(Getty Images)
In an uncertain economy, freelancers are a good choice for small businesses that can’t afford or simply don’t need a permanent staff member. Many types of work, from writing to graphic design to bookkeeping, can be done freelance. To find and hire a freelancer who will do quality work for a reasonable cost, the Better Business Bureau recommends the following tips.
How to hire a freelancer:
- Know the difference between an independent contractor and an employee. Knowing the difference is vital since the answer can affect how you withhold taxes. Unlike employees, freelancers are independent contractors who control when and where they work and furnish their equipment and tools. That said, situations vary and should be handled accordingly. You can find more information about differentiating between employees and freelancers in the United States at IRS.gov. In Canada, you can find more information on Canada.ca.
- Research prices and create a budget. The prices freelancers charge for specific projects can vary greatly. Prices depend on factors like where the freelancer lives and how much experience they have. Don’t rush to hire someone who offers the lowest rate. Instead, start by setting a budget and then take your time shopping for a qualified candidate. Ask around if you aren’t sure how much you can expect to pay for a particular service. Most freelancers are willing to discuss your project and give you an estimate for free.
- Create a clear description of the work. To find a freelancer who matches your project well, you must get clear on what you need. Start by writing out what work you need to be completed, your timeline, a description of your business, your budget, and any other pertinent details. A detailed description will help you communicate your needs and expectations.
- Know where to find talented freelancers. Before posting your job online, ask your business network for recommendations. Someone you know may have already found a talented freelancer, which can eliminate much of your search. If that doesn’t work, post your job to a freelance marketplace or job board. Be prepared to receive (and weed through) a lot of emails. Narrow your search by pre-selecting communicative freelancers with the appropriate skill set and can work within your budget.
- Interview potential candidates. Be ready to share information about your needs and be frank about your expectations. It will quickly become apparent if this is a person with whom you will feel comfortable working. These freelancer interview questions from the Society for Human Resource Management (SHRM) are an excellent place to start. If you have a few options and are having trouble choosing, consider offering paid test projects to freelancers you are interested in hiring. It’s a great way to see the person’s work first-hand before committing to a longer-term working relationship.
- Sign a contract. Contracts are especially important, as they provide legal protection for both parties. Contracts should clearly outline the scope of the project, any deadlines you’ve agreed upon when deposits and total payments are due, cancellation policies, and confidentiality requirements. If you need guidance on writing a freelance contract, see these resources from Freelancers Union.
- Get the tax forms right. Before the freelancer begins working in the U.S., have them fill out a W-9 form. This form will request the freelancer's correct name and Taxpayer Identification Number. Keep the W-9 on file for four years in case any questions arise from the worker or IRS. If you paid the freelancer $600 or more by the end of the fiscal year, you need to complete a Form 1099-NEC for nonemployee compensation. You must provide the freelancer and the IRS with a copy of this form by January 31 of the year following payment. For more information on tax forms for independent contractors, see these IRS resources and forms. In Canada, check with the Canadian Revenue Agency.
For more information
See SHRM’s toolkit for hiring an independent contractor, which includes sample agreements and more. To learn more about hiring a freelancer, see the BBB Scam Alert: Hiring freelance help? Watch out for imposters. In Canada, check out this article from the Business Development Bank of Canada for tips and resources for hiring freelancers.
When searching for freelancers online, look to businesses that adhere to the BBB Standards for Trust. Read more about BBB's Accreditation Standards.
Learn how to become a BBB Accredited Business.