Episode 122

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One of the most common challenges agencies of all sizes are facing right now is the finding the right people to add to the team. Client budgets and programs are growing, new business is getting a little easier and so everything should be rosey. But when you don’t have the right team to get the work done – it’s frustrating and frightening.

10-15 years ago the prevailing attitude was that agencies needed everyone under one roof. After all the work is so collaborative. But when the recession hit and people had to reduce fixed expenses to survive, many agencies who swore they would never use freelancers or hire someone virtual crossed over and did just that.

That’s why I was so interested in talking to Nathan Hirsch, the co-founder and CEO of FreeeUp.com, the hands-on hiring marketplace connecting hundreds of online business owners with reliable, pre-vetted remote workers. Nathan can also be found on leading podcasts, such as Entrepreneur on Fire and Eventual Millionaire, speaking about online hiring tactics.

If you listen with an open mind and a willingness to consider something different – I think you might get some interesting ideas about your own talent pool.

 

 

What you’ll learn about in this episode:

  • Remote workers give business owners an opportunity to level up their talent at a cheaper cost than traditional employees
  • The advantages freelancers bring to agencies
  • The idea of creating your own marketplace with your freelance pool so they compete with each other and always deliver their best work
  • How the freelance business is changing and freelancers have their own team working for them
  • Why Nathan believes you should pay freelancers on an hourly model
  • How Nathan’s company Freeeup helps its freelancers work with agencies so everyone wins
  • Minimizing risk when working with freelancers and what Freeeup does to make its freelancers less risky than other freelancers
  • Structuring interviews to weed out the wrong freelancers before you start working together
  • Tools to work more effectively with freelancers and virtual employees
  • The pros and cons of having your employees work remotely
  • Creating a feeling of collaboration and teamwork when your team doesn’t see each other regularly
  • Why allowing an in-office employee to go virtual rarely ever works
  • The importance of diversifying when you’re hiring

The Golden Nuggets:

“Not every project goes as planned. It’s good to have freelancers that you can turn to in a worst-case scenario in order to complete projects on time.” – @realNateHirsch Click To Tweet “Give a freelancer a small project to start with. Once they’ve proven themselves, you know you can trust them with something more important.” – @realNateHirsch Click To Tweet “Things change in a project, so you should pay freelancers on an hourly model. It’s not their fault when something changes, and they deserve to get paid for their time.” – @realNateHirsch Click To Tweet “You can have a great culture with a remote team, but it has to start at the top of the company and trickle down.” – @realNateHirsch Click To Tweet “Look for remote employees that know the pros and cons of being remote and still want to work that way.” – @realNateHirsch Click To Tweet

 

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Speaker 1:

If you’re going to take the risk of running an agency, shouldn’t you get the benefits too. Welcome to Agency Management Institute’s Build a Better Agency podcast presented by HubSpot. We’ll show you how to build an agency that can scale and grow with better clients, invested employees and best of all, more money to the bottom line. Bringing his 25 plus years of experience as both an agency owner and agency consultant. Please welcome your host, Drew McLellan.

Drew McLellan:

Hey, gang. Welcome back to another episode of Build a Better Agency here every week, we try and give you some new ideas to evolve your agency to where you want it to be. So, it serves you and your family, and your employees, and your clients in bigger and better ways. And I think you’re going to love this conversation today. It is around a topic or actually two topics that I know are burning issues in most agencies. The first one is going to be, we’re going to dig into the idea of finding and hiring good contract labor or freelancers when they don’t live in your neighborhood. When you’re not going to see them eyeball to eyeball, how do you find them, and how do you vet them, and how do you know they’re going to be good, and how do you create relationship with them that serves everybody and is a win-win. And also the whole idea of remote workers.

So, employees that don’t live in your neighborhood. For many agencies, this is a growing challenge. And many of you have put your foot down and said, not going to do it. And many of you have put your foot down and said that, and then six months later had to do it. So, we’re going to talk about all of that. So, let me tell you a little bit about our guest. So, Nathan Hirsch is a serial entrepreneur and an expert in remote hiring, and e-commerce. He’s been selling online for a really long time and has sold millions and millions, over $25 million worth of product through his e-commerce business. But now he is also the co-founder and CEO of freeeup.com. And there’s an extra E in that. So, it’s F-R-E-E-E up.com. The hands-on hiring marketplace, connecting hundreds of business owners with reliable pre-vetted remote workers.

So, they’re really working on redefining how businesses are able to hire remote freelancers online. You may already know about Nathan. You may have heard him on podcasts like Entrepreneur on Fire, Eventual Millionaire, and lots more. He talks all over the globe about online hiring tactics. And so we’re going to dig right into that. Nathan, welcome to the podcast.

Nathan Hirsch:

Drew, thanks so much for having me.

Drew McLellan:

So, we live in a whole new world of employees and contractors, don’t we?

Nathan Hirsch:

Yeah, it’s completely different. I mean, even from when I started my first company, when I was in college, I didn’t learn about remote workers until years later. And once I did it really opened up my eyes for all the potential. Because back in the day, when you could only hire people that would actually go to your office that you could see, you were really limited to the people in the towns and the towns around you. And you’re also competing with all the other business owners for that same talent. Whereas now when you’re hiring workers from the Philippines or India or across the US. You really get access to a lot of talent at market rates or below market rates, because you’re not competing with all those same businesses for the same talent that live in the same area.

Drew McLellan:

Well, and you are in many cases, affording someone the opportunity to work the way they want to work, which is from home or remotely.

Nathan Hirsch:

Yeah. I mean, that’s really what freelancers are. They’re running their own business just like I work, I own two remote businesses. I work in my pajamas a lot. I mean, they get to do the same thing. They don’t have those extra expenses, like gas money, and fancy clothes and stuff like that. So, you’re really giving them a lot of leeway to do what they love and really enjoy what they’re doing. And it can really lead to a positive experience for both parties.

Drew McLellan:

And I think agencies have been in some ways fast to this party and in other way is slow. So, I think agencies historically, especially small to mid-sized agencies. So, agencies with a few hundred employees or less. They’ve always had to rely on some sort of strategic partner somewhere along the way. So, back in the day, when I started in my career, you would rely on videographers and folks like that when you had to shoot a TV spot because many agencies, unless you worked for one of the big box agencies, they didn’t have that on staff. And so in some ways, a lot of people, a lot of the agency owners that are listening to us have grown up with the idea of outsourcing. But they’re more used to outsourcing to another company who does something they don’t do as opposed to augmenting their in-house staff with contract labor or in some cases, a remote employee.

So, go back to before the recession, a lot of agency owners really believed that they wanted their talent under the roof. That the work is collaborative. We work better when we’re all hunkered around a conference room together. And many agency owners pre ’07, ’08 were adamant that they were never going to have remote employees and that they were going to be “full service agency.” Meaning they had everything in house. But the recession forced them to rethink that because for many agencies just survival meant they had to really downsize, but they still needed to serve the clients that they kept. So, in the context of that, this is relatively new for most agencies and coming out of the recession, they kind of liked having the variable cost of a contractor or a remote hire as opposed to having a W2 employee. But now they have to figure out how to do it well. And I think that’s the state that we’re in today in agency land. Is that true for most of your clients?

Nathan Hirsch:

Yeah. And I work with a lot of agencies and I think what some agencies don’t realize until they really get into the contractor field is a lot of times you need a backup plan. I mean, not everything, every project you do goes as planned. You have clients that want to push up deadlines. It might be unreasonable that you’re trying to make a really good impression of, and if an employee quits or you’re handling too many projects at once, you really need that extra manpower. So, I’m always encouraging clients to have some kind of backup plan, whether it’s having some graphic designers that you have on call or some web developers or some content writers, even if you don’t use them all the time, just building those long-term relationships so you have someone to go to in the worst case scenario.

And a lot of those times you can start using them more and more. You can get them more regularly. I’ve even had clients that buy them out and turn them into employees they liked them so much. And a lot of times it helps you get a really good employee, because you use that contractor for a while here and there and you know what they can deliver. So, there’s a lot of benefits to having the contractors, even if you’re not using them as consistently as some other agencies.

Drew McLellan:

So, one of the things that agency owners will say, when we talk about this topic is, yeah, I get it, but our clients are so last minute and our work is so last minute that I feel like I have to have someone in house because the client calls it three and we have to have it by six and the contractors have other work. And so we’re not a priority et cetera, et cetera, et cetera. How do you help your clients bridge that gap? Because the reality is their clients aren’t going to all of a sudden ask for things two weeks in advance.

Nathan Hirsch:

It’s true. I mean, there’s pros and cons on both end. I mean, if you have an employee and they run out of work and then you’re paying them to do nothing. So, it’s the pros and cons of each one. Like I said, I kind of encourage you to, don’t have one graphic designer in your back pocket, start building a relationship with two to three, three to four. And then when you have a project, I mean, I have clients who have a Skype group of all their graphic designers, all their writers, all their Amazon experts, whatever it is. And whenever they have a project, they’ll throw it in there and be like, hey, can anyone complete this in the next 24 hours, in the next 12 hours, whatever it is. And someone will say, I can. And they get the project. So, there’s more creative ways now that we have Slack and Skype and Trello and all these different ways to organize these remote workers, to really have more control over the situation and give yourself that ability to not be pushed behind by some other client that’s assigned to work right before you did.

Drew McLellan:

That’s an interesting idea, the idea that they all know about each other, and you’re basically creating your own little marketplace.

Nathan Hirsch:

Yeah. And the other thing to keep in mind is these freelancers are really growing their own business. They’re almost like mini agencies. So, a lot of freelancers are solo, but they’re also starting to see a lot of these freelancers that have assistance. They have their own team of workers whether they’re employees or contractors. So, if you find someone that’s reliable and you should still hold them to a high standard, regardless of whether it’s them or their team. A lot of times they can now account for those last minute projects whereas before they can’t. And I have a lot of freelancers in my network that they offer their service on the FreeeUp Marketplace, but they’re also clients as well. And they’re building a team, a combination of their own outside employees, outside workers, plus some FreeeUp workers. And they’re using that to really offer a great service to their clients. So, times have really changed from that solo freelancer that really came about not even five years ago.

Drew McLellan:

So, if an agency wants to begin to cultivate relationship with let’s just stick with graphic designers for now, just as an example. How does an agency do that? How do they begin to court or create a connection between graphic designers? So, they could eventually have a pool of three or four that allows them to do what we’re talking about. Sort of throw a project into the pit and see who wants to take it.

Nathan Hirsch:

So. It’s funny. I was talking at CEO Space last week and I sat down at a lunch table and I had a few different people come up to me and they were like, I keep getting screwed over when it comes to projects. I’ll hire this developer and they’ll say, hey, I can complete it in two months and at the end of that, it’s a mess. And I’ve wasted all my time and money, and I don’t trust hiring people anymore. And I really told them to kind of take a different approach, give people small projects, even if it’s not something very important, even if you have to pay them for it, give them a small test project here. Once they prove themselves a little bigger one, a little bigger one. So, that when that crunch time comes and you had that top-notch client that has a last minute deadline, and you need someone reliable you know who you can count on.

And the same thing goes, whether you’re hiring writers or graphic designers or developers, or whatever it is, really giving them small tests and having them build up that trust over time, even if it’s a project here and then three weeks later, it’s another one here will help you really gain a good understanding of who you can count on and who you can’t. And sometimes you might hire four graphic designers and only two of them really come through for you. But then you have two in your back pocket going forward that you can really count on in the future.

Drew McLellan:

And what do you believe is the most, I was going to say reasonable, but what’s the right way to work with a freelancer? Is it a hourly model? Is it a flat fee model? What do you think is a best practice around that?

Nathan Hirsch:

So, I started FreeeUp as an hourly model. I kind of prefer that because a lot of times things change. I deal a lot with e-commerce clients and agencies. And I mean, you never know when some software is going to change and it’s not necessarily the freelancer or the worker’s fault, but they deserve to get paid for their time. So, we set it up to any meetings, phone calls, all that stuff is billed time, and it’s pretty straightforward. And the workers can still give estimates and still get approval before working, which is similar to the fixed price model. But you’re also factoring in the other thing they can come about. With that said the freelancers are really running their own business. So, we give them the option to offer fixed prices when they want to. And a lot of that depends on the client as well.

I mean, you’re in to clients where the fixed price model works beautifully. They can agree to terms, the scope doesn’t change. You can offer it, both sides are happy, and you can continue doing work. Sometimes you’ll find clients that they are a little bit more unreasonable. Things come up and they don’t factor them in, or the freelancer might not be advanced enough to really define a scope and what it includes and what it doesn’t include. So, having that fixed price sometimes leads one party to be unhappy. So, I kind of encourage people, although they can do whatever they want to start off hourly. And once you build that relationship and know what a client’s really like and advance your freelancing career, then offer fixed price packages for things that you know both parties will be happy with the end result.

Drew McLellan:

I think that’s one of the reasons why agencies are so hesitant to get into bed with the idea freelancers is because typically they’re going to go to the freelancer and say, how long is this going to take? Or what’s it going to cost? They turn around and they give the client a number. And then it’s tough for an agency to go back, even though they’re often justified because the client has changed the scope or whatever, to get the client to agree on the number. So, a lot of times the agency ends up taking a haircut on working with the freelancer. I think that’s one of the challenges in the model.

Nathan Hirsch:

Agreed, and we try to minimize that as much as possible. We have a lot of best practices that we preach to the freelancers, and it’s really designed to have them earn more money and make clients happier. But one of those is just overestimating. So, if you’re giving a scope of a project, first of all, go in, do an evaluation, even if that’s just billed time, going through top to bottom, asking questions, getting all the information you need to give a good estimate and then overestimate and give an ETA and overestimate that ETA so that you’re always coming through on top. And that one time where something comes up and something might have gotten left out by accident, you still hit those deadlines. So, if you’re giving agencies quotes or estimates or deadlines, and you’re overestimating consistently, those agencies are still going to be able to turn a profit and a lot of times you’ll even make more money, which makes them happier and makes you use you over and over and over again.

Drew McLellan:

Yeah. So, in terms of confidentiality and what kind of documentation is appropriate and a best practice between an agency and a contract labor folks, to make sure that both sides are protected?

Nathan Hirsch:

Yeah. I mean, there’s always going to be risk. Even if you hire your best friend to sit right next to you, there’s always a chance that person does something stupid, jeopardizes your information, your client’s information. So, knowing going in that there is always a risk. We do everything possible to minimize that risk. I mean, I can only speak for the FreeeUp network and it’s very hard to get in. We take the top 1%. Once they’re in, they like being in, because we bring clients to them and they don’t have to apply to jobs all day. So, it’s in their best interest to keep clients information secure and keep the clients happy because if they do anything otherwise, they can get kicked out of the network and lose all their clients and their entire source of income. So, I mean, I’ve been doing this for eight years.

I’ve never had one security issue. I’ve been doing FreeeUp for eight years from my first business. I’ve been doing FreeeUp for two years and I’ve never had really any issue. And I’m sure that if I bill enough hours, eventually I will. But as a whole, you have to remember that these freelancers, these contractors care a lot more about their reputation, running their business than they do about stealing your information. And yes, we have an NDA that’s part of our agreement with the workers. You can definitely get your own and make sure it protects you and that it’s clear. But at the same time, are you really going to chase someone down across the Philippines to get this information back? Maybe you will, depending on how it is. So, a lot of it is looking at the big picture and where you hire the workers from, and focusing on what we’ll talk about in a little bit, which is how you actually vet these people, which is a lot more important than the actual agreement that you have in place afterwards.

Drew McLellan:

Well, and I think it also the whole issue of copyright and who owns what, and all of those things needs to be carefully outlined to make sure that there is a chain of possession around work that’s created.

Nathan Hirsch:

Absolutely. I agree. When you’re coming to that stuff, it should be very clear who owns what? And a lot of times, if it’s not said, the contractor owns it, that IP or that copyright. So, if you are looking out for yourself and looking out for your clients, it’s a good idea to get that in writing and make it clear. And I mean, if you don’t want to go the full legal route and hire a lawyer, at least get it in a Skype confirmation or an email where they confirm it, and there’s some kind of written proof.

Drew McLellan:

I think, again, this gets back to making sure that you have your ducks in a row and have proper documentation. So, again, confidentiality, no competes, all of that sort of stuff have to be in place. And I would encourage agencies to make sure that A, they should be having that with their employees. So, all you have to do is modify that document. But B, it’s really critical to be paying attention to things like copyright. And if you have not listened to the podcast episode that I did was Sharon Toerek a while ago, that would be a good one to listen to.

She’s an IP lawyer that specializes in agencies and she’s got it all down, rock solid. So, go back and listen to that one if you’re feeling like your documentation is not in a great place. So, all right. So, let’s talk about vetting. So, there’s a bazillion freelancers out there, there’s your service, as I’m sure you know, there are other services plus that are out there on their own looking for work. How in the world as an agency know and figure out who’s good and what they’re good at, because not everybody’s good at everything of course?

Nathan Hirsch:

Yeah. So, what I’m looking for is three things. I’m looking for skills, communication and attitude. If you think about it, almost every bad experience you’ve had hiring either comes down to their skills, weren’t what they said they were, they had a terrible attitude and they brought it down and they weren’t enjoyable to work with or they didn’t care. Or their communication was bad. You had to chase them down. You didn’t get updates. They couldn’t estimate hours, stuff like that. So, when you really break it down and you focus on these things, you have a lot better experience. For skills I’m looking for someone that has a track record of success. Someone with references, someone who really knows what they’re doing. That isn’t coming in as a newbie. I mean, we’re not a marketplace for newbies. We want the people with the talent.

For the attitude we’re looking for someone that has a positive attitude. That’s passionate about what they do. If they’re a graphic designer, they love graphic design. If they’re a bookkeeper, they love doing numbers and running the books. They care a lot more about what they’re doing than they do about the paycheck. And lastly communication. And for me, that’s the most important. People that’ll give updates. People you don’t have to chase down. People that if their house is burning down and they can’t get to your project, you’re at least getting a text message, a hundred percent of the time. And all that is very important. And a lot of times when you can’t vet one of those, it’s very important that you focus on the other two. You see that a lot of times with solo entrepreneurs, they need to hire someone for their Facebook ads.

And they don’t know anything about Facebook ads. And so they might not be able to vet the skill as well as someone that’s running a Facebook ad agency. But you can focus a lot more on that attitude and communication. And if you do a good job on vetting for those, you’ll normally run into an honest person, that’s going to tell you the truth about their skills. So, for me, I’m focusing on all three. And a lot of times when you have a bad experience, it’s because you were really just focused on the person that had the skills. But you weren’t focused on the person with that attitude and communication that went with it.

Drew McLellan:

So, I cannot draw a stick person and have it look like a stick person. But I, in theory, could grab a bunch of work and I could build an online portfolio. And I could say that I’m awesome at graphic design. Not that I’m suggesting people who are freelancers at graphic design have the lack of skill that I do. But there are people who hold themselves out to be more talented or skilled than they are. How do you guys vet that and how should agencies vet that?

Nathan Hirsch:

There’s a front line and there’s a back line. The frontline, the entire interview is really designed as a trap. You’re really looking for red flags. I mean, a lot of people think that when you’re interviewing someone, you’re looking for the right answers, which to me is backwards. People learn how to interview. I took a college class once on how to interview and it didn’t teach me how to do well at the job. It just taught me how to answer questions correctly. So, a lot of times when you’re looking for red flags, you should design your interview questions to pull out concerns on those three things. For skills, I like to ask people to rank their skills from one to 10, just as a baseline, because to start off the interview, that’s a good way for me to understand what they think they are.

And then as we dive deeper and deeper into it, I can usually tell if they’re telling the truth, based on those things. If they’re telling me, they’re a 10 out of 10, and they’ve