How to Hire for Your Online Business
July 29, 2021
Growing your online business is exciting. Watching all your metrics rise and your business blossom is a great feeling — almost intoxicating.
With growth, however, comes more work and the need to hire additional staff. Hiring can be a daunting task if your business started out as a one-person operation. It raises a lot of difficult questions such as which tasks to hire staff for and whether to hire permanent employees or freelancers.
It’s normal to stress over the prospect of hiring and managing staff, especially if this is something you’ve never done before. Hiring and retention decisions are a common challenge for entrepreneurs. The SBTA 2021 Small Business Trends Report notes that recruiting and retention make up the second biggest non-COVID challenge for small businesses.
One reason for this is that delegating tasks to others can make you feel like you’re losing control of your business. Yet it doesn’t make you any less of an entrepreneur — hiring is a skill like any other; one that needs to be learned and practiced.
I’ve been in charge of hiring and managing staff at multiple online businesses and have helped grow burgeoning software companies LandingCube, Fatcat Apps, and Flamingo from the ground up. From these experiences, I’ve learned valuable lessons about which tasks to hire for and how to hire in a way that doesn’t hamper growth.
Read on as I discuss the benefits and drawbacks of hiring freelancers versus in-house employees, the hiring needs of different business types, and the most common hiring mistakes online business owners make.
Freelance or In-House?
One of the primary decisions you’ll have to make when hiring is whether to contract a freelancer to do a job or hire a permanent in-house employee instead.
A lot of business owners, particularly those whose businesses started out as one-person side hustles, make the mistake of only hiring freelancers. This mistake often stems from a fear of committing to managing permanent staff.
On the other hand, it’s also common for new businesses to go too far in the opposite direction, hiring more permanent staff than necessary. In doing so, they inadvertently create a bloated company with excessive recurring expenses.
Getting this hiring decision right is key to growing your business and keeping it profitable. Let’s compare some of the advantages of hiring freelancers and in-house staff.
Advantages of Freelancers
The biggest advantage of hiring freelancers for your business is that there’s no long-term commitment necessary. You only pay them when you need a task done.
That means no paying for sick leave or holidays. No staff on the payroll when you’re in between projects or when there’s no work to be done.
You also don’t need to be hassled by HR issues, which a lot of entrepreneurs dread.
Whereas the freelance route allows you to hire people with niche skills suited to whichever specific task you need completed, hiring in-house staff may put you in the position of having to wait for employees to adjust to tasks they have no previous experience with.
Advantages of In-House Staff
Hiring your own staff and keeping them on the payroll is more expensive in the long run, as it’s a recurring expense, which you continue to pay for during downtime or days with low productivity. You also have to manage costs related to training, vacations and providing necessary tools to complete work.
The payoff is that you can generally expect higher-quality work, as in-house employees are more likely than contractors or freelancers to be invested in your business and the outcome of their work.
You’re also going to get more consistent work from in-house staff — this is particularly important if you need a consistent tone (for blog content, copywriting, email marketing etc.) or if you have a product that needs ongoing work (such as software). While you could always try to attain this consistency by continually hiring the same people for your jobs on a freelance basis, there’s no guarantee that they’ll be available when you need them.
Also, though permanent employees are an ongoing expense and are likely to cost more over time than freelancers, they actually cost less on a per-hour basis (or per-word, per-project). This is because you’re offering them stability.
Due to this, many freelancers need to charge a premium price for each project because there’s no guarantee that work will be there next week or next month. The promise of continued employment will allow you to get more words, code, or support tickets for your money.
If you’re looking for a clear answer to the question of whether freelance or in-house hiring is better, you won’t find it here.
The truth is that because of the sheer number of business types that exist, there are some cases in which hiring freelancers is best and others for which in-house staff are better suited.
This list should give you an idea of the various jobs you may need to hire someone for in your business:
- Frontend coding
- Backend coding
- Content writing
- Content editing & publishing
- Keyword research & SEO
- Sales copywriting
- Email marketing
- Running paid ads
- Customer support
- Managing orders
- Product sourcing
- Product listing
- Graphic design
- Video production
- Video editing
- Product photography
There are plenty of jobs that are not included in this list — some that can be handled by a virtual assistant (VA) and others that require more specialized skills.
The main points to consider when deciding whether to hire someone on a freelance or permanent basis are as follow
a) The type of job that needs to be done
b) The nature of your business
The Best Hiring Strategies for Different Business Types
As a general rule, the most critical tasks for your business, especially those that are ongoing, should always be done by someone in-house. One-off tasks can often be contracted out.
Here are some helpful hiring ideas for some of the most common online business types.
Software
With a software business, your code is your product. Companies are making a big mistake if they’re contracting out all of their coding to freelance programmers.
Hiring a freelance software developer might save you the overhead of having a permanent developer on staff, but it’s dangerous for the long-term success of your company.
If your developers don’t have a major vested interest in the company doing well, you may not get the attention to detail necessary for creating a robust, bug-free product.
You’ll also run into problems maintaining and updating your product. Software production rarely ends when you ship the first version. Bugs come up that need fixing and updates are often necessary to keep up with the competition.
Failing to maintain the product is a death sentence, and having different freelancers work on your code each time a bug fix or update is necessary will inevitably lead to a messy product under the hood.
This point bears repeating. Unless you, the founder, are in control of the tech side of things, always have a programmer on your roster.
Aside from programming, customer service is another task you’ll want performed by a permanent member of your staff. Possessing a superb understanding of your product is crucial in providing good support, so you’ll need someone who has plenty of experience answering questions about your product.
Many software businesses underestimate the value of quality support — it can be the deciding factor in the commercial success or failure of your product.
E-Commerce
There are many ongoing tasks in e-commerce that freelancers are ill-suited for.
Logistical jobs, such as managing orders, building listings, and dealing with customers should be done in-house. You should also have a permanent employee, one who knows your product back to front, assigned to focus on your major sources of traffic, whether they be Facebook and Google ads or email marketing.
Smaller, sporadic jobs like graphic design, content writing, or coding for your website can usually be contracted out. Just ensure the critical day-to-day jobs are handled by someone on your team.
Affiliate & Content Sites
Unlike E-commerce sites, content sites are generally smaller and easier to run as a one-person business. There are fewer ongoing, critical tasks that necessitate the hiring of a permanent employee.
Basic affiliate sites can be run well even when all of their content is being written by freelance writers or content writing services. Such setups require little work from those who run them, only a few hours per week creating content briefs and publishing posts.
If, however, your site is larger than average or requires more in-depth/technical content, you should strongly consider hiring permanent staff. For example, sites that generate revenue from high-value affiliate commissions — products with prices that run into the hundreds or thousands— will need writers who have expert familiarity with the industry. Relying on freelancers to write content at this level is a costly mistake.
Common Hiring Mistakes
Now we’re going to take a closer look at the most common hiring mistakes companies make. By learning about the pitfalls you should avoid, you can accelerate the growth of your business and build a company that’s more attractive and valuable to potential buyers.
Hiring freelancers for vital business tasks
Failing to hire permanent staff for crucial tasks that make or break your business is perhaps the best way to stunt your company’s growth.
The problem is that when you hire a freelancer for a task, this task is likely just one of many to them. After completing it, their interest in your business is finished. This means that you’re unlikely to get the kind of full-process diligence you’ll need for tasks that are central to your business, and that can have a significant detrimental effect on your company.
As mentioned earlier, tasks like coding for a software business, driving traffic for an e-commerce business, and developing high-level technical content intended to boost sales are best handled in-house.
Hiring too many permanent employees
It’s quite common for business owners to overdo it, to hire too many permanent staff members.
While this can result in a deep and diverse team, it can also translate into steep recurring overhead costs.
Such expenses can prove difficult to reduce even when necessary, such as when revenue drops, when staff aren’t producing results, or when a business model pivot is required. Being overloaded with more permanent employees than are necessary can also hurt your chances of selling your business for a fair price.
Not hiring anyone at all
It’s also a big mistake to go too long without hiring anyone at all. You can get into a position where you’re stretching yourself too thin, and as a result, not giving each job the attention to detail it requires.
Some small businesses can be run as one-person operations, but to scale up, eventually every business needs to pay for outside help.
Poor interview/vetting processes
Beyond making the right decision on whether or not to hire someone, you need to ensure you hire the right people.
When hiring for permanent positions, interviews need to be thorough enough to instill confidence that your new hire will add value to your business.
As part of the hiring process, you may also want to consider hiring applicants on a conditional basis initially, such as for small jobs or a short term contract, before deciding whether or not to add them to your permanent roster.
Follow similar guidelines when hiring freelancers, as the sales pitch they give doesn’t always match the quality of work produced. How much you should screen freelancers before contracting them to perform a job depends on the size of the task. An 800 word blog post won’t require much pre-screening, but if you’re hiring someone to code your website or produce an e-book, you should get examples of their previous work, such as websites they have built or pieces of content produced.
Lack of onboarding or SOPs
The hiring process doesn’t end when you send a job offer and the candidate accepts. You need to help your new employee integrate themselves into your business and get up to speed with all the tasks they need to perform.
Onboarding means teaching your new hires about company expectations and conventions. This includes teaching them how to use any tools that are a part of your company’s workflow — examples include Slack, Trello, and Asana.
Additionally, you should have a robust list of standard operating procedures (SOPs) that give clear guidelines on how tasks are to be completed. This will help your staff settle in and begin to provide value. It will also help reduce the growing pains that result from staff in the same company not being on the same page.
Paying budget rates while expecting premium results
The classic adage “You get what you pay for is true — particularly in hiring. Don’t expect the best if you’re only willing to pay marginal rates.
There are, however, some exceptions to this rule. Bargain hires can be found, for example, in areas with a low cost of living such as Asia and Eastern Europe. That said, as businesses increasingly move to implement remote work models, the most talented of these workers are sure to start getting more lucrative offers which will no doubt leave fewer bargains to be found.
If your business is not making enough revenue to afford market rates, consider carefully whether or not you really need to hire someone. If all you can afford is a budget rate, you may need to do the work yourself for the time being or accept a lower standard of work.
Hiring For Online Businesses – Final Thoughts
If you harbor dreams of building your online side hustle into a full-time business or selling it for a large sum, you’re eventually going to need to think about hiring.
A lot of time and money can be lost by making mistakes in the hiring process, such as by hiring the wrong people or contracting out the wrong jobs.
Over and under hiring are common pitfalls both of which can negatively impact your business.
If you follow the tips outlined in this post, you’ll boost your chances of growing a strong and sustainable business.
