Optimizing relationships with contractors and freelancers

A growing business is a wonderful thing to own, but it does create challenges. Many small business owners are hesitant to increase payroll even as demand for their products or services grows—after all, each new employee means a significant increase in fixed overhead costs. The solution? Hiring freelancers and independent contractors on an as-needed, project basis. In fact, according to Forbes, hiring contractors is becoming more and more common, and there are over 54 million independent workers in the U.S. today. As firms both big and small reach out to freelancers to fill gaps in their talent pool, a recent survey by Addison Group found 88 percent of hiring managers are more comfortable hiring contractors for senior level positions than they were five years ago.

Independent contractors work on a project-by-project basis, taking as many hours as they need to complete a certain task for one set fee or hourly rate. Contractors and freelancers generally use their own equipment, pay their own self-employment tax, buy their own insurance, and work remotely. According to Businessweek Magazine, employers can save up to 30 percent by hiring an independent contractor because they avoid paying payroll taxes, unemployment insurance, workers’ compensation and disability, pensions, sick days, health insurance and vacation time.

If your small business is considering hiring a freelancer, keep a few simple tips in mind to make sure the collaboration is effective.

Outline Clear Project Goals for the Contractor

Whether the project is a website, a product launch, or something as simple as print copy, it is essential for a freelancer to understand a client’s big picture goals for the end product. Take the time to meet in person or via video conference to make sure everyone is on the same page. Be specific. It helps the contractor immeasurably to understand the client’s essential goals.

Your freelancer cannot impress you without this key ingredient. One thing a small business owner can do to be extra clear about project or performance goals is point to completed project she is pleased with and hopes the new hire will emulate. Having a model helps freelancers jump in with more confidence. A corollary to this tip is to spend a little time talking about the target audience for the work, particularly if the deliverable is a piece of media.

Establish Terms Before Work Begins

Before your freelancer begins working, it is essential to discuss the goals of the project and the audience, and then establish clear deliverables and timeline to project completion. Next, the contractor provides the client with a total project fee, which is based on how many hours she thinks the total project will take times her hourly rate.

Talk through how and when the freelancer will submit invoices or timesheets, and exactly how long it will take your company to process them (more than 30 days is too long). Establish a policy for incomplete work, and talk through expectations if project goals are not met by deliverables. Experienced freelancers will have a clear policy regarding redoing work. The last thing you want is to have a project that is half done when a conflict arises over payment or other terms. Make sure terms are in place and a contract is signed by both parties right from the beginning of any collaboration.

Communicate, Communicate, Communicate

Some business owners prefer phone calls; some email. Perhaps your business uses Trello, Slack, or Asana to manage tasks. Any of these methods is fine; the key is making sure your communication channels are open and active. When you hire a contractor, establish how you’ll communicate. You cannot hire a freelancer and then expect him to read your mind. Communicate continuously, even if it means spending more time on email in the beginning of a project than you’d prefer to. It’s better to over-communicate at the beginning of a project than for anyone to have to redo work.

Also, communication is important to build a relationship that will ideally last for years, even when complications arise. Meetings have to be rescheduled from time to time. Flights get canceled. The best working relationships are built on an understanding that we are all human. If both parties make an effort to communicate when there are occasional blips in the road, chances are excellent many exciting projects will come to fruition as the years accumulate.


Clients, when you’re working with a contractor who exceeds expectations and beats deadlines, it’s important to retain her. Make the effort to keep your relationship strong by expressing your appreciation, keeping your freelancer up-to-date on changes to your business, and making her feel like a real part of your operation. Offer bonuses, and try to arrange quarterly in-person meetings if it is feasible.

It’s important to ensure your relationship isn’t just transactional, because talented professionals crave meaning and connection in their work.


By Laura Schaefer

Laura Schaefer is an Orlando-based freelance writer. She is the author of The Teashop Girls and the forthcoming novel Littler Women: A Modern Retelling. In addition to her books, Laura has also written articles for many publications and websites including Match.com, Business.com and Entrepreneur.com. Learn more by visiting lauraschaeferwriter.com or finding her on Twitter: @teashopgirl.

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