How to Hire Online Freelancers without Losing Your Sanity

Most outsourced projects fail, or at the very least businesses settle for “good enough” out of business necessity. I talked about this in-depth in my essay on why most outsourced projects fail. I’ve seen it first hand. I’ve seen it with friends. Clients. Business partners. You name it.

But, remote work is the future. It’s an industry poised to reach $46 billion in revenue by 2020. And although I’ve been highly critical of the current state of the freelance marketplace, it’s not because of Upwork or any other freelance marketplace – it’s how businesses and freelancers utilize the platform. Many want to outsource overseas to save money, but the age old adage remains true, “If you pay peanuts, you get monkeys.”

Before jumping into the step-by-step guide to hiring on Elance, I want you to think about two things very carefully – these two concepts could save you a ton of $$$ and headache.

Think less about saving money, and more about gaining access to talent across the world.

how to hire on elance

Businesses tend to think money first, as a matter of fact the #1 reason for companies to outsource was to “reduce operating costs”. And that’s perfectly fine for rudimentary tasks such as data entry, bookkeeping, etc. But when the task requires more creativity, it’s tough to find $100k talent at $10/hr.

Think less about price and more about value.  

If you’re hiring a marketing consultant, hire the guy who can clearly articulate how he could help you generate a return on investment. Perhaps with experience and case studies in your industry. Sure you could take a shot at the fresh out of college marketing major, or the $8/hr “Marketing Guru” from India but I’ve found that the latter options are typically a little more liberal with their hours. You don’t want to pay someone to twiddle their thumbs – you want results.

How to Hire on “A” Players on Freelance Websites

First off, feel free to use Upwork, Freelancer, Guru or any other platform as the same concepts will more or less apply. We know that Upwork is the biggest, due to the merger with Elance and oDesk. And that’s where I would tend to point people for most projects, but before signing up checkout our post on the 10 Most Popular Things to Outsource and Where to Outsource It. For a TL;DR the simplest tasks you should check Fiverr first where most jobs start at $5 (see our favorite business gigs). For design related tasks, I’d venture towards the crowdsourced market (here we compared the biggest players – 99designs, DesignCrowd and CrowdSpring). For programming and software development, you don’t just want things done – you want things done right, which is why I prefer TopTal, a company that works with the top 3% of talent. And then for most other projects Upwork unquestionably has the biggest pool of freelancers to choose from.

Whatever platform you decide on, I’d recommend sticking with it and building a reputation on there because prospecting freelancers can looks at profiles for insights on your hiring rate %, feedback and how much you’re willing to spend. I’ve been on both sides of the table and anyone with a low hiring % and/or looking for < $10/hr workers won’t even get my attention. After you’ve signed up, one of the most important considerations is:

1. Razor Concise Job Description. 

Don’t use the template job descriptions Elance offers. Template job descriptions attract template cover letters (we’ll see why this is bad in step 2, “The Brown M&M Technique”). If you truly need a little inspiration scope out your competitors, or companies that you admire for job descriptions. In any case, make sure your description is razor concise and describes exactly what you need. Here’s an example from a job description that led to a successful project (also mentioned in How to Outsource Web Development):

We are hiring a Ruby on Rails developer to create a web application. Applicants will first be asked to complete version 1.0 of the website, estimated budget for this phase is $1000. We will likely hire multiple candidates for this phase to find the best developer. The chosen developer will be asked to complete the rest of the project. Does this make sense? If not, let me know.

The requirements for version 1.0 are as follows:

[redacted]

Few things on note:

  • “Ruby on Rails”: I knew exactly what technology I would be building on
  • “Applicants will first be asked to complete version 1.0 of the website”: Even beyond any interview coding tests, you’ll want to make sure that the web developer has the talent to complete the first version of your website.
  • “Estimated budget for this phase is $1000″: I much prefer a fixed rate vs hourly rate – you want to pay for value, not time (more details later).
  • “We will likely hire multiple candidates”: Even if you don’t have the budget to do so, even mentioning it can weed out low level talent.

I continued the job description with a section on the ideal candidate:

The Ideal Candidate:

– Write beginner friendly, clean, modular, robust code to implement the desired requirements with little or no supervision. I ask for “beginner friendly” because I am attempting to learn RoR without any previous programming experience (good luck, I know). Comments should be used to give background information or annotate difficult code.
– Strong communication skills, proficient with English, and comfortable speaking on Skype.
– Required Programming Languages: Ruby on Rails, HTML, CSS, and Javascript.
– Do you have any open source projects? Please provide links.
– Do you contribute to the Rails community? Personal blog? Participate in Q&A? Please provide links.
– References – What other startups have you worked with?

Few things of note:

  • “Strong communication skills”: No exceptions. Tim Ferriss emphasized this in the outsourcing section in The 4-Hour Workweek and I agree. Language barriers can lead to catastrophic errors. Don’t make that mistake. Interview your candidates over Skype to ensure that communication won’t be an issue (among other things).
  • “Open source projects?… Contribute to the Rails community?”:  I’ve found that people who find a way to give back are easiest to work with, and are a little more flexible with billable hours. Plus, I’m looking for someone a little like me and I look for a person who contributes much like I do with the marketing community.
  • “References?”: References are so under utilized online, especially since I’ve seen quite a few people throw projects in their portfolio that don’t belong to them. One of the biggest things you can do is ask for a reference, and then send that person a quick email. As a freelancer, your best salespeople should be your clients.

2. Finish your job description with “The Brown M&M Technique.”

I use this technique in every job description, and it’s proven time and time again that over 50% of applicants don’t actually read your job description. Instead they opt to use the same copy and pasted cover letter that spam every listing with. These are the applicants you want to avoid. What’s the technique?

In his latest bestseller, The Checklist Manifesto: How to Get Things Right, Atul Gawande highlights David Lee Roth’s weird obsession with Brown M&M’s (and it’s not how they tasted):

Listening to the radio, I heard the story behind rocker David Lee Roth’s notorious insistence that Van Halen’s contracts with concert promoters contain a clause specifying that a bowl of M&M’s has to be provided backstage, but with every single brown candy removed, upon pain of forfeiture of the show, with full compensation to the band. And at least once, Van Halen followed through, peremptorily canceling a show in Colorado when Roth found some brown M&M’s in his dressing room. This turned out to be, however, not another example of the insane demands of power-mad celebrities but an ingenious ruse.

As Roth explained in his memoir, Crazy from the Heat, “Van Halen was the first band to take huge productions into tertiary, third level markets.

We’d pull up with nine 18-wheeler trucks, full of gear, where the standard was three trucks, max. And there were many, many technical errors — whether it was the girders couldn’t support the weight, or the flooring would sink in, or the doors weren’t big enough to move the gear through. The contract rider read like a version of the Chinese Yellow Pages because there was so much equipment, and so many human beings to make it function.” So just as a little test, buried somewhere in the middle of the rider, would be article 126, the no-brown-M&M’s clause. “When I would walk backstage, if I saw a brown M&M in that bowl,” he wrote, “well, we’d line-check the entire production. Guaranteed you’re going to arrive at a technical error… Guaranteed you’d run into a problem.” These weren’t trifles, the radio story pointed out. The mistakes could be life-threatening. In Colorado, the band found the local promoters had failed to read the weight requirements and the staging would have fallen through the arena.

Implementing that same concept, this was the last line in the Ruby on Rails job listing:


VERY IMPORTANT: To separate you from the spammers, please write I AM REAL as the first line of your bid. We will delete all bids that do not start with this phrase, since most bidders never read the requirements. Thank you for being one who does.

You’d be shocked with how many people don’t actually read your job description – even the most successful freelancers on Upwork tend to skim the details.


3. Price: Fixed vs Hourly

Remember, think about value, not price. You want to pay for results, and that’s why I tend to lean toward milestone based fixed pricing. If you’re building a web or mobile app, think about releasing payment as new features are successfully added. If you’re adding a writer, think about getting a fixed price for the article. If you just want a logo design, negotiate a fixed price for 3 samples.

Hourly pricing has it’s advantages as well though, especially with Upwork’s Work View software that takes screenshots at random intervals for your review to ensure that they’re working. It takes away some of that angst from businesses wondering, “Are my remote workers actually working?”

Either way, Upwork’s payment protection covers both scenarios.

4. Submitting your job and inviting candidates

Once you’ve nailed down the details, you can go ahead and post your job. If you’re new, I’d recommend verifying a payment method so freelancers know you’re serious (there’s no commitment to hire or pay anything).

Invite Freelancers – One of the biggest mistakes I made was opting to let the proposals come in instead of taking 10 minutes and find freelancers that would be perfect for the position. With over 100k+ active projects on Elance, it’s easy for freelancers to miss a project that’s perfect for them.

5. The Interview and Selection Process

I’m not an HR pro, so I’ll keep this section short and sweet as there’s a lot of better resources out there for how to conduct an interview. Though I will offer a few tips with regards to hiring online:

  • Immediately delete any applicant who didn’t pass your “Brown M&M” Test, or when the cover letter looks copy and pasted. The best candidates submit proposals tailor made for your business.
  • If you’re hiring offshores, just make sure communication won’t be an issue.
  • Be sure to validate their skills, and don’t rely on Elance’s Skills Tests scores listed on their profiles.

And it goes without saying, when selecting a candidate, think about value, not price.

I’ve said this time and time again and I’m sure you’re nodding along at home – but seldom do I really see it implemented.

Think about this.

Let’s say you want to hire a writer. You’ll get 100 applicants, easy. But ask the question, “Do you have a blog that generates over 10,000 hits a month?” And you’ll be lucky to have one qualified candidate – that’s the guy you want.

Let’s say you want to hire a SEO consultant, a lot of them make money selling SEO, but how many actually make money doing SEO for themselves? Think about it. I know this first hand, the best at SEO are better off doing it for themselves. But there are many who have time for side projects… so to find that top talent ask the question, “Do you have a website that earns at least $1k a month through SEO?” Again, candidates like that are rare, Upwork is flooded with snake oil… but there are diamonds in the rough.

These are the types of questions I would have in the job description to weed out the garbage. Then in the interview, that’s where you’ll want to go in-depth.

6. Working with freelancers and last few tips

  • Establish Parkinson’s Law – The law states that “work expands so as to fill the time available for its completion.” In other words, remember the nights in college where you crammed out an entire 8-page essay because it was due 9AM the next morning? That’s Parkinson’s Law in effect. Set deadlines, here’s how Tim Ferriss does it in The 4-Hour Work Week:

Use Parkinson’s Law and assign tasks that are to be completed within no more than 72 hours. I have had the best luck with 48 and 24 hours. This is another compelling reason to use a small group (three or more) rather than a single individual who can become overtaxed with last-minute requests from multiple clients. Using short deadlines does not mean avoiding larger tasks (eg. business plan), but rather breaking them into smaller milestones that can be completed in shorter time frames (outline, competitive research summaries, chapters, etc.).

Lastly, here’s an example Ferriss uses as a well written task email to his VA:

Dear Sowmya,

Thank you. I would like to start with the following task.

TASK: I need to find the names and e-mails of editors of men’s magazines in the US (for example: maxim, stuff, GQ, esquire, blender, etc.) who also have written books. An example of such a person would be AJ Jacobs who is Editor-at-Large of Esquire (www.ajjacobs.com). I already have his information and need more like him.

Can you do this? If not, please advise. Please reply and confirm what you will plan to do to complete this task.

DEADLINE: Since I’m in a rush, get started after your next e-mail and stop at 3 hours and tell me what results you have. Please begin this now if possible. The deadline for these 3 hours and reported results is end-of-day ET Monday.

Thank you for your fastest reply,

Tim

While designed for a VA, these concepts can be applied to nearly any other freelancer. I will note though that the ideal hire is a person you won’t have to micro manage, ie. a person who can handle a little ambiguity and find a way to complete the necessary tasks.

The final tip is that if you’re working with a freelancer on an hourly rate, don’t give him/her a license to waste time. Request status updates and review Elance’s Work View screenshots to ensure that they’re actually working. I’ve worked with a VA in the past that thought they could milk a few hours by making minor progress hour to hour (ie. 5 minutes of work). I fired her immediately.  Integrity is very important with remote workers, and if you notice anything fishy just move on. As the old adage goes, “Hire slow and fire fast.”

Your thoughts on hiring online freelancers? Tips, best practices, etc. Let us know in the comments below!

11 Responses to “How to Hire Online Freelancers without Losing Your Sanity”
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