What is freelancing?
Freelancing refers to work performed by someone who is neither an employee, a contract worker, a casual worker or an agency worker. Freelancers are self-employed individuals who outsource their skills in a certain field to clients. Freelancers can be found in diverse settings, from corporate roles like consulting, software development or bookkeeping to construction, media, marketing or other creative fields. Freelancers might work on one large project or simultaneously juggle small projects from multiple clients. These clients could engage a freelancer for a specific task or project, give them recurring tasks or even keep them on a monthly retainer for ad-hoc work.
Why do people freelance?
There are many reasons why a person might choose freelancing, and not all freelancers are solely self-employed – they may have a full-time or part-time job and engage in freelance work on the side. Below are a few reasons why people become freelancers:
- To increase earning potential: Given that freelance roles do not usually come with the security of a contract and regular work or other benefits like annual leave, pension contributions or sick pay, companies typically expect to pay a higher hourly or day rate to a freelancer than what they might pay a permanent employee for the same tasks. This means that freelancers who have a full client rota can command higher incomes than they would have as employees.
- For greater flexibility: Freelancers are often able to set their own hours, allowing them a high degree of flexibility. Clients may expect work to be completed by an agreed-upon deadline, but often do not require the freelancer to align their working hours with the company’s. This flexibility can be beneficial for freelancers with young children or caregiving duties, who are juggling multiple clients or jobs or who struggle with a physical or mental condition, like a disability, illness or neurodivergence.
- To gain experience in their field: The potential variety offered by freelancing typically supersedes that of a full-time role. Consider, for example, a journalist. A journalist employed at a specific publication often has a fixed task, and their work is required to align with the voice and political leanings of the publication. On the other hand, a freelance journalist could have their work published by a range of publications in different fields, from investigate or long-form pieces to travel articles, restaurant reviews, celebrity interviews or personal op-eds.
- To become a business owner: Self-employed workers in the UK can register and operate as a company. A successful freelancer with a packed client rota could easily scale their business, for example, by subcontracting to other workers in their field for a commission fee – formally or informally running their own agency.
- To support another pursuit: An experienced worker seeking a career change may decide to freelance part-time in their field of expertise to continue generating sufficient income while studying, training or building up work experience in a new field.
Related: Flexible working schedules: benefits and tips
Pros and cons of hiring freelancers
Hiring a freelancer for your business needs can come with both advantages and disadvantages. In the next section, we break down some of the key pros and cons.
Pros
- Can reduce costs: Because freelancers are not permanent employees, you do not need to engage them for longer than it takes to complete the work. You are also not expected to provide benefits or office space. This can be particularly beneficial if you are a start-up or have a small budget.
- Access to specialised workers: Hiring freelancers can give you access to a wider range of job types and skills than your existing staff. For example, you may occasionally need assistance with your website’s design, but if you are not a tech company, it would be unnecessary to employ a web designer full-time – a freelance web designer can easily meet these needs.
- High quality of work: Going freelance can be very challenging, and those who make it in the long term are often at the top of their field with extensive and diverse experience. This can mean a higher quality output than you may be able to get from employees with less experience.
- Fast turnarounds: Freelancers are often used to working to tight deadlines and may be able to complete work faster than your permanent staff, particularly staff who have multiple responsibilities outside of the task you require.
- Flexibility: The flexibility inherent to engaging freelancers can allow you to scale your workforce up and down when needed, for instance, to align with seasonal demand.
- New perspectives: Freelancers can bring a fresh pair of eyes to your company and may have helpful opinions or innovative ideas to share.
Cons
- Lack of company culture: Relying too heavily on freelancers and keeping only a minimal in-house team can hinder the development of a strong company culture and limit the formation of potentially valuable workplace relationships.
- Steep learning curve: Freelancers may be unfamiliar with your company’s unique characteristics, including your tone of voice and brand identity. These subtleties may take time for an outsider to grasp, potentially delaying the alignment of their work with your vision and objectives. Depending on your needs, freelancers may require training in your specific area, particularly in the tech field.
- Uncertain working hours: Freelancers may be managing multiple clients and projects, which can make it more difficult to coordinate schedules or arrange meetings. It may also mean negotiating deadlines.
Related: Six considerations for staff training
Hiring freelancers
Freelancers in the UK are independent contractors. They may be registered as a sole trader or as a limited company. In both cases, they are responsible for managing their taxes, business expenses and other needs like insurance. Here are a few things to consider when engaging a freelancer:
1. Inside or outside IR35
IR35 is legislation that regulates taxes. Hiring freelancers for specific projects or ad-hoc work is typically done outside of IR35. This means that you are not required to deduct any tax or National Insurance at source – it is entirely the responsibility of the freelancer to handle their own taxes with HMRC. Hiring inside of IR35 means that the freelancer is considered an employee for tax purposes. Such freelancers are often working solely for your company with an obligation on both sides to provide and accept work. They may also be required to work at your premises. In these cases, you must deduct income tax and National Insurance contributions from their pay. However, you are not required to provide leave, sick pay or any other benefits.
Read more: Everything you need to know about the IR35 rules
2. Where to recruit
Hiring freelancers can be done similarly to hiring employees, such as by posting an ad on job boards like Indeed. This approach is common, particularly for freelance roles inside IR35. However, top freelancers may not be actively searching for work on these platforms, so a direct approach could be more beneficial. You can find freelancers by conducting an internet search, where they may have their own website or portfolio page, or by leveraging social media and your professional network.
There are also numerous online freelance platforms that connect clients with freelancers, often handling payments and dispute resolution. While these platforms are convenient, the quality of freelancers can vary, especially on sites with a low barrier to entry. Alternatively, boutique agencies offer a higher calibre of vetted freelancers, providing more assurance in terms of expertise and professionalism.
Related: 10 recruiting strategies for hiring great employees
The working relationship
Before engaging a freelancer, it is important to define the scope of the work they are expected to do – whether it is an ongoing task or a specific project, your objectives, expectations and more. Scheduling regular check-ins and providing regular feedback can help keep projects on track and manage expectations on both ends. Always make sure to communicate fees and payment processes clearly in advance and to pay your freelancers on time.
The world of freelancing can offer you an excellent way to meet your business needs providing access to specialised talent for important projects or tasks that fall outside the scope of your existing workforce. Carefully considering your needs, budget, the type of freelancer you require, where to hire them and communicating your expectations helps ensure you receive quality work and develop a positive relationship with a freelancer that you can return to again in the future.
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