Employers warned of risks posed by hiring freelancers

Administration issues are one.

The number of people choosing to freelance is rising, as workers and businesses realise the benefits of contracting, says recruiting experts Hays in the latest edition of the Hays Journal.

There are many advantages to freelancing, for both employees and employers alike. An increasing number of workers are opting to freelance rather than take on permanent roles due to the flexibility it offers, while businesses are attracted by the same flexibility.

“Freelancing is a very attractive option for many workers with key skills in demand. Moving from project to project allows people to be in charge of their own career” says Lynne Roeder, Managing Director for Hays in Singapore.

“Businesses understand the true benefits of a flexible workforce too. It gives them a chance to quickly bring in certain skills only when they need them, whether that's to work on a particular project, to cover annual leave or at times of peak workloads.”

For a business, having freelancers or temp workers on the books means they are able to budget on a project-to-project basis, giving them stronger control over their budgets since they only pay for the hours worked. Utilising the services of a temp or freelancer also ensures that permanent staff are not distracted from their core work.

While there are many benefits to having a flexible workforce, there are some risks that businesses must be aware of before going down the temporary or freelancer route.

“Businesses must remember that when they are making a short-term hire the freelancer may not be engaged with the brand and company's values like a permanent employee is” said Lynne. “That's why we suggest an organisation treats them like any other employee and as part of the team. This ensures you'll form a positive relationship, which helps to make them feel more at home in your business.”

Lynne warns that it may also be necessary to educate permanent staff about what a temporary or freelancer's hourly rate really means. “While a freelancer earns a higher hourly rate, they do not receive paid annual leave, sick leave or benefits.”

Hays also warned that it can be harder to guarantee the standard of work firms will get which mean an element of micromanagement is necessary.

It also adds that there are administration issues too. "For smaller businesses, setting up back office processes such us an accounts payable system can be a headache," it said.

It suggests that all freelancers should be asked to sign a contract to protect intellectual property and stop them approaching a client direction.

Hays also reminds employers their legal obligations towards the freelance contractors they use.