Hiring freelancers and contract workers is something that many businesses are seeing as an increasingly viable option. It allows them to hire skilled talent from anywhere in the world, so they don’t have to worry about the limitations of hiring locally.
Hiring freelancers and contractors is also a good way to eliminate most overhead costs.
The following are some specific things to know about saving money when hiring freelancers.
When you work with freelancers and contractors, particularly internationally, one of the biggest things to think about is how you’ll pay them. Wire transfer services are sometimes the route businesses will take, but there are issues with this.
First, there are security issues. Then, there is the fact that contractors and freelancers probably don’t want to wait weeks to receive their payment.
If you want to keep them happy and avoid the risk of fraud, it may be better to use an online transfer service. When choosing a transfer service, read the fine print and ensure the fees aren’t going to create high overhead costs. Some services will offer low rates and no fees when sending more than $1,000 or another specified amount.
It can be worth it to do some research and try to find the lowest cost money transfer service that still gets money to its destination quickly and securely.
Understand Labor Laws
Sometimes you may end up paying a lot more when you hire a freelancer than you planned on because you aren’t clear on labor laws, tax considerations and what a contractor versus an employee really is.
You need to make sure you know exactly what a contractor versus an employee is, both in your own country’s terms and in the country of the worker you’re hiring.
If the home country of the freelancer you’re hiring determines that you’re actually taking on an employer-employee relationship, it could get very expensive to deal with this.
By having a clear upfront understanding, you can save money in the long-term.
Consider Paying Hourly
Finally, when hiring international contractors and freelancers, some businesses are nervous about the idea of paying hourly. They might think that this leaves them with no control over how much they end up paying their contractors.
A lot of businesses find that in reality, quite the opposite is true.
They find that they save money when they pay on an hourly basis as opposed to a fixed rate, because they’re not paying for time contractors aren’t spending on their projects.
Contractors may also be happier with this arrangement because it gives them more freedom and flexibility.
If you’re nervous that paying hourly could quickly get more expensive than what your budget allows for, you can set weekly caps on that.
When you hire a full-time, traditional employee, you’re paying them even when they’re not working. That’s a huge expense for most businesses, and one of the biggest benefits of working with contractors whenever possible. When you pay hourly, you’re taking full advantage of this cost savings.