The ultimate guide to managing freelancers in your startup

by Guest
managing freelancers

Launching a startup is a serious undertaking. When it comes to managing your employees, handling freelancers requires a bit of a learning curve.

Stats show that freelance market is taking over the future of employment. Freelancing gives businesses a greater pool of dedicated, flexible laborers to provide high-quality work.

Managing freelancers does not have to be a hassle once you develop the right routine for your company. Let’s take a look at the steps to managing freelancers in your business and making the most out of the freelance labor market.

Does your startup need freelancers?

You have probably already made the decision to hire freelancers. However, if you are still a little skeptical, know that freelancers are almost always beneficial for new businesses.

Every business should hire freelancers, or at least experiment with them. Let’s look at the top pros and cons of hiring a freelancer:


  • Affordability – Keep in mind, freelancers’ base rates are not typically cheaper than the average laborer. However, freelancers eliminate overhead costs of employees and typically provide more time-efficient work.
  • Flexibility – Traditional employees require a certain amount of sacrifice on your part. With freelancers, you can set the required skillset, deadline, budget, and other project-specific criteria, then choose an employee that can fulfill those needs.
  • Variety – Traditional recruitment limits any startup to only employees in a specific area. The internet gives your business the opportunity to mine a diverse market of freelancers with a variety of experience, education, and skill.


  • More Risk – Nothing on the Internet is guaranteed. Although you will be safe 99% of the time when you choose a freelancer with consideration and thorough inspection, hiring freelancers is always more risky than traditional employment.
  • Less Security – Freelance employment may, in fact, be too flexible. Even if there has been an established trust between you and a freelance employee, they can disappear right when you need a project done. Though, most freelancers depend on client satisfaction and reviews to win jobs.
  • Less Loyalty – Your business is not the only client your freelancer has; they will work for others as well. Traditional employees typically come with a greater level of loyalty and trust than freelancers do—key elements when developing a lasting business structure. However, freelancers often bring additional skills to the table.

If you think the advantages outweigh the drawbacks, then you are in the same boat as many startups in this era. Freelancers make everything easier: from social media marketing to software development to event management.

Phase #1: Recruitment

Where to find freelancers

Popular Freelancer Recruitment Platforms

Before searching for freelancers, define your project and what you are looking for. Identify where your startup needs freelancers, and factor in your budget and time allowance for managing freelancers.

Next, create a project description that thoroughly outlines the job responsibilities and answers the following questions:

  • What is the project deadline or is the job ongoing?
  • What is your budget (either hourly, daily, or for the whole project)?
  • How many hours can the freelancer expect to spend on this project?
  • How many freelancers are you looking to hire?
  • What qualifications (education, experience, skills, etc.) are you looking for?
  • What qualifications are non-negotiable?

The most popular freelance recruitment websites and apps are as follows:

  1. LinkedIn Profinder
  2. Craigslist
  3. Fiverr
  4. Upwork
  5. Freelancer
  6. PeoplePerHour
  7. 99designs
  8. Toptal
  9. Simply Hired
  10. Guru
  11. CodementorX

If you have done any basic research in hiring freelancers, you have probably seen this list before. The real concern is deciphering which platforms your business should use and how you should use them.

Your niche will be an influential factor in which websites you will want to focus on. If you are looking for design-based labor, 99designs will obviously be a good fit. If you are looking for more regional labor, Craigslist will give you more success than other platforms.

At the end of the day, experimentation is the best way to choose where to spend your time. With each platform, consider your success rates. Where do you receive the most bids? Where do you find the most qualified and dedicated freelancers?

Most likely, your freelancing needs will grow, and projects will come and go in your business. Use these opportunities to experiment with various freelance platforms. Beyond this, personal preference may affect how your company recruits new freelancers.

Other ways to find freelancers

Most businesses prefer hiring freelancers through recruitment websites; however, startups can take advantage of other options, too.

Social media humanizes the recruitment process. Search specific social media groups to find freelancers or post a relevant job. For example, a video production group on Facebook would be a great place to search for a local freelance videographer.

You may find freelancers in your local community, as well. Check local bulletins, such as, newspapers, and colleges. Local recruitment resources are typically less successful, though, as they significantly narrow your market.

Choosing freelancers

Most freelancers have a vast skillset, so do not rule out candidates just because their main credential is different than your project description.

Finding qualified applicants is different than choosing which freelancers to hire. Narrow down your choice with these factors:

  1. Reviews
  2. Work samples
  3. Experience
  4. Social media

Always check freelancers’ reviews on the website where you found them. For the most part, no competent freelancer should have reason to receive less than a three-star review. Anything less should raise red flags. In fact, most good freelancers will have a four- or five-star profile.

Most platforms give freelancers the opportunity to exhibit their previous work. Work samples are straightforward indications of whether or not a freelancer has the skills you are looking for.

Freelancer websites will also commonly display freelancers’ experience levels according to the number of completed projects. Experience ranking provides more security when choosing a freelancer; however, don’t overlook qualified freelancers just because they lack experience.

Social media is another resourceful tool for verifying your recruitment choices. Serious freelancers will provide links to their Facebook or LinkedIn accounts on their profiles or job applications.

Social media verification is not mandatory, but it is certainly helpful when looking for professional and accomplished workers.

Phase #2: Tracking time

time tracking

Once you have recruited the best of the best, the next step in managing freelancers is tracking the work they perform. The Internet is filled with a plethora of time-tracking websites and apps for freelancers.

Time-tracking software is not completely flawless, but the technology improves every day to provide effective and efficient means to oversee your freelancers.

The most popular choices in time-tracking apps for freelancer teams include:

  1. Toggl
  2. RescueTime
  3. Harvest
  4. Hubstaff
  5. Time Doctor
  6. Timely

Many employers fear that time-tracking software can only track the quantity of work and not the quality. Although this is true to an extent, most software include activity logs and screenshots to ensure employers know what their freelancers are up to.

Time-tracking is essential to determine a freelancer’s wage. However, every job is different. Some jobs, such as blogging, work well with automatic time-tracking apps and screenshots, while other labor, such as contracting, may require manual time entry.

If a time-tracking app is not working for you and your team, experiment with other alternatives. Many independent workers will also track their own time through their own software, so purchasing team time tracking software may not be necessary in every situation.

When working with new freelancers, check how long it takes them to perform certain tasks. If you find a freelancer is being particularly inefficient with his time, you may want to search the market for one who can do the same amount of work in less time.

Phase #3: Communication

In almost every situation, you should be communicating with your freelancers throughout the duration of the project. Check that they are on schedule and show them that you are watching their work.

Communication is essential to managing a project and building trust between you and your freelancers. Make sure they are clear on what you expect. Create an open line of communication so they can share their progress and discuss ideas.

Direct communication

Direct communication takes place through methods of private or group messaging. Examples include phone calls, messaging, and emails. This type of contact is inevitable when working with freelancers; however, the means of such conversation is up to you.

Direct communication with your freelancers begins when you recruit them. Most freelancer recruitment websites implement direct messaging on their platforms. Many of the freelancing sites now offer video chats as well.

Skype or other facetime platforms are often used for interviews during the recruitment process, as they offer the hassle-free way to chat with freelancers outside of recruitment platforms.

You can begin your communication on freelancing platforms then expand to other methods, or you can communicate through these websites and apps for the duration of the project. However, the first option is most common with sizable projects.

With most projects, you will also want to know your freelancer’s email address. Email isn’t great for chatting, but it is good for sending larger files.

Freelancers may share their phone numbers on some platforms, such as Craigslist, especially for local jobs. However, if you are selecting freelancers from a global market, phone calls or text messages are usually not the most effective way to communicate.

Indirect communication

Indirect communication may be established once you recruit a freelancer or form a project team. This type of communication conveys information without always facilitating a two-way conversation.

Examples include freelancers attaching notes to their timesheets stating what they were doing each hour, or an employer writing out a task to a freelancer with instructions on how to complete a task.

In the freelancing community, the most common forms of indirect communication include task management platforms. Task management is different than time tracking, though some platforms incorporate both.

Effective task and project management platforms for managing freelancers include:

  1. Trello
  2. Todoist
  3. Wrike
  4. MeisterTask
  5. TrackingTime
  6. Lighthouse
  7. OpenProject

Time-tracking and payment platforms also offer notes and memos for indirect communication. If your freelancer has something to mention about a time log or payment, using the software on which these are performed is the easiest way to keep track of these comments.

Google products, such as Google Docs and Google Sheets, are particularly helpful in managing freelance undertakings. You can create a shared folder, document, or spreadsheet to keep track of practically anything with your freelancers.

If your startup is familiar with social media, then consider using social networking groups for indirect communication. Create groups or circles of your team members on your favorite social network. Then, keep track of projects by posting updates and monitoring discussions.

Phase #4: Payment

how to pay employees

Paying freelancers

Payment via recruitment platforms

As the employer, you choose the payment method for your freelancers. Many freelancers have their own preferences on payment platforms. You may want to be flexible with their requests; however, you are the final decision maker on how they are getting paid.

Most freelancer recruitment platforms allow your business to attach a bank account or PayPal account to your account. This way, you can pay your freelancers with ease.

Many freelancer websites also provide escrows for project transactions. Escrows are third-party financial accounts where employers place their payment before freelancers start working. The funds are then only released once the employer approves the freelancer’s work.

Escrows protect your startup. If a freelancer does not produce quality work, then you don’t have to release the funds. You do not have to worry about freelancers requesting upfront payment and then not living up to your standards.

Other payment options

The most popular platforms for global money transfers are as follows:

  1. Google Wallet
  2. PayPal
  3. Payoneer
  4. Skrill
  5. Payza

PayPal is a household name, making it an easy and effective way to transfer money between you and your freelancers. PayPal is also integrated into most time-tracking software.

Google Wallet is similar to PayPal in its simplicity. As long as your freelancers have a Google account, you can transfer money via Google Wallet.

Other platforms like Payoneer, Skrill, and Payza are all up to personal preference. Some of these may be easier to pay groups of freelancers, while others are easier to pay freelancers on an individual basis.

The main benefit to using PayPal and Google Wallet is that most freelancers already have a PayPal and a Google account. Skrill, Payoneer, and Payza may complicate the transaction process as you encounter freelancers who prefer other transaction methods.

Regional payment platforms are obviously not the best option when working with freelancers from across the world. However, if most of your jobs tackle local projects, then you may benefit from using regional money transfer platforms.

Beyond third-party online payment methods, directly paying your freelancers is possible, though this option is usually less secure and convenient.

If you are working with a local freelancer that you can meet with face-to-face, there is nothing wrong with paying with check or cash. Some freelancers may even carry Square and allow you to pay with a debit card swipe.

However, these options are generally extraneous. Why send a check when you can connect your bank account to a PayPal account? Additionally, startups that do not take advantage of digital trends will diminish their virtual success.

Budgeting for freelancers

One facet of managing freelancers in a startup is budgeting. Freelancers are not dirt cheap. If you intend on hiring adept freelance workers to take on your business’s needs, you will need to keep track of your finances.

Consider setting apart a certain amount or percentage of your profit each month, quarter, or year for freelance labor. This way, you will not go overboard with hiring specialists (yes, freelancing can be addictive).

Freelance work is often more affordable than traditional employment because your company does not have to commit to hiring an entirely new part- or full-time employee.

Make sure you are getting the most out of your money. Do not tolerate mediocre talent. Not every freelancer will go above and beyond to serve your business, but they should minimally provide satisfactory work at fair rates.

Regularly review your budget for freelancers to determine if a shift would be beneficial to the business. Are your freelancers more productive than your regular employees? Where are you spending money when managing freelancers?

Tips on making the most out of the freelance market

Now you know the drill. Managing freelancers is a breeze once you have a routine down. Although freelancing platforms and software will take care of most of the brunt of your labor, these techniques will help sharpen your experience with managing freelancers.

1. Mark freelancers.

Freelancers can and should be reused for future projects. If you had a great experience with a certain freelancer, tell them you want to keep in touch and provide future job opportunities.

On the other hand, if a freelancer contributed subpar labor or was difficult to communicate with, take note to never use their services again. You can mark freelancers by leaving them reviews on their freelancing profiles or social media accounts, but be sure to use constructive criticism to let the freelancer know exactly how they may improve in their future jobs.

2. Use social media.

This tip is pretty self-explanatory, but many employers overlook the benefits of using social networks to scope out the freelance market. For instance, some freelancers are best reached through Facebook or LinkedIn, not Toptal or 99designs.

Social media research may not be as efficient as using freelance recruitment platforms. However, you can find out more about your potential clients on their social media pages and even leave reviews.

3. Reevaluate your startup’s needs.

Freelancers are certainly beneficial, but every startup is different. Instead of taking a static approach to your freelance employment process, continuously reevaluate your needs.

As your business develops, your needs for freelancers versus traditional employees may change. For example, your startup may grow to a point where the most efficient labor option would be to hire a full-time legal consultant instead of a freelancer.

On the other hand, you may find out that your business could really benefit from a webpage design revamp. Instead of tasking one of your existing employees with the daunting task, hire a freelance specialist to yield exceptional work.

4. Hire a freelance recruiter.

Depending on the amount of freelancers you intend to hire and the extent of background research you want to perform, hiring a freelancer to recruit other freelancers may actually save a lot of time.

This may sound unusual, but recruiting potential employees is a simple yet time-consuming task that can easily be delegated to a qualified freelancer.

Once you inform the freelance recruiter of the goals of your business and the qualifications you are looking for in potential hires, it won’t be long before they find you remarkable candidates.

5. Avoid cheap freelancers.

Affordable is not the same as cheap. Be cautious if freelancers are bidding at the low end or below your suggested wage. Very cheap rates are often too good to be true and not an option that would benefit your business.

Although these freelancers are often willing to work for lower pay, their quality of work may not size up to those who ask for a higher pay.

Instead, choose a freelancer that bids a fair price for your project while staying within your budget. This ensures you are hiring a serious and skilled freelancer, all while nourishing the freelance market.

What’s next?

Now you know how to manage your freelancers. You know how to take advantage of the diverse freelance market to hire skilled and dedicated laborers without all the headaches.

Freelancers will bring prosperity to your startup as you cut down on overhead costs and grow your market. If freelance labor does not at first sound like a promising route for your business, I encourage you to take a second look.

Don’t be afraid to take freelance management a step at a time. Follow the guide above, build a routine for managing freelancers in your startup, and start discovering what the freelance labor market has to offer for your startup.

About the Author:

Brenna Clarine is a freelance blogger who loves writing and editing articles on a variety of topics. Besides blogging, her passions include animals, movies, and technology. Check out her work at the Valoso blog, and benefit from her company’s gnarly video production services at Valoso.

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