Business leaders, CEOs, and business owners have embraced freelancers all over the world. Remote work has taken root, and companies are realizing its benefits. The top three benefits of working remotely include eliminating commuting, reducing unnecessary meetings, and reducing distractions in the office.
While Freelancers are amazing and add agility to any company’s workforce, their rates can take their toll on the company’s finances. Many people have tried to compare the payment rates of the freelancers to that of the in-house staff. This continues to be an area of debate in the business world.
Common phrases you would hear people say are: they should be cheaper! They’re just doing their work! Why do they charge so much? Oh, I could get it cheaper elsewhere!
Putting emotions aside, let’s look at this more objectively. Businesses and companies set their charges and rates after they’ve done the math on what they spend on taxes, insurance, utility bills, marketing, stationery, and other expenses. And that’s fair enough, but freelancers also have the right to do the same. Freelancers work as independent contractors and earn money on a per task or per project basis.
Freelancer Running Cost
As self-employed individuals, freelancers are responsible for paying the cost of doing business as independent contractors. Some of these costs are:
Equipment
Every freelancer needs a good laptop, good internet service, and good mobile phone service, and these are just the basics to communicate with their clients and get the job done for them.
Taxes
Freelancers pay taxes. As self-employed individuals, the law requires that they pay taxes. In the UK, they would be required to fill out an HMRC assessment form and VAT. You can learn more about how to pay taxes as a freelancer here.
Software
Most clients have different software that they use and require freelancers to learn that software. Interestingly, being provided with the software and learning how to use it doesn’t come along with the skill to use that software, so freelancers have to undergo training on how to be proficient with the software they’ve acquired, which takes time and comes at a cost to the freelancer. Therefore, it’s necessary to remember that they work to make a living as well.
In addition, a freelancer has to take care of:
- Proposals
- Client communication
- Marketing
- Sales
- Finances ( invoices)
- And much more
So when a freelancer set their rates, whether hourly or per project, they would need to factor all the above into account.
Where To Hire Freelancer
With remote working becoming more and more common, hiring freelancers has gotten much easier than you would think. A few sites where you can hire include Fiverr, Upwork, Behance, TaskRabbit, and Hello Savvy. It’s interesting to note that not all freelancers are on these platforms. Some have turned their side hustle into thriving businesses and have their own client onboarding processes. An example is VirtualKarette VA Services. As an Online Business Management service, we have been operating since 2018 and support entrepreneurs from all over the world. We support business owners with the effective management of the day-to-day operational activities involved in running their business so that they can focus their skills and expertise on growing.
Advantages of Working With a Freelancer
- Access to Top Talent: Freelancers are highly specialized in their skill sets. With most of them having decades of experience in their field. This would mean better quality work is delivered. Because freelancers thrive on repeat and referral clients, they have more incentive to work more efficiently.
- No long Commitment: Working with a freelancer can be based on a project, hourly or on a needed basis. Compared to having an employee, the contract can be ended at any time as agreed by both parties. Although this is the case with hiring most freelancers, you can hire a freelancer for a longer period depending on your needs.
- Flexibility in schedule: Freelancers have flexible schedules and you can hire them just when you need a task completed within specific deadlines.
- Cost Effective: the actual cost of hiring an employee is more than the average business owner realizes. When working with a freelancer, they charge you based on the work done. It can be hourly or project-based. So working with a freelancer can save your business a lot of money.
- A Large Talent Pool to pick from: There is a wide range of freelancers to pick from for any role you are looking to hire for.
Conclusion
Hiring a freelancer is inherently cheaper than salaried workers. Although it might be a little higher than what someone on your job salary might charge for the entire project duration. Freelancers don’t need the costs and resources required for training and onboarding. No sick pay, vacation pay, medical, dental, or other benefits are required.
Though you might pay a premium amount for a freelancer with in-demand skills, you will likely get more out of your money working with a freelancer.
