The differences between consultants and freelancers can appear confusing at first. The terms are sometimes used interchangeably, and both provide services on a project-by-project basis.

However, despite the similarities, there are significant and crucial differences between the two. To get the right person for the job, it’s useful to understand the distinction.

Utilising contractors can be a smart business choice. It’s often easier, faster and cheaper to hire expertise for a specific job. Australia’s freelance economy now has over 4.1 million workers in its ranks –that’s one-third of the workforce, so there’s no shortage of labour available.

But, whoever you hire, clear guidelines are needed for a smooth project.

What is a freelancer?

When hiring a freelancer, it’s usually for a specific short-term job. For example, it could be designing a logo or writing a brochure. After taking initial direction from the client, freelancers will use their own tools and resources, usually working from home.

Once the service or job is complete, the relationship ends – until the next one comes along. Simply put, freelancers will:

  • deliver an output or product
  • for multiple clients at the same time
  • for short periods
  • from home (maybe with a client visit)
  • directly (rather than through an agency)
  • often without a contract but with agreed terms
  • with specific experience.

Freelancing is common in professions such as journalism, writing, copywriting, computer programming and graphic design.

What is a consultant?

Hiring a consultant means you are looking for in-depth guidance on a specific area of expertise, usually for a more extended period.

For example, you might hire a social media consultant to provide advice on the right strategies for your annual marketing plan. The consultant might conduct competitor research, organise focus groups, and oversee the development of an ad campaign.

In a nutshell, consultants are there to:

  • deliver expert advice
  • for one (or more) clients at a time
  • for an extended period
  • at the client site or from their company offices
  • directly or through a contracting company
  • with a strong contract
  • with relevant professional qualifications and specific experience.

You can hire consultants for projects in financial and strategic planning, marketing and research, training, and law.

Pros and cons of hiring independent workers

Pros – sometimes you need to get a specific job done or relieve the pressure on your full-time employees. Also, there are potential cost savings, like office space, equipment and employee benefits. And it’s flexible – you can hire them on an as-needed basis, and you get the benefit of skills without additional training.

Cons – you’ll have less direct control over priorities, deadlines and the methods used. Contractors will not always be available when you need them, and once they have finished the job, you’ll lose their skills from your team. 

What are the legal requirements when hiring a freelancer or consultant?

Especially when hiring a consultant, it’s preferable to draw up a contractor agreement. This agreement will outline terms and conditions for the services they will provide to you. Items to be covered include:

  • detailing the outcomes required, project timing and terms of payment
  • protecting ownership of completed work
  • agreements about confidential information needed for the project (e.g. customer data)
  • what to do in the event of a dispute about the work
  • how to terminate the contract
  • details of insurance.

For a freelancer, a contract is not usually required, but it is good practice to have a set of agreed terms, such as a brief or quote, before the project begins.

There are other legal issues to consider, including:

  • Public Liability, which covers claims by the public for damaged property, injury or losses as a result of the actions of your contractor.
  • Professional Indemnity, which covers you for claims made against your contractor for losses due to inadequate recommendations.

Finally, you want to make sure you have an ‘arm’s length’ relationship with any freelancer or consultant, to prevent incurring superannuation and other obligations.

Tips on working successfully with freelancers and consultants

  1. It’s important to be very specific about what you need – the clearer your terms, the better the outcome.
  2. Give constructive feedback fast, so your freelancer can fix any issues and deliver the finished item quickly.
  3. Pay invoices on time and be generous. Unsurprisingly, you get what you pay for, so if you are paying below standard rates, don’t expect perfection.
  4. Recommendations go both ways – if you get a reputation as an inefficient payer or a difficult client, it will be harder to get the best professionals to work with you.

How do I find a freelancer or consultant?

There are plenty of websites where you can hire freelancers to do quick, specific jobs. Websites like UpWork and Fiverr speedily match your job description with available freelancers – but be aware that quality varies wildly, which is a reflected in the fees.

A better place to find professional freelancers and consultants is through LinkedIn where you can see details of their previous jobs and recommendations about the candidate from their clients.

Another safe option is to go through an agency specialising in the required field, giving you quality assurance and a competitive but fair rate expectation.

While freelancers and consultants are similar, in that they are temporary and skill-specific, they serve different purposes in your business. Neither is superior to the other, but knowing the distinction will save confusion when it comes to finding the right person for the job.