You want to hire a talented but affordable graphic designer and someone suggests Upwork.
Now all you have to do is register on this global freelancing platform, create a job posting and then sit back as a slew of candidates jump at the prospect of working on your project. You choose the best freelancer and your project is good to go.
Simple, isn’t it?
Well, not exactly.
While digital freelance marketplaces like Upwork have played a big role in helping companies and individuals find talented independent workers, the sheer size of freelancers bidding for a project make it very difficult to separate the wheat from the chaff.
In other words, if you aren’t too careful you may end up hiring an incompetent candidate for your project.
It works the other way round too!
As a freelancer, trying to find good paying projects on Upwork can be an uphill task. You need to not only outbid talented competition, but also contest with freelancers who are willing to charge very low rates.
Can you make the best of this platform?
To help you figure out how, we did a review of Upwork.
Read on to know what it does, how it operates, what are some of the pitfalls and how to avoid them so you can hire top talent for your business (at the best price!).
Few years ago, two popular online freelance platforms Elance and oDesk merged to form Upwork. According to the company, it is “the premier freelancing website for top companies to hire and work with the world’s most talented independent professionals”.
The platform says it has over 12 million registered freelancers and more than 5 million registered clients. It posts 3 million jobs annually and does $1 billion worth of work on an annual basis.
With the advent of ‘gig economy’ where people are leaving the security of full time jobs to pursue different opportunities in the form of independent work, many talented professionals are signing up on digital marketplaces like Upwork to offer their services.
Even attorneys, CMOs, and consultants with world-class training are choosing to work independently.
By 2020, more than 40% of the American workforce will be freelancers and independent contractors.
Freelancing is great for individuals as they get to choose their assignments and work schedule.
For organisations, it is a good opportunity to hire talent that may not be available in-house or even in the same geography. By 2017, an average business will hire 25% of its workforce as freelance workers, up from 20% in 2015.
The digital platform has changed its fee structure and now charges both the client posting the job and the freelancer getting the gig.
For clients hiring freelancers, the company charges 2.75% processing fee per payment transaction.
This fee is calculated as a percentage on top of the payment you make to freelancers. For example, if the client makes a $1,000 payment for a project, the platform will charge an additional $27.50 processing fee.
Earlier, clients were not charged any fee.
Clients that spend more than $910 a month and are in the U.S., Canada, Australia, the UK, and certain Eurozone countries, may be allowed to pay a monthly flat fee of $25 instead of 2.75% per payment. This fee structure is accepted only on a case-by-case basis, so you need to write to Upwork for approval.
Freelancers pay a sliding service fee of 20% to 5% based on the freelancer’s lifetime billings with a specific client.
You pay 20% for the first $500 billed with the client across all contracts, then 10% for total billings between $500.01 and $10,000. When total billings with the client exceed $10,000, a 5% fee is charged.
Essentially, the more business you do with one client, the less fee you pay in the long run.
Earlier, freelancers only paid a fixed 10% service fee for all contracts.
According to Upwork, the new pricing model is designed to incentivize higher-value, longer-term projects.
Some freelancers who were earlier working on Elance and oDesk have found the pricing change disconcerting. James Duren, a freelance writer who has been getting work from Upwork since 2014, said he would have trouble hitting the $10,000 lifetime total for his clients to qualify for the 5% fee.
Others like Danny Margulies, a copywriter who moved to Upwork from Elance disagree. Margulies said he quickly got a request from a client who saw his $135-per-hour rate.
Increase in fees may not be a big issue on its own.
Clients may want to adjust the ‘price’ of a job with the processing fee, reducing the actual rate of a job. There are some highly tedious proofreading jobs going for as low as $10 per hour.
Freelancers, on the other hand, may jack up the cost of a job according to the margins they want to make after paying service fees.
This may lead to businesses paying higher fees indirectly, while simultaneously getting deprived of good talent that is not keen on lowball job offers.
As a client…
As a freelancer…
When you hire a freelancer on this platform there are two types of payment – for fixed price contracts and for hourly gigs.
For fixed price contracts, clients need to make deposits in an escrow account. The money is released to the freelancer once the job is done or on reaching specific milestones in the project, whatever has been decided between the two parties.
On hourly jobs, clients are billed every Monday for the previous week’s hours based on the freelancers’ work diary that records number of hours put in a job with work-in-progress snapshots.
Payments can be made through credit card, debit card, bank accounts (US clients only) and PayPal. These payment accounts need to be verified by Upwork.
As a freelancer on an hourly job, the billing period will start on a Monday and end on Sunday; and your funds are available 10 days later (following the close of the billing period).
For fixed price gigs, money is released to the freelancer (on completion of the milestone or project) after a security period of around 5 days. Upwork needs this time to process and clear the payments, and resolve any disputes, before funds are released.
This system also has an in-built payment protection for clients and freelancers.
As a client you get to define milestones in fixed price jobs. Payment is released to the freelancer only after you have received and approved the work. For hourly jobs you can check a freelancers’ work diary before approving payment.
Freelancers are assured payment for hours clearly worked on the project using the Upwork Desktop App. On fixed rate projects the client deposits a milestone payment into escrow before work begins.
For many freelancers this system works better than running after a client to clear an invoice after completing a project.
However, it sometimes gets tricky.
There have been cases where freelancers have finished a job but the client has refused payment on some pretext – like unsatisfactory quality. Similarly, clients sometimes make the final payment but aren’t given complete access to all deliverables of a project (code files, graphics, templates, etc.) by the freelancer.
This means as a client you don’t get access to the job you have paid for and as a freelancer you can’t get your money.
As a client…
As a freelancer…
Finding and hiring good talent on any freelance platform is a time consuming job. It is no different for Upwork.
Companies and entrepreneurs, looking for freelancers on Upwork, usually complain that good talent is hard to come by, there are too many mediocre applicants and you also need to keep a look out for scamsters.
However, it’s not impossible to hire good talent at reasonable rates. Try these tips:
Chalk out objectives for the project, identify any special tools or skills needed, and describe the level of experience you’re looking for. Also include details like results expected in the form of deliverables and deadlines.
Seems like too much work?
You can also give Upwork Pro a chance. It is a new, paid service from Upwork. The company says it helps busy hiring managers find, engage and hire the right freelancers from a group of handpicked, pre-vetted professionals.
Under the Pro version, freelancers go through a series of tests and interviews to qualify on technical skill as well as behavioural aspects that evaluates communication skills, teamwork and professionalism to determine if they are fit for a role.
As a client, when you sign up for Pro, you get an account manager who works with you to understand the requirements of your job including specific technical expertise, budget, etc.
The manager then posts the job in your Upwork account, screens Pro freelancers and creates a shortlist for you. These shortlisted applicants submit proposals to you. You can then sort through this selective list of freelancers, interview them and finally hire the best candidate.
All these services come at a price of $149 per month and a client service fee of 10% on all freelancer or project payments.
The Pro sourcing service is also available to Upwork Enterprise clients.
Upwork Enterprise gives large businesses direct access to freelance talent on Upwork plus the ability to source and engage freelancers from their own private talent clouds.
The latest version of Enterprise also allows businesses to customize their on boarding processes with steps and checkpoints that could include skill tests and background checks.
Want to know how to hire a great developer on Upwork? Check out our detailed post here.
While we all know that when applying for a job, you need to write a top-notch proposal that attracts a client, there are a few tricks that could seal the deal for you on this platform:
As the client you have found the best freelancer; and as an independent worker you have found a well-paying, interesting job.
Now we can all sit back and relax.
Not so fast, though.
There’s more to getting a job done right than hiring a great guy. Here’s what you need to remember:
Despite all precautions sometimes disputes arise. Some common sources of dispute on Upwork include if a freelancer has billed you for more hours than necessary to complete the task or has submitted subpar quality of work.
In such cases, the client has time till the end of the review period (usually a week) to talk to the freelancer and resolve the issue or file the dispute. For hourly jobs, disputes must be based on hours billed, not the quality of the work.
For fixed price jobs, rules say that only freelancers can file disputes (for the release of the escrowed funds). However, that does not mean you cannot talk to your freelancer about a refund. Moreover, there have been cases where clients did dispute fixed price jobs and got a refund on the total payment.
As a freelancer, you must always work using Upwork’s time tracker that is part of its desktop app. This is proof of the time spent on a job. Also for fixed hour work, negotiate on milestone based payments to ensure that you get part payment for completing certain parts of the project.
Go into a dispute only if absolutely necessary. Dispute resolution is not one of Upwork’s major strengths and they tend to be subjective in this matter. Often, Upwork will turn over disputes to arbitration which entails a costly fee.
With the rise of freelancer economy, many companies are finding it profitable to hire through online platforms. The talent pool of freelancers and remote workers on these platforms is bigger and also gives you a wider geographic reach. Moreover, you save on the additional costs associated with hiring an on-site worker like office space, work stations, insurance, etc.
With new marketplaces like Upwork expanding and improving its services to allow easy and efficient connection between clients and freelancers, there hasn’t been a better time to source top performers for your projects online.
Will you be hiring your next graphic designer or copywriter from a digital freelance platform?