OutsourceSurvival.com

This article discusses the different models used by outsource service providers and freelancers. We will talk about the different types, as well as the pro’s and con’s associated with each. These differences can have a major impact on the success of your project, and it’s important that you select the right one for the right situation.

This is part 1 of a 2 part series. You can find ‘Part 2. The 4 Flavours of Outsource Service Providers’ here.

Note: to my North American friends.. I apologis(z)e for the repeated spelling of flavoUr… I just can’t give that up to U

Part 1, The 3 Flavours of a Freelancer.

If you jump onto one of the many outsourcing/freelance websites you could be forgiven for thinking that all outsourcer’s are the same. Sure, there’s an obvious difference between a solo ‘freelancer’ and a company; some have a logo and a website, some don’t. But there are differences that run deeper than that.

Why should you care?

As we’ll discuss, if you want a successful outcome on your project you need to understand who you’re hiring and how they work. This will affect the:

• quality of their work and what they can offer,
• work they can do well, and what they will likely do poorly,
• how they interact with you,
• price they are likely to demand,
• ‘value for money’ that they can offer.

As always, I’ll start with a list, and then describe each in detail. In my descriptions below, I’m talking from my personal experience, and I’m not dealing in absolutes. So you may find someone who has all of these qualities or they may have none. I’ve broken the article into 2 parts, as it was a little on the long side. So here’s the list:

Article Part 1. 3 Flavours of Freelance Providers:

• Type 1: Casual Freelancers
• Type 2: Sleepless Professionals
• Type 3: Fulltime Professionals

Article Part 2. 4 Flavours of Outsource Service Providers:

• Type 1: Specialised Service Providers
• Type 2: Standard Full Service Providers
• Type 3: White Label ‘Full Service’ Middlemen
• Type 4: White Label ‘Hands Off’ Middlemen

Freelancers- General Information

These are independent (usually) skilled professionals. They are self-employed and often have a degree in the area that they are offering. They generally work from home, and practically live online so they are very available. Freelancer’s offer best value in terms of their low price and high degree of skill, and often bid 40-80% lower than full service outsource companies. The work starts and ends with them, so there is no opportunity to buck pass, or delay decisions (‘I just need to talk to X, but he’s not in so I’ll get back to you tomorrow’). The downside is that there are scaling issues for bigger projects, and it can be hard to find the right person for your team.

Below are some general pros and cons for all freelancers:

Pros:

• Low cost
• Potential to build a strong, long lasting relationship
• Can find some outstandingly skilled professionals who will create  a lot of value in your business

Cons:

• Difficult to scale. Not as easy as saying “give me 3 more people on this team, we need this done now!”. You can have the best freelancer in the world, but they only have so many hours in a day.
• Redundancy risk. By relying on a single operator you are at risk if they disappear or are unable to work. Consider the ‘hit by a bus scenario’.
• Skills and commitment are wildly variable
• Communication skills are wildly variable
• Variability in the quality of equipment and internet connection can impact the project
• Freelancers have a general tendency to be more casual in terms of project management. This is lower cost, but higher risk.
• Jack of all trades mentality. Some people claim to be skilled in many more things than they are. Hire freelancers for very specific tasks which they can provide a track record for, to avoid being burnt.

Where do most freelancers come from?

For graphics and technical work they are most commonly hail from developing nations including India, Pakistan, Russia, and Croatia. China seems to be an emerging force, I have noticed a marked increase in providers from there. You also get them from developed nations, predominately from the US.

For technical writing in English, such as sales letters, ebooks, and articles, developed nations are strongly represented with a lot of freelancers from the US, and UK. I have also heard that the Philippines is a popular source for high quality, low cost English writing (although I have yet to hire someone from the Philippines!).

The 3 flavours of freelancer that I have worked with, these are:

It can be difficult to identify the 3 flavours, checking the freelancer’s volume and frequency of work (in the website history), or just asking them upfront can help you identify what class they fit into:

• Type 1: Casual Freelancers
• Type 2: Sleepless Professionals
• Type 3: Fulltime Professionals

Type 1: Casual Freelancer

These guys are often students (studying or just graduated), and sometimes parents working from home. They can also be people just experimenting, trying it out to see if they like freelancing.

Pros:

• Tend to offer very low prices
• Can bring a lot of enthusiasm to the work
• Can have more experience with newer web technologies

Cons:

• Has more important priorities then your work. This is bad as we want someone with a vested interest in our success
• More likely to under quote and then lose interest in the work if it gets out of control
• More likely to apply very lax project management to the work, increasing the risk of failure
• More likely to disappear, and get out of freelancing. This can leave you hanging if they’re the only person that understands your system and something goes wrong
• May lack the depth of experience required to meet your expectations
• May lack the required depth of skill to provide a high quality product and may struggle with technically difficult work
• More likely to waste your time with bids that lack any kind of supporting evidence or track record eg. “I can do this for you, I am best. Just give me a chance.”
• More likely to be undisciplined in work practices, leaving you with messes to clean up
• Communication relay can be slow, as they’re only available at certain hours

What are they good for?

I would only use them for simple, well defined work such as logos, minor page or CSS edits, and maybe simple software installs or server configs. For anything that takes more than 3-5 hours of work I would not use them.

General recommendation for Casual Freelancers:

Avoid if possible. Whilst there are some advantages to using causal freelancers, the risk is high and there are better solutions.

Type 2: The Sleepless Professional

These guys are fully employed professionals. They have a day job, but at night they drop the suit and moonlight as a freelancer. They often have several years experience in a particular field and are looking to make a few lucrative bucks on the side. They are more likely to be from developing nations. I call them sleepless, because some of the guys I work with survive on so little sleep it amazes me.

Pros

• Tend to bring more rigorous work practices to the project resulting in a higher chance of success
• More experience with different systems and situations, means they can often make valuable contributions by suggesting improved methods or solutions
• Often have more experience with the client-provider relationship, which improves communications and expectations management
• Higher quality bids on projects, but still tend to price toward the lower end of the spectrum
• Experience-experience-experience

Cons

• Your project is a hobby, as such it is a long way from being their top priority in life
• Limited work hours available in any given week can slow down bigger or more complex parcels of work. Also presents a major issue if you need to rush something through
• Communication relay can be slow, as they’re only available at certain hours
• If something big goes down at work, they drop off the radar for a few days

What are they good for?

I have employed a few of these and had mixed experiences. The most common problem is slow communication because of their limited availability and differences in time zones. This really slows things down. I have found some success with employing project managers in these roles, where they manage the work of others and report progress to me. I would not use them for intensive development work, or anything that takes more than 5-10 hours of work in a given week.

General recommendation for Sleepless Professional Freelancers:

Great in certain situations. Only use for smaller parcels of work. If you’re experienced with managing freelancers, they can be a very cheap way to access specific skills.

Type 3: Fulltime Professional Freelancer

As the name suggests, these are people who make their living freelancing. They tend to offer a high degree of commitment to the project- they want a positive review at the end of it. They’ve worked on dozens if not hundreds of projects in their field, and can bring a lot of experience to the table.

Pros

• They take the work seriously, and tend to be very committed to achieving a successful outcome
• They have a lot of experience with projects like yours and can provide meaningful contributions to planning and solution development
• Bids tend to be fairly accurate, but at the high end of the price spectrum
• They tend to be very ‘available’ in terms of communication. You can reasonably expect very fast response times to queries or requests

Cons

• No matter how great 1 guy is, sometimes having 5 is better. Difficulty with scale is the biggest issue with freelancers if you have a larger project and you need it fast ($5k+)
• Lack of redundancy. Health issues, holidays, family events can all impact on your schedule; and there’s no easy way around it if you’re halfway through a piece of work!
• Have a tendency to be too relaxed about project planning, and often view it as unnecessary overhead (it eats into their time). This can introduce additional risks to more complex or difficult tasks.
• If they take on too much work, and your project is less lucrative, you may get bumped down their list of priorities. They won’t tell you this… just things will take longer than usual and you’ll get shallow excuses.

What are they good for?

Fulltime professional freelancers are my preferred hire when outsourcing. I have had the best results when working with these guys, despite the limitations described above. I have some long standing relationships with people who repeatedly provide me with outstanding work.

However, I would not use them for intensive development work, anything that takes more than 20 hours of work in a given week. It’s been my experience that above this workload, you start to see declining performance (later work, lower quality etc). I’m not sure why.

I am also careful to hire only for a single discipline. For example if I hire a guy for ASP.NET (web development), I’d hire someone else to do HTML. I’ve found that limiting work to specific disciplines improves the quality of output.

General recommendation for Fulltime Professional Freelancers:

The best way to hire the skills you need at the lowest possible price. Just be careful if you require a lot of work done in a limited timeframe ($5k+ projects with tight schedules). You may be better off with a company that can provide you with multiple bodies.

That wraps up the discussion on the different types of freelancer, in the next article we’ll explore companies that provide online outsource services. Here it is, The 4 Flavours of Outsource Service Providers.