SMEs and Freelancers: What You Need to Know Before Hiring a Freelancer

Posted on 11th May 2023

---

Imran Salam, Head of Accounting and Tax at Dolan Accoutancy shares insight on which industries are turning towards freelancers

Freelancers are self-employed individuals that earn money on a per-job basis, working with a variety of different clients, often at the same time and usually over short periods. Hiring freelancers is becoming increasingly popular with SMEs for many reasons. The economic uncertainty has led many companies to delay long-term recruitment decisions and work with freelancers. Moreover, the financial challenges make freelancers a more attractive option, with no need to provide paid holidays or other benefits. 

A huge 65% of SME owners use freelancers to support their businesses. Many believe that this enables them to focus on the more important areas of running their business whilst freelancers take control of areas such as web design. 

Benefits of freelancers for SMEs

Hiring freelancers has plenty of benefits specifically for SMEs. Outsourcing can be one of the wisest business decisions you can make as an SME owner, here are just a few positive benefits:

1. Cost-effective with fewer overheads

As a small to medium-sized business owner, you may be faced with limited resources and funding to grow and stabilise your business. This can make hiring specialised in-house employees difficult, which is where freelancers make a significant difference – being more affordable with practically no overheads. Freelancers don’t come with training and benefits costs, they also don’t require desk space or equipment. This makes it easier to access specialists without committing to a full-time salary. 

2. Instant access to specialised expertise and knowledge

SMEs can greatly benefit from the untapped potential of freelance talent. Say you have a specific need for a web developer, for example, instead of hiring a full-time developer for a one-time update, you can hire a freelancer who’s an expert in your field. This enables you to access professional services without committing to a full-time employee, especially if certain tasks are one-off requirements. It’s worth exploring where the knowledge gaps may be within your current team. This can help direct your search for a freelancer.

3. Free up your existing employees

SMEs are often made up of smaller tightly-knit teams that can wear multiple hats throughout the day. Sometimes, when there’s a knowledge or talent gap, employees are faced with an increased workload to compensate for any lacking areas. By hiring a freelancer to fill these gaps or to take on some of the day-to-day tasks, your employees are free to focus on their roles and perform to the best of their ability. 

4. Flexibility

As your business grows, so do your requirements. Freelancers are able to adapt to your changing needs, providing more or less work as needed. Perhaps you decide to hire a freelancer on a recurring basis, with consistent expectations of the work required. Or, perhaps you operate on a more transactional basis, hiring freelancers for one-off projects. This level of flexibility provides the peace of mind that you can easily scale up or down the amount of work required.

5. Access to the global market 

Gone are the days when you’d be limited to only hiring talent within your local market, with the huge uptake in remote working technology, freelancers based anywhere in the world can support your business. Not only does this widen your talent pool but can also improve efficiency, with freelancers from different time zones being able to hold the fort during all hours.

What do SMEs need to know when hiring freelancers?

When hiring freelancers, it’s important to follow the steps below to ensure a seamless process:

1. Define what you’re looking for – consider your long-term goals, the level of expertise required and a time commitment. Not only will this help narrow down your search but will also tell the freelancer whether they are right for your business.
2. Set a budget – research the going rates for the type of work and expertise you’re looking for. This will help to narrow down your search further and set realistic expectations for both yourself and the freelancer.
3. Look for relevant experience – one of the main benefits of freelancers is their niche expertise. This enables you to work with professionals who have experience in your industry.
4. Read reviews – whether you’ve found a freelancer through a hiring website or their own site, make sure you look for any reviews or feedback from clients. This will tell you whether they have a positive track record.
5. Draw up a contract – it’s vital that you put down your expectations in writing to avoid any complications further down the line. This protects both yourself and the freelancer.

Freelancer employment rights

Whilst freelancers aren’t full-time employees, they are entitled to the following employment rights:

• Health and safety protection
• Protection against discrimination in the workplace
• Being legally protected by the terms of the contract
• The right to a safe working environment

How to make the most of hiring a freelancer

Freelancers can significantly help your SME grow, filling any talent gaps and flexibly working around your requirements. However, to make the most out of your pool of talent, you need to set a clear brief and expectations. Detailing the scope of the work required and providing a helpful brief will ensure that you start off on the right foot. It’ll also help the freelancer to produce their best work. 

Maintain a strong relationship with your freelancers with regular communication and helpful constructive feedback. Whilst freelancers won’t require as much input from you as full-time employees, it’s important to invest time into them to gain the most out of the relationship.