Using Freelancers As Interim Permanent Hires


A guide to bridging the productivity gap with a freelancer

The REC tells us it takes 68 days on average to hire a permanent member of staff. Taking out the weekends, this equates to around three and half months. You can easily add another four weeks while you wait for the employee to go through their induction and start to deliver results.

That's roughly five months in total. Five months is a long time to wait for a permanent hire to start. Let's explore the cost of that down time and how to use freelancers to bridge the resulting productivity gap.

Using Freelancers As Interim Permanent Hires

The reasons for the permanent hire lag

There are a number of factors that cause the huge delay in getting a permanent member of staff productive:

The reasons for the productivity gap

The business case

The first delay is the decision making process. Hiring a permanent member of staff should not be a decision made lightly. This business case takes time to put together and sign-off. For larger businesses, this process is complicated further by additional stakeholders needing to approve the creation of the new position.

Advertising

After the sign off, the position needs advertising to internal and external candidates. Most vacancies will be advertised for at least 30 days.

Interviewing

Coordinating calendars between 2 or 3 candidates and an interview panel over 3 rounds of interviews is not a simple task! The interviewing process can easily take a fortnight.

Notice Period

The UK statutory redundancy notice periods are:

However, it's extremely common to have up to 3 month notice periods as standard on senior or important roles.

Onboarding

A new employee usually has at least a fortnight of inductions and training sessions to attend before they even start learning the ropes. Then they need to establish a working relationship with their colleagues and get to understand their new working processes and systems.

Freelancing time to hire: A comparison

In comparison, it takes between 1 and 3 days to hire and onboard a freelancer. This can easily decrease to a few hours when Talent Pools are used correctly.

A comparison of the time to hire a freelancer vs a permanent employee

How is hiring a freelancer so much quicker?

Freelance marketplaces effectively reduce the time to find a freelancer. In most cases projects receive high quality, relevant applications in minutes. A professional, experienced freelancer is also more adept at getting up to productive speed. And they can also bypass the usual internal induction sessions.


The cost of the productivity gap

The REC estimate the average cost of having an unfilled vacancy is £285 per day. This means the five month productivity gap costs a business £5,700 on average.

It's easy to see how these costs can stack up, and could be significantly more:


Bridging the productivity gap with freelancers

Hiring a freelancer is an extremely quick, effective solution for resourcing most projects, but there are some considerations before hiring a freelancer in an interim position:

Is it cheaper to wait?

There's a simple and a not-so-simple answer to this question. Let's start with the simple.

There are projects where you cannot afford to wait. In highly competitive fast moving industries, if you wait for a key hire to start before you begin working on a new product or development, you'll never survive. Your competitors will leave you behind and you'll never catch up. In other words, you need an interim freelancer in place as soon as possible.

For all other scenarios, the answer isn't as straight-forward and needs some consideration.

First, you need to establish how much the productivity gap is going to cost you.

Formula to work out the cost of the productivity gap

Here's an example scenario.

You work for an ecommerce business selling red widgets. You have hired a new developer to improve your checkout process. The new hire will join you in 3 months, and they are going to help you hit your targets of increasing revenue by £5,000 a month and reducing the cost of inaccurate order fulfilment by £1,000 a month. There is also added pressure on your new hire because, if you don't hit your targets, you're going to need to spend an extra £10,000 on advertising to sell your stock.

To save you getting out a calculator, in the above scenario, the cost of your productivity gap is roughly £28,000 over the 3 months. About £310 a day.

If you can hire an expert freelance developer to produce results for less than £310 a day, it is financially viable and you should proceed with an interim freelancer.

Does the role suit a freelancer?

Assuming it makes sense financially to hire an interim freelancer, the next thing to consider is whether the role suits a freelancer.

There are two factors when considering the suitability of a freelancer for the role:

1) Practicality

Projects that do not require the worker to be in a specific location or working between set hours fit freelancers the best. Read this guide on outsourcing tasks to a freelancer for more information about the roles that suit remote freelancers.

2) IR35

IR35 is legislation designed to combat workers who fraudulently claim to be contractors for tax benefits, therefore, it's important that you are IR35 compliant.

It's essential that, for tax purposes, the freelancer is considered to be genuinely self-employed and not, to all intents and purposes, an employee, otherwise, you and the freelancer will be liable to pay the respective tax and national insurance due (and you may incur penalties).

With IR35 in mind, you may decide against using an interim freelancer if the freelancer is required to manage your staff or control a budget or other financial responsibilities. Use this calculator to assess your freelancer's IR35 risk.


Where to use an interim freelancer

In general, freelancers are an ideal interim solution for two types of project:

1) Projects to add value or complete business critical tasks

As shown above, there are projects that simply can't wait for five months before they start. As a freelancer can be hired and in placed in a couple of days, they are a perfectly suited to resourcing urgent projects.

2) Projects to speed up the onboarding of the incoming permanent hire

Another good use of an interim freelancer is help make the permanent hire productive as soon as possible. For example, a new marketing manager will want to review competitor and market research as soon as they start to pull together their strategy. An interim freelancer could conduct all the necessary desk research and produce a suite of reports for the incoming marketing manager.


How to get started with an interim freelancer

In summary, there are real advantages to bridging the productivity gap with interim freelancers. And encouragingly, it's easy to get started:

  1. Scope the project(s) you want the interim freelancer to work on. For more information, read what projects should you outsource to a freelancer.
  2. Write a brief and post the project to a trusted freelance marketplace. For more information, read how to brief a freelancer.
  3. Pick the right freelancer for your interim project. For more information, read how to pick the best freelancer.

Other Resources

When is hiring a freelancer not the right decision?

A freelance marketplace recommending not to hire a freelancer might seem a bit strange. But it's true, there are instances where hiring a freelancer through a marketplace won't make sense.

How to rehire a freelancer

When you find the right person for the job, whether it’s a full time employee or a freelancer, you want to hold on to them. Finding the perfect fit for your project can take time but when it clicks it’s great. Find out how to use them again and again.

Creating and using talent pools

Learn how to create and use talent pools to manage your favourite freelancers and reduce your freelancer recruitment costs.


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