Small and even midsize companies outsource tasks all the time. This is because it may not make sense to hire an employee just for web design, bookkeeping, or even marketing. But where can you find this talent? You have two main options: you can contract a freelancer or work with a digital agency.
Neither one of these is obviously the better choice. To decide what would be right for your business, you need to compare the differences between contracting a freelancer vs an agency.
What Is a Freelancer?
A freelancer is an independent professional. When you contract a freelancer, you work directly with the person, meaning you’ll negotiate terms and figure out payment yourself.
Freelancers used to be far less common than agencies, but that has been changing. In 2014, just 4 million people in the U.S. were freelancing full time. By 2019, the number had increased to 57 million — 35 percent of the workforce.
You can find freelancers in various places, including job sites, forums, and freelance platforms. This last option will give you access to a wide pool of candidates. Plus, it’s easy to compare skills, experience, and qualifications and read reviews from previous clients.
How Does a Digital Agency Work?
Digital agencies are made up of numerous professionals who work either alone or together on projects. Each agency functions slightly differently, but they all tend to have set rates for services, meaning there is no chance to negotiate fees with the individuals working on your project.
Unlike traditional agencies, the professionals at digital agencies work remotely. This allows you to access talent from all over the world.
Pros and Cons: Freelancer vs Agency
Working with a freelancer has its advantages and disadvantages — as does using an agency. When weighing the pros and cons, you need to decide what factors matter most to you.
When you hire freelancers, you take on the role of project manager. If you need just one or two freelancers, this is no big deal. When you have a large team, though, it will be up to you to facilitate collaboration, provide guidance, and authorize freelancers to move onto the next stage of the project.
With an agency, project management is minimal. You can expect the agency to handle strategy and determine what tasks need doing according to your targets and end goal. Plus, you can be involved in the project to exactly the extent you want.
You can expect to pay less upfront when you work with a freelancer. Typically, freelancers set a rate according to the task, which could be a fixed rate for the project or an hourly rate, which is particularly common for ongoing work. You can find a freelancer at almost any rate you want for any task — of course, you’ll receive much higher quality if you pay more.
Although digital agencies are more expensive than freelancers, they are still less costly than traditional agencies, since there’s no need for office space. Sometimes, an agency can even be more cost effective than hiring a freelancer over the long term. This is because you won’t need to dedicate as much of your own time to the project and the risk you’ll need to pay for revisions is lower.
Most freelancers specialize in just a couple skills. Those who are just starting out may offer a wider variety of services, but freelancers who have been in the business several years tend to have a niche. This means you can usually find the exact skills you require for a particular project or task with a freelancer.
The downside, of course, is that it can be more difficult to find someone to carry out a diverse range of activities to a high standard. Instead, you’ll need to hire two or more freelancers. This adds to the time you spend searching for candidates, onboarding, and checking in with workers.
Therefore, if you are looking for a broad range of skills, a digital agency will come out top. All you need to do is request a particular service and the agency will find you someone who has the relevant expertise. This is great if you need help with a project that has many moving parts.
Both hiring a freelancer and working with an agency is scalable. With freelancers, however, it means searching for and interviewing candidates all over again. When you work with an agency, you just need to ask for more hours.
Freelancers have subscriptions to the tools and apps they use most often, but they expect you to provide everything else. If you already have accounts set up for bookkeeping, CRM, and project management, this is not a problem. But if you’d like to receive access to such tools without needing to invest more, an agency is a better option.
When you contract a freelancer, you choose the person you want to work with. Many small business owners appreciate the chance to handpick candidates. If the task requires a large amount of communication, personality could be almost as important as skills.
When you work with a digital agency, you are usually unable to pick the professionals who will be on your team. Instead, the agency assigns you a team according to your needs. Having said that, many agencies do allow you to ask for a change if you are unhappy with the work.
Freelancers know that, if they want to continue working with you — or at least receive a good reference — they need to provide a great overall service. For this reason, they tend to be excellent at communicating and making sure the project fulfills your requirements. If they work in a technical industry or in marketing, they are likely good at explaining concepts to ensure you understand.
Communication with a digital agency is neither better nor worse: it’s just different. You’ll communicate mainly with the owner of the agency to organize the work you need or with a project manager. You may also have regular meetings with the project manager and some other members of your team to discuss progress. Some business owners prefer this approach, whereas others would prefer to have more direct contact with the person working on the project.
As mentioned above, freelancers’ livelihood depends on them providing a great service. Nonetheless, many small business owners have had the experience of a freelancer just disappearing.
Obviously, you need to look out for scam artists who will take your money and run. This is pretty easy to avoid by hiring through a freelance platform, as there is built-in payment protection for both you and the freelancer. Still, a freelancer could always disappear midway through a project. Finding someone who has reviews from many satisfied clients will minimize this risk.
A digital agency will always provide you with a dependable service — provided you do choose a legitimate business. If one of the professionals working on your project leaves for whatever reason, the agency will assign someone else who can pick up the work immediately.
Both freelancers and digital agencies can supply you with high quality services — provided you make the right choice and are willing to invest.
Quality problems with freelancers tend to happen when you pick someone who is charging significantly less than average or who works with many other clients. Some professionals even do freelance work on the side of a full-time job.
As for agencies, quality can be lower than you hoped for if the agency decides your project is too small to be worth much time. Finding an agency that specializes in providing services for small businesses or entrepreneurs can help you avoid this risk.
As a digital agency can always find someone to take on your project, there is often greater flexibility. Should an urgent task crop up, there will likely be someone available at the agency to finish the work in time.
Freelancers are less flexible. They have other commitments, which mean they are only available for certain hours of the day (which may not even match your business hours, especially if you’re in different time zones) and for a certain number of hours a week. If you do ask a freelancer to take on work with little notice, the quality may be lower.
How to Make the Right Decision for Your Business
There’s no clear answer to what is better: freelancer vs agency. Typically, if you have a small project that just involves a couple specialist tasks, a freelancer is going to be your best bet. However, if you need support with complex projects and you’d rather dedicate your time to core business activities than managing a team, a digital agency could be a better choice.
Something else to bear in mind is that, as time goes on, your needs may change. For instance, startups can often find all the expertise they need in a couple individuals, whereas growing businesses may prefer to gain a wider variety of skills from a digital agency.
Whatever you choose, decide before you start your search. Otherwise, you’ll be overwhelmed by the sheer number of options!