Why Companies Are Choosing Freelancers Over Full-Time Employees

Why companies are hiring freelancers

These are some of the reasons companies choose to work with freelancers. 

Freelance talent is widely available.

Freelancing has always been a popular work option, but this model exploded in popularity during and after the pandemic. Some professionals freelance as a side hustle, while others freelance full time. Although there are challenges with this type of work, such as income unpredictability and a lack of employee benefits, talented workers are available for project-based work. 

According to Statista, about 64 million people worked as freelancers in 2023, and an estimated 86.5 million will be freelancing by 2027 — more than half the total U.S. workforce. With so many people opting to freelance, companies have a wide range of choices in nearly every field, including freelance web developers, digital marketers and IT workers.  

Freelancing helps businesses access younger workers.

Younger workers are particularly suited to — and inclined to pursue — freelance work. According to Upwork, 52 percent of Gen Zers and 44 percent of millennials report working as freelancers. 

Because significant percentages of younger workers choose the flexibility and independence of freelancing, companies looking to tap into these generations’ talents must at least consider hiring freelancers.

Freelancers are often more productive.

Freelancers typically manage multiple clients. Because of their time-management skills, they tend to be more efficient and productive than their full-time counterparts. They earn money only when actively working on projects, thus motivating them to stay on top of their workload. 

Additionally, freelancers typically work from home, and remote work productivity is often better than in-office productivity because there are no co-worker distractions and time-wasting commutes. Plus, freelancers aren’t usually required to attend productivity-killing meetings. 

Pros of hiring freelancers

Hiring freelancers has benefits and risks. Here are some of the most significant upsides. 

Freelancers bring specialized skills and expertise.

Freelancing offers freedom and flexibility that a traditional 9-to-5 workday can’t provide. Many freelancers are drawn to these benefits, deepening the freelancing talent pool as more people in various fields bring their significant knowledge and expertise to freelancing gigs.

Say your company needs a professional writer for a project. Hiring a full-time writer wouldn’t make sense; your writing needs don’t justify a full-time employee. It would be expensive and a waste of company money. However, a freelancer would fit the bill perfectly. The company could find a freelancer with the precise skills needed for that project and then amicably part ways after the project’s completion. 

Hiring freelancers is cost-effective.

Companies that hire full-time employees must provide employee benefits, including health insurance, paid time off and sick leave. In contrast, freelancers are not part of any company’s permanent staff, so employers don’t have to provide them with benefits.

When freelancers are hired for projects, companies can spend less because they pay the freelancer only for their services. This is one of the most popular reasons organizations are turning to freelancers. 

Freelancers are ideal for project-based work.

Not all projects and tasks require full-time or part-time employees. Many projects are one-off assignments with various start and end times throughout the year. These projects may require completely different skill sets, so hiring one person to complete them doesn’t make sense. You may hire someone who has a specific skill set for one project but will not be able to help on the next one. 

Freelancers shine in project-based work. They’re constantly expanding their skill sets to keep up with industry trends. Even more importantly, they bring specific skills. You may need a graphic designer for one project and an app developer for another. Quality freelancing professionals can meet your needs as they evolve. 

Freelancers don’t need office space or equipment.

Most freelancers work from home, so companies don’t have to pay for additional office space needs for these workers or provide them with computers, desks, chairs and office supplies. These savings can add up significantly. 

Freelancers give businesses hiring flexibility.

Freelancers give companies the flexibility to hire and downsize as needed. This agility makes it easy to quickly ramp up to meet demand or cut expenses as needed. 

Additionally, freelancers don’t usually need extensive training or onboarding and don’t require a severance package when they’re no longer needed.

Freelance workers can be hired quickly and are often able and willing to put in extensive hours, even on nights and weekends, to complete a project by an agreed-upon deadline.

Cons of hiring freelancers

Although many benefits come with hiring freelancers, there are also some downsides. 

There’s no formal structure with freelancing.

Freelancers can work from home or anywhere with an internet connection. They’re not typically attached to a formal structure. This lack of formality may backfire when there’s no contract between a business and a freelancer because there’s no guarantee that the freelancer will complete a project. 

In the worst-case scenario, a freelancer can disappear in the middle of an assignment. Although you can replace a freelancer, an abandoned project brings untold headaches. 

There’s no quality assurance with freelancing.

Other freelancing risks include missed deadlines and low-quality work. Regardless of how much effort you put into finding the ideal freelancer, they may not meet your expectations. Even if they see a project through, they may submit subpar work and miss crucial milestones. 

To avoid poor work output, it’s essential to vet your freelancers. Verify their references, and consider using them on a trial basis before you assign larger projects.

Freelancers may work on multiple projects.

Freelancers often can’t depend on one client as a source of stable income. They often have multiple clients, which means numerous projects and potentially conflicting deadlines. 

You may have to deal with slow progress and a split focus. A freelancer may be unavailable when you need to discuss a project element, or they may move your project to the bottom of their priority list.  

It can take time to find the right freelancer.

Finding the right freelancer with the necessary skills for a specific project can take time. An intensive freelancer interview and vetting process may not suit a business with an urgent project that requires a fast turnaround. 

When to hire freelancers over full-time employees

In specific situations, freelancers or full-time employees will benefit the company more. Here’s how to choose.

You should hire freelancers over full-time employees if …

• You have a project with a limited scope. If the task is one-time or occasional, you don’t need a full-time employee. For example, a freelancer is ideal for creating a logo or conducting periodic website updates.
• You need a highly specialized skill set. Hiring highly skilled, full-time employees can be costly. However, hiring them on a freelance basis may be doable. Marcia Layton Turner, executive director and founder of the Association of Ghostwriters, emphasized that highly skilled freelancers are a valuable resource. “With freelancers, businesses can tap into the expertise and skills of a seasoned professional (who often costs more) without a long-term commitment,” Layton said. “This can be especially valuable to startups and smaller organizations that can’t afford to hire an employee.”
• You need scalability and flexibility. Hiring a freelancer allows you to rapidly scale up or down according to your needs.
• You’re testing a new initiative. When you launch a new product or service, you may not want to commit to hiring full-time employees until the concept is proven.

You should not hire freelancers over full-time employees if …

• You need a specific task performed daily. Hiring an employee to perform daily tasks is more cost-efficient than relying on a freelancer. For example, managing an active blog or multiple social media accounts is a continuous responsibility. In such cases, hiring a digital marketing expert or social media manager to work full time would ensure consistency.
• The job is central to your business. Full-time employees provide better support when a role is integral to your business. For example, software companies typically employ their own programmers instead of relying on outside resources because they need in-depth system knowledge and immediate availability.
• You require discretion. If your business deals with proprietary knowledge, confidential information or innovative projects, hiring full-time employees helps safeguard sensitive data.
• You want a team steeped in the company culture. Justina Raskauskiene, human resource team lead at Omnisend, emphasized that even the most aligned freelancer can’t truly become part of your company culture. “Freelancers aren’t ideal for roles that require a deep understanding of company culture or continuous brand learning,” Raskauskiene said, “[especially in areas like] HR, where handling sensitive employee matters requires trust.” Full-time employees are more likely to embody and promote your company’s values and contribute to a cohesive work environment, whereas freelancers might not have the same level of immersion.

How to find and hire freelancers

Numerous resources and best practices can help you find freelancers who are ideal for your needs. Consider the following tips: 

• Ask for freelancer referrals. Industry connections may have excellent freelancers they can recommend. Their referrals can save you time and hassle.
• Browse Upwork for freelancers. Upwork is a major freelancing site with over 18 million freelancers. You can see examples of work, search for specific skills, view hourly rates and ask freelancers questions.
• Access specialized freelancing sites. Specialized freelancing websites are filled with qualified professionals with specific skills and talents. For example, you can find freelance content writers on Scripted or television producers on The Mandy Network.
• Post on job boards. In addition to listing full-time and part-time positions, most job boards let companies post jobs for freelance and contract work. Post your opportunity, and let freelancers come to you.

Freelancers can help you grow your business

In the past, freelancers were seen as inferior to full-time workers. However, this mindset has shifted, affording qualified professional freelancers the respect and opportunities they deserve. Businesses understand that freelancers can be valuable additions to their teams while saving them money and helping them execute skills-based projects. 

While hiring freelancers has advantages and disadvantages, these professionals can help grow your business and strengthen your reputation. Just be sure to find the right freelancers to include on your team.