The rise of the freelancer-based business model

Imagine only paying your employees for completed tasks. In a normal office where staff work at, say, R50 per hour, averaging about (let’s be honest) 5 hours’ actual work in a day, how much different would business be?

You’d pay them about R1,250 a week, and that’s if there’s enough work to go around. In that theoretical setting, do you think productivity would increase? Will they start marketing your business proactively to ensure that they earn enough to cover their own living expenses? Would you save and make more money?

In recent years more businesses are using freelancers instead of permanent employees – for everything from menial scheduling tasks to marketing, as well as those jobs that require specialist attention.

A recent poll by the UK’s Guardian newspaper indicated that 79% of UK small businesses relied on freelancers as a big part of their business strategy. Many of these freelancers are hired to work on creative projects, such as website design, graphic design or copywriting, or as project managers.

In South Africa the outsourcing model is as yet slightly different, with foreign skills imported often into big corporate environments to help mitigate an existing skills shortage, or with entire departments outsourced to off-shore companies to cut costs. But there is a growing business element attracted to the benefits of hiring freelancers.

Why hire a freelancer?

Scalability

Freelance contractors are hired to deliver a specific skill set for the duration of a single project. This allows the business to scale its main workforce according to requirement on a per-project basis.

With less pressure to procure sizeable projects to cover the costs often associated with an entire contingent of permanent staff, and with no actual training costs, since most freelancers are equipped with the necessary experience, the business has more freedom to choose a project suited to its overall strategy, and the opportunity to diversify its own marketable services.

Reduced Costs

Related is the reduced long-term cost of working with freelancers, compared to an office full of permanent employees. Less red tape, no compulsory employee benefits, and  a near-total elimination of in-house training obligations create a profitable business environment in a country where businesses face rapidly rising operational costs.

Broadly speaking, this also helps the business offer higher quality services with less overhead costs, improving its own competitive advantage, and positioning itself better for future growth.

But there are some pitfalls

Of course, there are certain risks that’ll have to be kept in mind when freelancers are brought in.

Reliability

Unlike traditional interview models, freelance contractors are usually hired based on a digital profile or portfolio, and a telephone or virtual interview. What they present you with in terms of portfolio items, references, or achievements often exclude past failures which might be more than relevant to your business, or the project you’re working on.

Also keep in mind that there is no probationary period which can be used to judge the suitability of a particular freelancer. Hiring the wrong freelancer can be expensive.

High Initial Costs 

While freelancers might prove to be more economical in the long-run, their hourly rates can be up to four times those of experienced permanent staff. A high initial expenditure is therefore only suitable for those businesses with some form of capital reserve. And just in case you’re thinking of trying to negotiate a profit-sharing type deal with a freelancer, don’t bother – those with the experience you want will more likely settle for a cash deposit straight into their bank accounts, thank you very much.

That being said, it might seem that hiring freelancers is akin to a game of Russian roulette. Yet while the dangers are there, an increasing number of companies are making it their business to find and outsource freelancers to other businesses. They vet the freelancer and take all associated risks while you get the manpower needed to get the projected completed on time, and according to the highest standards.

Bangula’s diverse database of tried and tested language and creative freelancers ensure that we can scale our workforce to our clients’ requirements. Due to very low overhead costs we are able to offer our services at highly competitive rates without compromising the quality of work we deliver.


Alt: Read more about our services, or get in touch with your freelance requirements.

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