Elance Blog

Why Big Companies Hire Freelancers

This morning, the latest contractor to join our crew asked me: "Why does MTV want to work with us? They have amazing designers and are a huge company. What can we do that they haven't completely mastered?" It was a fair question. Why does MTV outsource work? Or AOL, SAP, NBC or any of our other customers? Is it because any company with a three letter all-cap acronym can't built its own technology? Nope, that's not it at all. We've personally run into 6 different reasons. I wouldn't be surprised if there were others, and I'd be stoked to hear all about it in the comments. Ok, let's kick it off:

  • They're slammed.
  • The idea/strategy was pitched and included your services.
  • They are stuck.
  • The internal team lacks a specific specialty.
  • Politics prevent internal allocations.
  • Accountability. We just get things done.

They're slammed.
"Help us [obiwan kanobi]. We have more tasks than people." This is by far the most obvious answer. Some times, they are just plain busy. Of course, that doesn't stop executives from thinking up innovative solutions to company problems. It certainly doesn't stop customer service from digging up issues with their applications. The needs just keep rolling in.

At SXSW, we heard a speaker from Google describe project managers as having either "a s**t funnel, or a s**t umbrella". Either they are trying to drink from the fire hose of requests and steer everything, or they are trying to protect the focus of their team to get some key project completed. Either way, their job is to effectively use available resources to accomplish the most things with the highest business value. Sometimes, companies have more money available than people. And that is where we fit in. You, my friend, are a tool in their belt. They have a deadline, a scope and a budget. The pm is your best friend. That is actually who contracts you and pays you bills. Executives are great and are often the person who can offer a way in. Project managers are the freelancer's real customer and keep the door open.

The idea was pitched and included your services.
The MTV project came though a media strategy company. We are a sub contractor, the execution arm of the project team. They approached MTV with an idea: "You could increase your business by tapping into this specific market segment in this way. " Executives at MTV examined the proposal, deemed it valid and agreed. Design was included in the strategy proposal. Enter Shane, Peter, Reid & Crew.

I love this sales method. No RFPs. No competition. Simply find a way to add value to a company, get to the right person and then pitch the idea. Its a phenomenal approach to gigs with great companies. If the idea is yours and they like it (as long as you can back your ability to deliver), the project is yours to implement.

They are stuck.

I used to ask one of my early mentors every time we met, "What do you know about my business that I don't?" It is fairly common on long projects to be so involved and married to assumptions and ideas, that you suddenly end up trapped. You can't see anything past your own shoes.

When this happens, companies will bring in fresh blood. They don't need a long term addition to the team, just someone to shake them loose, provide a fresh perspective. You, the freelancer, go in, and point out something that is obvious from 100 yards away, or perhaps find a way to re-frame or sidestep the problem entirely. You may be the one with the answer, but more often than not, your role in this situation is a catalyst.

The internal team lacks a specific specialty.

Perhaps AOL needs a supremely skilled windows 7 mobile developer . While they have 60,000 employees, no one has quite mastered the technology (because it has only existed for a few months). You just happen to have been working with the technology since it was pre alpha.

We work with all types of companies that need someone with serious mobile or UX experience, or perhaps an expert to scale wordpress past a couple million uniques per month. Often we are called in to play the role of specialist.

Politics prevent internal allocations.
Most people look at a large company like SAP or Boeing and see a giant behemoth. The truth is that they behave more like a small republic, composed of semi-autonomous townships. They are fractious at times and cooperative at others. While technically it may be true that somewhere, there is a designer free to do the project within SAP, they may belong to a totally different division. In an ideal world, free from complications and bureaucracy, that person would handle it. In our world, team A doesn't want to share budget with team B.

The project manager knows that they could requisition the designer and the request might get approved (after navigating a fairly complicated bureaucratic maze), but the odds and the time are not something they can risk with the deadlines at hand. So they grab budget from somewhere and outsource.

We do a lot of R&D work for SAP. It is some of my favorite work. A senior executive has an idea they want to present to the board of directors. Usually for a product, but it could be a new business process or an internal toolset. Often though, the waving of hands is only marginally successful when trying to demonstrate a complex idea. Enter the prototype. As is often the case, said board meeting is 3 weeks away, they are trying to keep this hush-hush. So rather than navigate a complicated internal request system and risk their brilliant idea being squished through attrition, they hire out.

Accountability. We just get things done.
Think TPS reports, 8 bosses and a brutal game of Tetris. The world is full of stellar ass kicking employees. Too bad they are usually downing in an ocean of mediocrity. Some times, an executive, art director or pm just needs something done and turns to someone they know will deliver. That would be you. They dodge the quicksand trap in accounting by paying you from "petty cash" (I love working from companies where < 25k is chump change), give you the obscure target and a totally unreasonable deadline. The first time is a total gamble on their part. By the 5th time, word got out around the company that you are a go to solution. The effect continues because now you know their culture, their visual language, the nuances of squeezing that payment from AP's clutching gasp. One less thing for them to have to communicate. That is why they keep calling you, and how you eventually could become an agency of record.

One Final Thought: Selling to Large Companies
I often get asked how we get our contracts with such big companies. Here's the answer. We don't. We get contracts with Raul, Beach, Kelly, Burke, Tamara… people hire us not companies. Our goal it to make our customer a hero. We build relationships with smart people and we leverage every successes we can into another gig. Want more big projects? Make more friends and when given the opportunity, kick ass.

About the Author
My name is Shane Pearlman. I’m a huge Freelance Evangelist and founder of Freelance Camp. I lead teams in UX, UI, Web + Mobile Design. I’m a Wordpress & Redmine contributor. For updates, a healthy dose of freelance evangelism, release information and tips about our open source projects or redmine core ux/ui, living on pad and more, follow me on twitter @justlikeair. Also check out our blog at http://blog.shaneandpeter.com.

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I Just wanted to share with the rest of the Elance blog readers that i am currently working with a fantastic company that i found on Elance, they're called eSoftTechnologies. Their design and programming quality is the best i've come across on elance and the service they have given me is absolutely first class.

If anyone needs ant sort of web designing or programming i have no hesitation in highly recomending eSoftTechnologies

Kind Regards

Mark from Tweeteazy.com

- They don't need to pay insurance,
- They don't need to sign employing (regular) contract,
- They can chose from a price range,
- ... It's plain cheaper in many ways for (big) companies to employ freelancers.

Nice article Shane! How's that oven coming along? ;)

Great article!
You are dead right about the accountability part.
Employees come and go, but consultants go on for ever.
Our dedication and accountability is directly proportionate to our growth so it's more effective than a salaried employee's output.
I wish more companies would learn this fast!!
Archita D Majumdar

I think you forgot to mention that companies hire freelancers for one main reason above all others: they're cheap.
If I had a company and could afford a real team of specialists to run my business, I wouldn't need freelancers, under normal (and ideally most) situations, and I could afford to create quality work, because I'd know very well the people I hired, whom I can rely on, they'd be working under the same roof and better communicating with each other, and the whole pipeline would be better organized. But if I can't afford what I need, I'll work cheap and low-quality, and hire extra-people per project, people that I don't know so well and I don't necessarily trust, and I don't have to pay them all those expensive benefits. It may be good for my business on a short term, but it certainly doesn't help creating quality work, and doesn't help me have a stronger, long lasting business. Also, it doesn't help that person being employed, that s/he has to work only when work is available, and that I don't pay him/her vacations, holidays, sick leaves, retirement plan, medical plans, dental, life insurance, and 1001 more possible benefits that would make me waste a ton of money, and make him/her life better. Or normal.

You neglected to mention the main reason - Elancers are generally ridiculously cheap!

Re: They Are Stuck: Isn't this the difficulty faced by so many business ventures? The all to human pride of their managers/owners? Two heads are better than one, as the cliche' goes - or in this case, an outside perspective is better than yet more groupthink.

I also know from experience that Freelancers from sites like elance.com often are able to offer a complete new perspective on budding business startups. They are able to bring to light, new ideas and creativity that are brought by the bare fact that business owners, whether for a startup or a management team running a large marketing department, simply do not know all the possibilities that exist while creating a website.

For example, only creative developers really understand all the possibilities associated with creating a new website, this is hard for a business owner to grasp as their expertise lies in management, not creative design of websites and projects. Developers & programmers have experience, tools, tricks, and knowledge of everything that is available. This is an extremely valuable tool of outsourcing, being able to find a contractor that is able to take your concept and bring it to life.

All this was unheard of years ago. Now, a budding entrepreneur has access to the same developers on freelancer sites, that billion dollar companies have. It's great.

Warmest Regards!