6 judgment mistakes companies make when refusing freelancers

Have you or your company rejected talent recently because they were a freelancer? Did you challenge that decision or did you do it because “we only hire full-time?”

Many companies I’ve talked to refuse right off the bat to consider freelancers for filling a full-time position. Most of the time the reasons for this were due to a misunderstanding about who a freelancer is.

When I applied for full-time roles as a freelancer, the most common response was silence. This was very uncommon for me, having been used to a reply time <24h from my previous applications.

I did get plenty of callbacks saying that they liked my profile, would hire me as an employee, but would only hire me as a freelancer if they cannot staff the role in time for their goals. So clearly there was a big demand for my skills. Why would companies miss out on staffing a perfect skill fit?

So whenever a company replied that they don’t hire freelancers, I tried to learn from the interaction and asked why. What I sometimes got were rather hostile answers. And oftentimes they were unchallenged judgment mistakes.

Misconception 1: Freelancers are flaky.

Freelancers have the reputation of being flaky. Don’t be put off by the stereotyping – usually, people who think this haven’t actually worked with freelancers, and probably never will in that company due to policy.

brown and green wooden plank boards
Flaky and Unreliable

What is flaky in a work context?

I’ve had an employed, non-freelance colleague, that one day after someone from management insulted him, went home, resigned by email, and didn’t come in anymore. Was he being flaky? I wouldn’t say so. I’d call him a guy who knows where to draw the line. Even if it’s not nice, it’s absolutely fair.

Flaky is someone who doesn’t deliver on their responsibilities.

What makes someone deliver?

Consider this. A freelancer has less at stake than an employee. Their career path is not threatened by an uncaring manager. Their hours are not set by some slave driver. They are not working for you because they have to – they don’t have a notice period and they don’t worry about job security.

A freelancer works with you because they enjoy the work. They can likely get the same rate or even better elsewhere if they tried, but they are working with you because they want to see things through.

If an employee flakes on you, would a 3 months notice period have made it better? It didn’t for the example above. It didn’t for the various employees that I ended up replacing as a freelancer. All of them had ragequit.

Why do freelancers leave?

Think about it. Unless the freelancer really has some serious difficulty, could it be that they left because you drove them away? Could it be that an employee would have been long gone by that time, notice period and all?

Simply consider that a freelancer, due to the nature of the relationship, is less likely to be negatively affected by a difficult company culture, more motivated to do the work, and more likely to stay. It’s still a game of chance though, as conflicting values or views will slowly drive people apart.

As an example, a hiring manager who is usually very critical of others but otherwise incapable of admitting mistakes himself, told me the story of how he hired a remote freelancer.

As the freelancer delivered work, he continuously gave him feedback about how he could do better. Eventually, the freelancer just stopped replying, without even asking for payment for his work.

The hiring manager reached the conclusion the freelancer was a “stupid ass”, while the freelancer was likely just cutting his losses arguing with an insulting client.

Misconception 2: Freelancers are expensive. Market value for this work is X.

Another reason for not hiring freelancer I often heard was that freelancers are too expensive. Companies compare their rates to the average salary and leave it at that.

But just because the average salary is X doesn’t mean that the top talent you want to hire is also worth X. Just because some talented individuals are unaware of their value and sell it for X, doesn’t mean you can keep talented individuals for X.

What is a freelancer worth?

A freelancer who has been on the market for a while likely has seen a lot of things. They likely can solve a variety of problems, because they already did. They have a contract to deliver value for money, and only bill you when they work.

Let’s say you have a good senior employee in data, that you hired for a salary of 80k. This translates to about 100-110k cost to the company after adding company contributions to health, pension, hardware etc.

For someone with 30d vacation, this translates to 60/h. Add some sick days and we bring this to 65. Add management and hiring overhead divided over the employee lifespan, and you are adding at least another 10 percent, taking your total to just over 70/h.

Now, say an average senior data freelancer charges around 80-100/h with no additional cost beyond optionally office space. Considering the short notice availability, self-management skills, lower risk to the employer, and additional experiences and skills that freelancers develop due to their work style, is +10-40% not worth it?

Why the 1 to 1 comparisons are wrong

Typically, hiring manager employees don’t make these kinds of calculations, and compare their net/gross salary with the freelancer’s total cost to the company, coming to the conclusion that freelancers are not worth it.

Sometimes, employers look for a good deal on salary and discount the freelancer right off the bat.

Well, a good deal on salary is either a lose-lose situation where the employee gets lowballed and leaves upon realizing.

Or it’s a lose-lose where a junior person takes a role for a low salary, which leads to a loss on company side because 2x cheaper but 5x slower is not a good deal. Meanwhile, the junior doesn’t have an environment that facilitates talent development.

Junior talent is not cheap

A junior person should not be regarded as a cheap workhorse – they aren’t. They are, in fact, very expensive professionals. Due to their level of experience, they are content and happy doing the more trivial work, as this gives them the exposure, learning, andpractice without the pressure.

This can be good if you already have specialists because it allows them to focus on solving specialist problems, which is what in turn gives them the exposure, learning, and practice they need to be happy.

However, if you need someone who can hit the ground running, junior employees are not the right fit. They will be slow in doing simple tasks because they are still learning. This again drives up your cost per unit of work.

Who would the professionals hire?

Still not convinced? Ask any freelancer who is good at what they do – who would they hire as help? A junior, a cheap employee, or another freelancer?

They will tell you they want another freelancer or a well-compensated senior employee because they dread onboarding and management overhead for a less experienced hire and because no one wants to deal with an underpaid and therefore demotivated employee. This would likely harm client relations.

One of my former managers, a serial founder and freelancer told me their take on the above. They would always prefer to hire a freelancer for a data role because you get higher value for the spend.

Can’t I just hire many juniors?

Now you might think you could just hire several juniors to make up for the lower speed. But can you read a book faster if you have two copies?

Teams don’t scale well, so a horde of average talent quickly becomes even less performant. The rule of thumb is that beyond 5 members in a team, adding more does not improve team output due to communication overhead, lowering accountability, and creating free riders.

Of course, if you have a good process you can increase the team size by reducing cross communication overhead.

Exponential communication line growth diagram
Exponential communication line growth in a growing team. Allow direct decisions to reduce communication overhead. Reference – Project management Stackoverflow question
“Buying 2 of the same book does not help you read it 2x faster”

Such, you want to hire the best you can for the work you need done.

Hiring a freelancer who is more experienced, motivated and autonomous is usually a better financial deal to get the work done. He’s also a solution to bolster an already large-ish team, as the freelancer will not worry about cross-communication and will likely be able to manage the team process if required.

A freelancer gets paid for output, not communication. Hours are just a way to quantify, but at the end of the month, the hiring manager looks at the output, not hours.

So next time you as an employee or hiring manager make the judgment call that freelancers’ cost to value ratio is of concern, think again.

Misconception 3: ‘Freelancers are only for short projects’

Another mistake companies make is to assume that hiring a freelancer is a lot of effort for a short, one-time project.

Yes, freelancers are the superweapon because they are here, available now, and have the competence to get it done. However, this doesn’t mean you only use it once.

If you had a magic cannon that shot miracles worth millions/year to your company at a cost of 15k/magic, would you only buy 1 magic?

What if a complete, new data warehouse with reporting takes 2 magics? What if hiring a team takes 3 magics? Or if building a CRM continuous improvement framework takes another 3 magics?

Wouldn’t you get a few magics? (And yes, by that I mean hiring the freelancer repeatedly for projects or a longer time period.) Or would you instead decide to go for a student worker for 700/month that can push copy-paste Excel reports around to give you 3 splits on your revenue data?

a fluorescent sign spelling "coffee"
Pictured: a Super weapon

A freelancer is a professional learner. Someone with a growth mindset.

A data freelancer is someone who makes things better, regardless of the subject at hand. They can optimize the hell out of anything, given enough freedom to operate. They might just be the ones bringing you those 2x multipliers.

Once you see the ROI of hiring a data freelancer, you’ll understand why it makes sense to work with them for longer than just for a short project.

Misconception 4:  ‘We need full-time help’

For some reason, many companies think hiring a freelancer means not getting full-time help. This is not true. You can get full-time help from a freelancer.

In Germany, there is a law to stop companies from hiring people as freelancers to save on social security cost. This law lists several criteria for when it’s illegal to hire a freelancer full-time, instead of making them a regular employee.

Despite this, it’s not uncommon to see a freelancer work for 18-month stretches with one client full-time, or for years part-time. All completely legal and without breaking any laws. The law can allow for this kind of thing. It’s a matter of doing your homework.

Such, full-time IS possible. Companies who insist it’s an obstacle, even though they know better, simply might want control over an employee’s time. A relationship driven by insecurity never turns out well in the long run.

A fear-driven client does not share values with a freelancer’s growth mindset. It’s OK to have either type of thinking, but one will move you ahead while the other will not. Not everybody wants a large business though, and there are many legit reasons to want a small operation.

Misconception 5: ‘We want someone focused on working with us, not distracted by other clients’

Many companies worry that a freelancer will have other clients next to them. They worry they won’t get their full attention and capability.

On first glance, this is an understandable worry. But there are two reasons why this is a judgment error.

Freelancers are less distracted than your employees

I worked in data as an employee for 5 years. I used to interview regularly because I believe this is a fantastic way to keep in touch with the market, technologies, the approaches other teams have, and also your financial worth as an employee.

Being hired as an employee in the startup scene often means lowball salaries. So of course, the offers I received were distracting me from my job. They made me wonder if my time would be spent better in other companies.

Don’t I get just as many offers as a freelancer? Indeed I do. But I worry less about those other offers.

I’m booked more than I can take at a competitive rate. I get to choose what I work on and I am 100% focused on it when doing it because it’s my choice to be there. I don’t want to be somewhere else, and the grass is not much greener on the other side. If it was, I’d already be there.

An image of the Facebook login screen - a common distraction for employees
When you rather be elsewhere… Being a “normal distraction” doesn’t make it right.

Don’t worry that a freelancer is downsizing your time to pursue something else.

I would worry more about how focused your employees are day in and day out. A freelancer is capable of running a small business him- or herself and is accustomed to responsibility and accountability. The distractions are also smaller for a freelancer, because they are already doing what interests them.

You actually profit from a freelancer having several clients

Another reason why you don’t need to worry about a freelancer having other clients next to you is that you’ll actually majorly profit from that.

Every freelance professional can tell you how there are always synergies between projects. They learn something new at one project one day and implement it the next day with another client.

The fact that your potential freelancer has other clients next to you means not only that they are a skilled professional in demand, it also means they are learning much quicker.

And your company can definitely profit off of that knowledge!

Misconception 6: ‘We want to keep the knowledge in-house’

Losing the knowledge acquired during a project is another common reason for not hiring a freelancer. Companies worry that a freelancer will leave and no one will know what was learned.

This is a really faulty approach in any case.

First of all, there’s a lot of knowledge that doesn’t even need to be retained. Anything that doesn’t lead to action, isn’t useful. Research and apply the learnings, don’t catalog them away.

Second of all, it’s neither a freelancers’ nor an employees’ task to store knowledge. That’s what analysis and documentation repositories and automated workflows are for.

Using humans as process and technology repositories is simply a sign that your processes and knowledge are not clear enough to be expressed objectively.

Don’t use people to do the work of tools. Use them to drive improvement!

Clear Glass Air Tight Mason Jar Filled With Green Liquid
Storage is for pickles. Brains are for processing.

Freelancers are perfect for driving improvement

Most employees who stay in one role for a long time, stagnate. They don’t see new things and have no reason to improve beyond the demands of the role. They will retain knowledge, but not drive improvement.

Freelancers, on the other hand, are constantly in touch with the market. They are brought in to improve things. It’s their jam!

So if you use a data freelancer for R&D, you still retain the research – but save the time of discovering it yourself. In some cases, a freelancer might not even have to R&D your particular topic, as chances are they already bring a lot from former projects.

In conclusion: Don’t lose out on good talent

Are freelancers the perfect fit for any situation? Probably not.

But the contract type or common misconceptions about freelancers should never stop you from hiring good talent that is worth it for your company.

If at this point you’re still not sure if a data freelancer is the right choice for your particular case, don’t hesitate to drop me a line through my contact form. I’ll be happy to help.

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