How do I hire freelancers who actually add value to my business?

Pretty bold question for a freelancer to throw out, right?

In today's digital era, the world of work has undergone a transformative shift.

Businesses are no longer bound by traditional employment models. Instead, they have the opportunity to tap into a vast pool of freelancers and independent contractors who can contribute their expertise from anywhere in the world. This newfound flexibility comes with its own set of challenges--particularly when engaging freelancers on an hourly pay basis.

In theory, hiring freelancers on hourly pay seems like a win-win, right?

I, the business owner, can hire a specialist for exactly as much time as I need to. My risk is managed.

And the specialist: he gets a set amount per hour, and can (mostly) plan out how to get bread on the table--and whether or not he'll be able to put wagyu pâté on it.

In practice, this arrangement can lead to one major pitfall...

Bad Incentive Alignment

Let's talk about the elephant in the room:

when you get paid per hour,

the more hours you work,

the more money you make.

It sounds so self-evident. It's a tautology. You might think I'm stupid for even feeling the need to say this. "Duh, when you get paid per hour, more hours means more money."

Not really what I mean.

Thing is, hourly pay encourages freelancers to prioritize the number of billable hours--rather than the quality and efficiency of their work. This can lead to inflated billing and unnecessary prolongation of tasks to increase earnings, without necessarily providing additional value to the business.

You might say you only work with trustworthy freelancers who don't do this.

I have sad news for you: it's rarely intentional.

Sure, there are a few bad apples who take advantage of clients. We've all worked with someone we suspected was taking advantage of us before.

But, in reality, this incentive misalignment to work more hours because it means more money is a subconscious pull that acts constantly--and frankly, most freelancers* just don't have the required level of self-awareness, mindfulness, and discipline to fully counteract this pull.

*Side note: this definitely isn't just limited to freelancers, it extends to all people. When you meet anyone who makes self-improvement and mindfulness core tenets of their life, in addition to integrity... please, for all our sakes, reward them for it.

The Anti-Solution

"So, what's the solution here, Dennis?"

"Do I track exactly what they're working on every minute using a screen recorder?"

"Build in some kind of penalty to their rate to account for this?"

"Hire them on as employees?"

Hopefully at this point you can see none of these will work.

They all just push the problem somewhere else that still ends up impacting your bottom line.

Why? The incentives remain misaligned at the core subconscious level of the human mind.

You are fighting an uphill battle with any freelancer that doesn't actively question their biases constantly.

Because 1 hour = $100 and "that means if I can just find one extra hour of work to do, I can end the day with an extra 100 bucks..."

Most freelancers will not want to admit this. Think about it: Very few people who tie their identity to fitness would openly admit that they could have done better on that last exercise of their ab workout. (... And the first set too. And the sets in between.) In the same way, very few freelancers, who tie their identity to the value they provide per unit time, would openly admit that they could have done better on hours 1, 3, and 5 of yesterday's billables.

The key takeaway: people with good intentions still have blind spots.

The Actual Solution

The first part of the solution is obvious... avoid paying freelancers on an hourly basis where you can. If you engage me, I will literally pitch every payment structure to you before I would dare to suggest hourly.

But let's take it one step further.

To round things out, I'm going to give you two pieces of advice you've likely never heard before.

These are the solution to not only avoiding the pitfalls of hourly pricing, but also drastically improving the future of your business and your freelancer relationships.

1) Only work with freelancers who themselves are entrepreneurs.

Ok, sure, I get it. You're worried about entrepreneur freelancers copying your idea and doing it themselves. Freelancers who don't release their own apps will never steal your ideas.

That's a nice little safety feature, I'll admit. But... they also will have no idea what it actually feels like to put your ass and time and money on the line to deliver a product, AND deal with the repercussions.

Contractors typically get paid even if the product flops completely. Because of this, many have little to no concept of risk and reward.

Really think about it: is this the type of expert you want in your corner?

2) Work with freelancers who practice self-improvement and mindfulness religiously.

There is a saying that the most dangerous person is the person who thinks he knows it all.

The people who think they have the perfect setup, have all their blind spots uncovered, and that they could never possibly do anything (even by accident!) that might not be in the best interests of a client, are the most dangerous.

They are like kids who just hit a growth spurt, hitting another kid that annoyed them--not realizing that they're bigger now and their hits actually hurt.

The people who base their life around questioning their beliefs and blind spots--and eking out 1% improvements in all facets of their life--are the ones that will really propel you forward.

And I can confidently say this: just by talking with them, you will learn something about yourself that you can put to use -- synergy!

Putting it ALL together

By now, you have realized why I feel so strongly about the points above.

I'm both #1 and #2: an entrepreneur freelancer, and a believer in self-improvement and mindfulness.

I strongly believe in understanding a client's goals and meta-goals so that I can help them as an active partner in their journey to delivering a website or software product.

Should you choose to work with me, I will either give you an upfront cost per service or ask you to put me on a retainer so that we can have an ongoing back-and-forth, with an estimate for how long we'll need to stay on retainer to get you to where you need to be. I put a refund guarantee on each retainer period because I want your risk to be managed.

So... If you've read this far, odds are, you probably trust me to help you navigate the complexities of the modern world of tech and drive your business to new heights in the digital renaissance.

Book a discovery call today.

It's free. Seriously, free. Always happy to give you some clever ideas you can steal, if it helps.