In this episode James Mackay shares the 4 biggest mistakes new outsourcers make post launch and how they can be easily avoided.  Check out http://outsourcing101course.com to sign up for The Free Outsourcing 101 Course that includes video tutorials and much more! 

Hello my fellow and future outsourcing friends.  I am James Mackay – your host – and I would like to welcome you to another episode of the Outsourcing 101 Course Podcast.  Last time we talked about managing freelance workers.  In this episode I am going to discuss the 4 biggest mistakes outsourcers make.

Generally I like to stay positive when I’m talking about the concept of outsourcing.  I like to mention things that you can do to enhance your experience when looking for freelance workers.  Or I might offer suggestions on how to make things easier, or faster.

But today I want to give your 4 things that you should avoid, or at least be aware of.  If you can follow these red flag items then you should be able to avoid some of the pitfalls that trip us up when we are looking to outsource.

The first thing I want to draw your attention to is knowing the difference between ongoing roles and one off tasks.  It may seem inconsequential but in the long term, it makes a very big difference.  Here’s an example:

If you want something done quickly and of a high standard, you might be prepared to pay a higher price for the privilege.  But that’s like anything, right?  If you want an express service, there’s often a surcharge.  However, if your job is longer term and you’re looking to establish a long term relationship with a freelancer, then you should be able to negotiate a rate different to the one that the freelancer might advertise on their profile.

This might not sound fair on the freelancer, but in the long run it suits both parties better.  Freelance workers often have to do a lot of background work for jobs and often they don’t get paid for that research.  Further, sometimes workers can go long periods between jobs – just as any contractor can – and that’s why their rate per hour might be higher than what you would expect.

If you can show the freelancer that you are in a position to hire them on a longer term basis, they might be able to adjust their rate accordingly.  They don’t have to keep doing unpaid research to become acquainted with the new project, and they have some guaranteed work coming in.

Another mistake that outsourcers make is not defining the ownership of the work that has been produced.  Generally speaking, if you pay someone to perform work for you, then you maintain ownership rights to the work that was produced.  But I have seen grey areas in this pop up all the time.

Sometimes there are disputes and misunderstandings about who owns what, despite general knowledge would dictate.  As an example, you might hire an ebook author to write an ebook for you.  Generally you would own the ebook but unless it’s specifically stated, you would not own the notes, drafts, research and other supporting materials that the author might have compiled in producing the ebook.  In fact, there would no doubt be a dispute over this; some people would say you do, others would say you don’t, because you only had a contract for an ebook.

But the good news is that this can all be easily avoided by drafting a “Transfer of Ownership” agreement so both parties know exactly what is what.  It’s not mandatory but it might just solve a problem down the track.

Another legal issue is the matter of non-disclosure agreements.  Honestly, the number of times I have heard people mention NDAs when doing outsourcing blows my mind.  It’s this easy: if it is absolutely essential that you have a non-disclosure agreement to protect you intellectual property, then only hire someone in your own legal jurisdiction.  That way you can follow up appropriately. 

I roll my eyes when I hear people tell me they got their VA in Bangladesh to sign an NDA.  I mean, seriously – you’re going to chase them through the Bangladeshy court system if they do something wrong?  Get real.

In all the years that I have been doing outsourcing I have only ever had one incidence of breach of trust.  And it was serious.  But I went through the adjudication process on the old Odesk and that freelance worker was made to recompense me for the impact they caused me and he was banned from Odesk.  So they system worked for me. 

Unfortunately, the final mistake I see people make when outsourcing is not firing fast enough.  I know that sounds horrible, but sometimes it just has to be done.

There’s a saying “hire fast, fire fast” and it’s 100% true.  However, to save you from heading into a confrontation which includes firing, you can do things to try to hire the best possible freelancer up front.  A very simple solution would be to give the freelancer a test, to see if they are up to standard.  If they achieve the task admirably, then they might just be the “perfect for you” freelancer.  If not, simply wrap up their contract and don’t give them any more work.

Most outsourcers tell me that every dollar counts.  If that’s the case for you, then you really need to get into the habit of employing good people, training them and shaping them into the type of employee you want them to be.  If they aren’t the right fit, they have to go.

So there you have it.  The top 4 mistakes I see outsourcers make when dealing with freelance workers.  I hope this episode was helpful for you.

Don’t forget to drop by the special webpage we have put together for this episode.  Go to outsource101course.com/17 to get the show notes, including a transcript of the episode.

Thanks so much for joining me and be sure to come back next time when I discuss the top 5 ways to make outsourcing work for you.