The 7 Headaches of Hiring Independent Contractors — And How to Avoid Them

In our previous article, “Why Companies Are Turning to Talent Marketplaces” we looked at why more businesses are turning to independent contractors for work that does not require a full-time employee. We also looked at the impressive growth of the contingent, or flexible, workforce.

The trend is clear. But many smaller companies are still reluctant to use independent professionals — even when they have the most to gain.

And you can understand why.

Freelancers and consultants dramatically widen the talent pool. But a bigger pool can mean more applications to sift through. Someone may interview brilliantly on a screen, but are they really as qualified as they claim? And can you safely give someone you have never met access to your systems, data and customers?

These are legitimate concerns.

The good news is that the better freelancing platforms have been tackling them for years. In much the same way that e-commerce once had to persuade people it was safe to enter their credit-card details online, the independent-work industry has had to build trust into the hiring process.

For SMEs, the following are the main pain points — and how to deal with them.

Cost: What does a freelancer really cost?

A short-term assignment is often urgent. So it is understandable that hirers wonder whether there is a cheaper way to get the job done.

At first glance, freelancers can look expensive. Their hourly or project rate may appear higher than an employee’s salary when the two are compared directly.

But that is not a fair comparison.

Freelancers receive none of the employee benefits that companies provide. They pay their own healthcare and insurance costs, fund their own retirement and continually invest in training, conferences and professional development to keep their skills current.

They also have to survive the gaps between assignments. Mortgages, car payments, children and everyday life do not stop simply because the next gig has not arrived.

So freelancers have to price in that uncertainty.

But now look at the employer’s side of the equation.

Add office space, HR support, employer CPF contributions, benefits and the other costs of keeping an employee on the payroll. Suddenly, the comparison looks very different.

The freelancer may be considerably more cost-competitive than the salary figure suggests.

Could you simply employ an expert and let them go when the work dries up?

Apart from the obvious legal and employment issues, there are other costs. Repeated hiring and firing can damage staff morale and your reputation as an employer. And prospective employees and consultants can check that reputation on platforms such as Glassdoor.

So what does the smart money do? It looks for a better answer.

Consider the recently retired expert

A recently retired professional can be an unusually attractive source of expertise.

Many experienced professionals are not looking for another full-time career. They may simply want to keep working selectively, stay engaged and continue earning.

For these “Geriactives” — a term that arguably describes today’s active seniors rather better than “geriatric” — the economics can be very different.

They may already have retirement savings and established healthcare arrangements. Their children may be independent and their mortgage paid off.

Most importantly, they do not necessarily need to keep working continuously. They can enjoy downtime without having to charge every client for the risk of an empty calendar.

For the hirer, that can mean something valuable: highly experienced expertise without the cost of a full-time commitment.

There is a reason the smart money is taking a closer look at experienced professionals.

Pain point: Hiring takes too long

Opening your doors to freelance talent gives you access to a much bigger pool of qualified people.

But there is a catch. Someone still has to work through all those applications.

The simplest way to reduce the workload is to get the brief right before you start looking.

For employees, that means a clear job description. For independent professionals, it means a precise project scope.

It does not need to be long. It needs to be specific.

Before writing it, picture the person you actually need. Ask:

What experience should they have?

Previous work is often the best evidence. Someone who has consistently delivered good work is more likely to have the discipline, communication and organisational skills needed to deliver again.

Where should they be located?

If the work is remote, time zones and location may still matter. Decide how much overlap you need for meetings, collaboration and urgent issues.

What motivates them?

Independent work can sometimes be isolating. Someone working alone while the rest of your team sits together may feel disconnected from the project.

Think about how the person will interact with your team. Where useful, build face-to-face meetings and team interaction into the engagement rather than assuming everything can be handled over Zoom.

The clearer your scope, the fewer unsuitable applicants you have to deal with.

Good freelancing platforms can also help. Many provide guided tools — or “wizards” — that walk hirers through the process of defining a project. These can be particularly useful when you are hiring a skill you have never hired before.

Pain point: Keeping communication on track

Remote work introduces another challenge: communication.

Different time zones can make interviews, discussions and live assessments difficult. Email and chat often become the default, with conversations stretching across hours or even days.

That does not have to mean losing control of the project. A good freelancing platform should provide a single communication channel where the relationship can be managed from start to finish.

That can include meeting scheduling, real-time messaging, file sharing and video calls — with the communication history retained in one place.

The benefit is simple: less hunting through emails, fewer missed messages and a clear record of what was agreed.

Pain point: Can you trust someone you have never met?

Hiring online can sometimes feel like rolling the dice.

Someone can perform well in an interview and sound genuinely enthusiastic about your business. But that still leaves some obvious questions:

Are they really who they say they are? Do they really have the skills they claim? Can you trust them with confidential information and company data?

These are not unreasonable questions.

The answer is not to assume that independent professionals are riskier than employees. It is to put proper checks around the relationship.

In Singapore, look for platforms that use Singpass identity verification for their members. Ideally, providers should also be able to demonstrate their qualifications, previous work and professional track record.

Ratings can add another useful layer.

A reliable rating system can tell you more than a CV alone about someone’s ability, reliability and attitude. But do not stop at the star rating. Read the comments.

They often tell you much more.

Pain point: How do you hold a remote professional accountable?

Independent professionals are businesses in their own right.

Their reputation matters. On a marketplace, it can directly affect whether they win their next assignment.

That creates a powerful incentive to deliver. Do good work, meet the deadline and earn a strong rating. Get it wrong, and the rating follows you.

On a platform such as SenseiGigs, hirers can review ratings from previous projects and read the comments behind those ratings. Providers can also strengthen their showcases with testimonials, qualifications and examples of previous work.

That gives a hirer several pieces of evidence before making a decision.

A marketplace can also use ratings as part of its matching process, putting the strongest performers higher in search and recommendations.

There is another factor worth remembering in Singapore.

It is a small, well-connected market. Professional reputations travel. Experienced professionals know this — and they understand that today’s performance can affect tomorrow’s opportunity.

For mature professionals in particular, decades of experience can bring something that does not appear on a CV: a very clear understanding of the connection between reputation, performance and reward.

Pain point: Does using contingent workers increase cyber risk?

It can feel that way. But the reality is rather different.

Cybersecurity risks exist wherever people work — in your office, from home or on the road. Employees already access company systems from personal devices, use public Wi-Fi and check email outside normal working hours.

Meanwhile, cybercriminals continue to become more sophisticated at tricking people into opening malicious links, downloading malware or surrendering credentials.

The answer is not to assume that independent professionals are inherently dangerous.

It is to apply the same sensible security standards to everyone who has access to your systems and information.

Your security protocols should cover employees, remote workers and independent contractors alike — and they should be kept up to date.

The platform itself also has a role to play.

A reputable freelancing platform should continuously review and strengthen its own security because it is handling large volumes of user, project and payment information.

SenseiGigs’s planned security measures include:

• PayNow payments, so customer credit-card and banking details are not stored on the platform.
• Machine-learning tools to help identify potentially malicious behaviour by clients and freelancers.
• Privacy controls designed around Singapore’s Personal Data Protection Act and, where applicable, international standards such as the EU’s GDPR.
• Know-Your-Customer and Anti-Money Laundering controls to help verify users and manage financial risk.
• Secure third-party cloud services such as AWS, Azure and Google Drive for file transfers, benefiting from the security measures built into those platforms.

The principle is simple: do not treat independent professionals as the security problem. Treat access to your systems as the security problem.

Hiring independent professionals is easier than you think

Talent shortages are not going away. For many businesses, continuing to rely exclusively on permanent employees will increasingly limit their access to specialist skills.

But hiring independent professionals does not have to mean taking unnecessary risks or creating another administrative headache.

The right freelancing platforms have already built systems to address the main pain points:

Finding the right person.
Checking who they are.
Assessing their track record.
Communicating with them.
Managing the work.
And creating accountability.

You do not have to start big.

Start with a small, clearly defined project. Use a platform that provides the technology and safeguards around the engagement. Learn how the process works and how your team works with independent professionals. Then scale up.

The smart way to embrace flexible expertise is not to take a bigger risk. It is to use better systems to make the risk smaller.