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The benefits of a remote, freelance team are significant, from less time spent hiring to significant cost reductions. Going remote and freelance can be a great way to get a new business off the ground, but as we’ve observed at SkillHire, it can also be an arrangement that works over the long-term as well. 

In 2022, here are the top 6 benefits that have companies turning to remote, freelance teams:

1. Faster hiring cycles

On average, it takes 49 days to fill a technical role (not to point out the obvious, but this means that half of the time, it takes even longer than that). For many founders working in today’s hypercompetitive tech environment, that’s just too long to wait to get your ideas to market. 

On the other hand, you can hire a freelancer in a matter of days or weeks. There are fewer interviews and internal debates to be had over hiring decisions since you can easily stop doing business with a freelancer and hire someone else if it’s not working out. As freelancers charge set terms (typically a transparent hourly rate), you’ll rarely encounter lengthy employment contract negotiations. 

Finally, you don’t have to go back and forth with recruiters. If you use a platform like SkillHire that matches you with freelancers, you can even eliminate the time you’d spend searching for a qualified person. 

2. Flexible time commitments

Freelancers are, by nature, offering a flexible service. They charge per hour of work, rather than a set salary. They’re open to short-term commitments, like 3–6 months, when you need someone to fill a temporary gap. And there’s no reason that a freelancer isn’t great for a long-term commitment, either — engineers on our platform can end up working with the same company for multiple years if their services are still needed. 

This flexibility lets you scale your business up or down easily to meet product development demand or manage your budget. SkillHire’s data shows that companies can save 40% with flexible hiring. If you have a new idea that’s taking off in the market, you can expand your engineering team quickly (see benefit #1). On the other hand, if you experiment with something that isn’t working out several months later, you aren’t in the position of having to keep running payroll for a team that’s now sitting around with nothing to do. 

3. Hire niche experience, when you need it

Need to implement DevOps processes, perform some data science analysis, or build a version of your app that works on Android? Hiring a freelancer can give you an instant injection of experience in an area that’s not already covered by your team.

This is especially beneficial in today’s hiring market, where it’s become the norm for months to go by before filling a full-time role in a niche area. The New York Times recently estimated that the unemployment rate in tech is 1.7% compared with 4% in the overall population — but for a specialist role like cybersecurity, it’s 0.2%.

4. Large cost savings

Obviously, with a remote team you save on office space and supplies. But with a remote freelance team, you also save in many other ways as well. For one, there’s no upfront recruiting fees, which are usually 20% of a full-time employee’s first year salary. Next, you won’t have to pay for equipment — hardware for engineers and designers can be in the multiple thousands per hire and needs to be updated regularly. 

One of the biggest costs you’ll eliminate is benefits: from 401k to health insurance and paid vacation. Since freelancers only charge for hours worked, you also won’t be covering breaks and time spent on learning and development. And, freelancers typically don’t receive equity in your business, unlike full-time employees. 

5. A client-consultant relationship

Freelancers treat you as a customer, which is inherently a different relationship from being “the boss.” Consider this: “The customer is always right” is a common maxim—while ”the boss is always right” is a laughable idea. 

The freelancer is offering a service in exchange for an hourly rate, not coming to work every day to collect a salary whether they’re productive or not. And while employees may be motivated by the idea of a promotion or the risk of being fired, these are generally far-off and removed possibilities. Freelancers are well aware that securing their next project always hinges on whether you were happy with the last one.   

6. Tax savings

If you hire a freelance team, you will certain save on your taxes. For full-time employees, companies are required to pay Social Security taxes at 6.2% of the salary, up to a $147,000 wage base. They also pay Medicare tax at the rate of 1.45% of gross salary. 

On the other hand, 1099 contractors pay their own taxes. The only thing you’ll have to do is collect a W9 and file a 1099-NEC at the end of the year.

Pro tip: Consider a staffing agency like SkillHire

Given all these benefits, you might be thinking that a remote, freelance time could be right for your business. We’re biased of course, but we’d recommend considering a staffing agency like SkillHire. You’ll find it easier to match with the freelancers that are right for your business — and you’ll be spared the effort of drafting contracts and processing invoices. 

Additionally, you’ll be shielded from certain legal risks, like potentially being liable to pay tax and equity if US and state laws find that the contractor’s work is similar in nature to that of a full-time employee. (Staffing agencies assume these risks so you don’t have to.) 

To learn more about SkillHire, check out our website here.

Step 1: Gather requirements through research

When you’re building a new product, setting your business up for success begins with research. You’ll start by getting curious and asking questions like: Who are my users? What are their needs? And what are my competitors doing?

For instance, imagine that you want to create a way for chefs to offer video classes to people who want to learn how to cook. It would be helpful to conduct a broad set of interviews with your different user roles — in this case, chefs and would-be students — and learn what each of these groups are looking for. You’d also want to investigate competitor sites that offer online experiences. 

Through your research, you’ll develop a list of requirements for your product. Keep in mind that at this point, you aren’t looking to assign priorities or decide what you’re going to build — you’re simply gathering information. It makes sense to group your features by user role. For our example, our list for chefs might include: receiving payments, scheduling classes, and webcam setup. 

Step 2: Create a Product Requirements Document (PRD)

Now that you’ve researched a list of requirements, you can begin the difficult work of paring down your list to just the essentials. In product management, this is called the minimum viable product, or MVP. The idea here is that rather than building all the bells and whistles, you spend time on just your highest-priority features, so you can launch and start collecting user feedback as quickly as possible. 

Prioritization is one of the hardest tasks in product management. It can be helpful to identify the KPIs (key performance indicators) for your business. Returning to the previous example, do we care about the number of chefs that join the platform, or are we more interested in the number of students that sign up for classes? Once you know what’s important, assigning a priority score to each feature becomes easier.

With a list of your MVP features, you’re ready to create your PRD, or product requirements document. While there’s no one “right” way to write a PRD, it’s often useful to make your PRD brief (1–2 pages) and focus on describing the key user journeys. User journeys are the key tasks that people should be able to accomplish in your mobile or web app. For example, the user journeys for a student in our cooking class app might be:

• Creating an account

• Browsing classes

• Searching for a specific class

• Signing up for a class

• Taking a class

• Submitting class feedback

It’s important to ensure you’ve captured the journeys for all user roles (e.g. both chefs and students). Don’t forget that if you have employees who’ll be working with your product, such as customer support, these are also users who’ll need to have their requirements accounted for in your PRD. 

Step 3: Wireframe your MVP

With a list of prioritized requirements in hand, you’re ready to move onto wireframing. Wireframing is the process of visually depicting your user journeys. Along with your PRD, wireframes are the blueprint of your product. They’re a great way to quickly conceptualize your features and help engineers and visual designers understand what to build. 

We recommend starting out with lo-fi (low fidelity) wireframes, for which a variety of tools are available. As your visual design begins to take a more defined shape, it can be helpful to build medium or hi-fidelity wireframes that more closely resemble the finished product. You can even build interactive wireframes that let you click through a series of steps, which can be useful for demoing the desired flow.  

If you have a mobile and desktop product, be sure to create wireframes for both surfaces!

Step 4: Visual design

The next step of the product development process is to create high-fidelity or “pixel perfect” mockups using software like Adobe Illustrator or Figma. Developers will then use these mockups to build your product’s frontend as specified. 

The visual design process will result in two important documents:

1. The visual style guide: The color palette, exact typography, iconography, grid system (spacing and layout), and standard UI components for your app. 

2. Visual designs for the key pages of your app. To ensure that you don’t complicate the engineering effort for your MVP, it’s a good idea to design pages that are mobile-responsive — in other words, the components can easily adjust to support a wide variety of screen sizes, from desktop to mobile devices. 

In future posts, we’ll dive into the details of the visual design process. 

Step 5: Software development 

In modern product development, engineering and design happen somewhat in parallel. Developers don’t need to wait for final visual designs to start working on the different components of your app — software development can typically begin once there is a PRD, wireframes, and a visual style guide. The engineering process can take 3–6 months for an MVP, depending on the scope of your project and the size of your team. 

There’s a lot more to say about the software development process, and we’ll go in-depth in upcoming posts. 

Step 6: Testing 

Before launch, it’s important to ensure your product is stable and doesn’t have any major bugs. As with software development, quality assurance (QA) can start before all the other steps are complete, and should be run continuously throughout the engineering process. QA usually involves a mix of manual and automated testing to ensure that the end-to-end user journeys in the product can be completed without any issues.

Along with testing your product , you’ll also want to expose it to a small number of real, external users for feedback before going public. This user acceptance testing (UAT) tells you whether your product is working from a trusted group of alpha/beta users, before you open it up to a broader audience. 

Step 7: Launch — and iterate!

Once you feel confident that your MVP is stable, you’re ready to go live! But the story doesn’t end here. Based on user feedback, you’ll add features to the next version of your PRD, then update your wireframes and visual designs, then develop the next iteration of your app. That’s how your app continues to evolve and improve — following the same lifecycle of product development.  

Need help building your product? At SkillHire we match you with top freelance developers & designers who can help you build modern, web or mobile applications.

The costs associated with a freelancer vs. full-time 

The first cost to consider when hiring a freelancer is the hourly rate. Unlike employees, Freelancers often charge on an hourly basis and typically the rate they charge is between 1.5–2x what you would pay a full-time employee for equivalent work per hour. Freelancers only charge for the hours that they work, so you won’t be paying for lunch breaks or time spent on learning or professional development. 

Employees, on the other hand, are paid on salary so while the hourly rate is often lower keep in mind that they are being paid for every hour in the office, which includes when there is downtime or lunch breaks.

Benefits and perks

One of the biggest costs associated with full-time employees is benefits. Companies are obligated to provide full-time workers with health insurance, workers’ compensation, disability coverage, and family and medical leave. In addition, companies frequently provide other perks and benefits like paid holidays and vacation, retirement savings programs, gym and wellness reimbursement, and team social events. 

If you hire a freelancer, you won’t pay for any of these benefits or perks.

Taxes

Companies are required to pay taxes on all full-time employees. Employers pay FICA taxes, which includes Social Security taxes at 6.2% of an employee’s gross salary up to the wage base (currently $147,000) and Medicare tax, at the rate of 1.45% of gross salary.

Freelancers are responsible for paying their own taxes, and are similarly taxed a self-employment tax at a rate of 15.3% (12.4% for social security and 2.9% for Medicare).

Stock and equity

Compensation for full-time employees typically includes stock or equity. These grants are beneficial for creating mutual alignment between your business and employees. However, this does require you to relinquish shares of your company. Freelancers, on the other hand, are only paid per their contract and have no long-term stake in the company.

Recruiting fees

Some companies have in-house recruiters, but if you’re working with a third-party, recruiting fees are another cost to keep in mind when hiring. In general, recruiters charge a head-hunting fee of 20% of a candidate’s annual salary, and this cost is paid entirely upfront. This fee is worthwhile if the employee proves to be a long-term, valuable asset to your team. However, if you hire someone who is a poor fit, or the employee leaves within a few months, that recruiting fee is a sunk cost. Staffing agencies for freelancers will also charge a placement fee, but these fees are pay-as-you-go, so you won’t have to bear any large sunk costs for a worker that doesn’t pan out. 

When to hire a freelancer

Although there are a number of costs associated with employing a full-time worker, they are typically more cost-effective over the long term (12 months+) than freelancers. There are numerous other advantages to hiring full-time employees: full-time workers are more aligned with your business, build domain and product knowledge over time, and contribute to company culture and cohesion. However, there are several scenarios in which hiring a freelancer can pay off. 

Speed to hire

One of the top reasons companies hire freelancers is that their business is growing rapidly and they can’t hire full-time employees quickly enough to keep up. The average time to hire a full-time developer is close to 3 months. For comparison, freelancers can usually be hired in 1–3 weeks. If your business needs are urgent (as they often are), you might need to hire freelancers to fill the gap until you can bring on more full-time workers. 

You should also consider the resources required of your existing full-time team to expand. If you need to do an aggressive amount of hiring, your team will have reduced productivity on their projects while they spend more time interviewing candidates and onboarding new team members. A freelancer can help move a project’s key deliverables forward in the interim. 

Short-term or ad-hoc projects

Another reason you might hire a freelancer is if you have a short-term project that only lasts a few months. Hiring a freelancer will boost your team’s capacity temporarily without requiring you to invest in additional headcount for the long term. 

A related scenario is when you have a project that requires a specialized skill set, but doesn’t require full-time attention. You only pay freelancers for the hours that they work, so a freelancer could be a great fit for a project that requires 5–10 hours of work a week. 

Consulting or advising

Finally, you might hire a freelancer to bring in someone in a consulting or advising capacity. Perhaps you have enough employees to meet your business needs, but you’re lacking expertise in some critical area. It can pay off to hire a freelancer to consult on the project and bring your full-time employees up to speed faster than they might learn on their own. 

Competitive pricing abroad

Perhaps your business is in a position where hiring a freelancer makes sense, but you’re still looking to save on costs. One way to do this is to hire a freelancer from abroad. Senior developers in the US can charge very high rates for their services, but you may be able to find skilled freelancers in Canada for 30% less. Developers in South America or Eastern Europe typically bill at ⅓ to ½ of the cost of those in the US. Working with developers in other countries has trade-offs including time zone differences and language barriers. Whether this will be a good fit for you depends on your individual product and business. 

Getting started with a freelancer 

You’ve decided to hire a freelancer, but now you’re not sure how to find the best one for your company. At SkillHire, we work with highly skilled talent in engineering, design, and product based in the US, Canada, and abroad. We send you a curated list of freelancers available for hire and allow you to interview them directly in the app. Cost transparency is central to our business, so you’ll know upfront exactly how much your freelancer will cost. Connect with us here to learn more about how we can help scale your team with top technical talent. 

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