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Hiring Freelancers vs. Agencies: Which is Right for Your Business?

October 6, 2023
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Do you want to hire a freelancer or an agency for your next project? You're not alone. Many businesses face this decision, and knowing which option is right for you can take time. According to a recent study, 63% of companies hire non-full-time employees. This number is expected to continue to grow in the coming years, as more and more businesses see the benefits that come with it. This blog post will discuss the pros and cons of hiring freelancers vs. agencies so you can make the best decision for your business. The difference can sometimes be thin, but it's essential as a business owner to understand what works for your requirements best.

Do you want to hire a freelancer or an agency for your next project? You're not alone. Many businesses face this decision, and knowing which option is right for you can take time. According to a recent study, 63% of companies hire non-full-time employees. This number is expected to continue to grow in the coming years, as more and more businesses see the benefits that come with it. This blog post will discuss the pros and cons of hiring freelancers vs. agencies so you can make the best decision for your business. The difference can sometimes be thin, but it's essential as a business owner to understand what works for your requirements best.

We will talk more specifically about software development services, but most of what we talk about applies to marketing, operations and any other work.

Why is a Freelancer better than an Agency?

A freelancer can be an excellent addition to your business for many reasons, but the top is skill and flexibility. I'm adding a detailed list of the pros and cons of hiring a freelancer.

Pros of hiring a freelancer

  • Flexibility - adding and removing a freelancer to your project is easy and quick. Giving you the flexibility to scale up and down as you need.
  • Expertise - verified freelancers are generally skilled at what they do so that you can get the most complex of your issues and requirements fulfilled once they are onboard.
  • Cost-effectiveness - compared to hiring an agency, freelancers are more affordable. This is generally true for skills for which there are many freelancers available. As the skills required specialises, the price gap is almost negligible.

Cons of Hiring an Agency

While you understand why hiring a freelancer is beneficial, you should also learn some drawbacks of hiring an agency.

  • Less flexibility - onboarding a new agency may take longer than hiring freelancers. The paperwork, due diligence, and match need to be good before anything can start. The upfront commitment from your business is generally more significant when working with a freelancer.
  • Higher cost - Agencies will charge a premium over hiring freelancers. They will generally be costlier by 10% to 30%.
  • Less control over the project - if you are someone who may want to have complete control over the work, you have to work out the right kind of agency. There are multiple models in which an agency can operate.

Why Agencies are Better than Freelancers?

And of course, there are correct answers here, and Agencies may be the best thing for business. Here's how you can identify if it makes sense for your business.

Pros of Hiring an Agency

  • Full-service solutions - an agency can help you with multiple things, and you don't have to fight your hiring pipeline to find the right candidate. It's like you identify the right agency once, and then recruiting and vetting are no longer your concern. Agencies can help you with product development, design, QA, and marketing.
  • Teamwork - Agencies have an experienced network internally, which can enable a faster and better solution to your problem. You can tap into the experience of numerous projects the agencies have already worked with.
  • Accountability - accountability is a challenging trait to evaluate and recruit for. With agencies, they have figured out the process and system to make that possible.

Cons of Hiring Freelancers:

  • Lack of management - freelancers generally work on multiple projects, and you may need to manage and monitor to get the best output constantly.
  • Difficulty finding qualified freelancers - recruitment is said to be one of the most complex problems for a reason, and after that is retention. Finding trustworthy talent of any kind full-time or contract is challenging. With an agency, you have to vet once, and they can be your constant source of delegation.
  • Communication challenges - Freelancers and independent contractors are generally good at the work. However, they may need to improve processes and communication needs for your business, which may be crucial for its functioning.
  • Less accountability - there are great freelancers out there, but doing repeated work sometimes makes it dull for them, and you may need help to ensure the right and the best things happen at the right time.

Here's a table that will summarise the same idea in a visual representation

CriteriaFreelancersAgencies
CostMore affordableComes at a premium
FlexibilityCan work on your scheduleCan allocate multiple resources to meet expectations
ExpandabilityNot possibleEasy to expand
ExpertiseEasy to find expert freelancersVetting agency for expertise can be difficult
ManagementMore hands onMore autonomous
AccountabilityGenerally lowerGenerally Higher
Full-service solutionsDepth oriented and nicheDepth and breadth solutions
CommunicationDepends on individualDetailed and process oriented
Best Suited forShort & clear work that need expertiseAll range of possible work
OnboardingFastSlower compared to Freelancers

Conclusion

Deciding between hiring a freelancer or an agency is a complex one. It's also a matter of meeting the right company or the person. It can make all the difference in your perception. The only way to figure out is to play small bets with those you think align with your expectations and then expand if the experiments work out.