform.

Of course, technology alone can’t address management issues. Effective management requires a two-pronged solution of new technology tools and well-defined processes. You need to set the priorities and work culture from the top-down, and then deploy the right tools and processes to make those goals happen.

Ray Grainger is founder and CEO of Mavenlink, a comprehensive web-based project management platform that manages the
entire scope of business for consultants, freelancers, and other independent service professionals from a single application.

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9 Comments

romang01

Ray, thanks for the article. It’s like a refresher course on the basics. I like to build all 7 techniques around two words I picked up from the last decade. I’ll touch on the first word “accountability” and the second is a phrase “trust, but verified”. I find when I hold my freelancers accountable, well, they tend to never screw up; “drop the ball”. For Example I run a Professional Dj business. Instead of offering them $400 to perform a 4 hour event on Saturday I instead break it down like this. I say to them ” the event pays $225 plus $75 for time spent on phone with client, $25 for music download purchases and a $75 bonus if the said client doesn’t call Monday morning asking for any type of refunds. I do this because most freelancers are still in “employee” mode and unconsciously think they have some wiggle room for error. Huh! I think with 5 freelancers on my team, that’s too much error-
As far as the phrase “trust, but verified” that should be a different comment.
Thank You,

Roman Gabriel

John Uhri

Re: #7
Be aware that offering some of these services can put your company into jeopardy for treating contractors as employees. Depending on the circumstances you could be liable for employee payroll taxes if the freelancers are indistinguishable from regular employees.

Brie Weiler Reynolds

As part of a freelancing team of ten employees, I’d like to add one more suggestion that relates to number 7. For “other services,” I think a lot of freelancers, especially those entering this realm for the first time, would appreciate tax preparation assistance. Even just a tax accountant coming in to speak generally about freelancing tax rules would be hugely helpful.

Ondrej

HELOOOOO editorial team. Why not make articles like these series? For us: easier to build our knowledge by following the series. For you: people come back for next installment much more surely than for another random, if related article.

A great start here would be taking the numbered points and writing and separate article about each of them. With examples, screenshots, ballpark values of variables mentioned, etc.

Your contributors could teach us so much through series. Here’s an example: http://gigaom.com/collaboration/creating-and-implementing-your-marketing-plan-part-2/

Simon Mackie

thanks for your suggestion. I would note that some people don’t like multi-part articles, but I’ve noted your comment :)

Amber Goodenough

Great article Ray, as someone who manages freelancers full time I think you have covered a lot of good ideas and there are some great tips for both people who already use freelancers and those who don’t.
The reason I chose freelancers over traditional staff is because it keeps me mobile. I want to be able to live anywhere and still have a successful business. Secondly I think it opens up the talent pool since you have a larger pool to draw from. Also hiring freelancers makes it easy to replace someone who isn’t working out, which is not the case if they were on payroll.
The only other thing I would add from my own experience is that I enjoy getting to know my team. I think creating an online friendliness helps to create loyalty and make the projects more enjoyable for both of us.
Thanks for the great article.

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