Key Performance Indicators: Essential Metrics Companies Should Monitor When Working with Freelancers

Are you a company that works with freelancers and wondering what key performance indicators you should monitor to ensure you’re getting the most out of this collaboration?

Look no further, because you’re in the right place.

This article will break down the most relevant performance indicators to consider when working with freelancers, helping you maximize the efficiency, quality, and profitability of this increasingly popular work model.

“Monitoring the right performance indicators is essential to understand how freelancers are contributing to the success of your business.”

From financial indicators to measures of efficiency and quality, we will cover a wide range of areas so you can get a complete picture of how your freelancers are performing.

So, whether you’re new to freelancing or looking to improve your current approach, keep reading to discover the key performance indicators that companies should monitor when working with freelancers.

Understanding Key Performance Indicators

First, let’s understand what we mean by key performance indicators or KPIs (Key Performance Indicators). In simple terms, they are metrics that help us evaluate how effective an organization, team, project, or even an individual is at achieving their goals and objectives.

They are essential for maintaining an objective and quantifiable record of performance.

For freelancers, KPIs (Key Performance Indicators) play a crucial role in measuring and monitoring their performance. KPIs can encompass various factors, such as hourly rate per client, the level of deliverables, the quality of work produced, and the ability to meet deadlines, to name a few.

These details are crucial for helping companies understand whether the freelancer is providing value or not.

Moreover, there are various types of KPIs that you can use to measure the performance of freelancers in the company. For instance, predictive indicators allow you to anticipate future outcomes by analyzing current behavior patterns.

Retrospective indicators, on the other hand, provide you with information about past performance that can help in future decision-making. There are also diagnostic indicators that give you real-time information on performance.

For a KPI to be effective, it must be quantifiable and measurable in terms of percentages. This applies to all categories of KPIs.

In this way, it is easy for managers or supervisors to track and evaluate the productivity of freelancers in relation to the company’s goals and objectives.

Why You Need to Monitor Your Freelancers

Obviously, you’ll want to make sure that the freelancers you work with are productive and effective.

Active monitoring of performance can give you a clear view of productivity, which can ultimately help you make better business decisions. One of the most obvious key performance indicators (KPI) to monitor is productivity.

This can be measured in various ways depending on your industry and the nature of your work. It could be billable hours, the number of tasks completed, response time, or the quality of deliverables.

Additionally, since freelancers are not physically present in your office, it may be more challenging to maintain communication and ensure consistency in the work.

It’s essential to assess their ability to communicate effectively and promptly. This includes how long it takes them to respond to communications and how clear and understandable their responses are.

For those freelancers who are in client-facing roles, such as service desk or customer support, you might consider how they respond to and manage interactions with customers.

This is not only crucial for keeping your customers happy, but also for fostering brand loyalty. Finally, it’s helpful to review how freelancers handle uncertainty and stress.

How to Identify Key Performance Indicators

To identify relevant performance indicators when working with freelancers, you should follow these steps:

Step 1: Define your objectives Before measuring anything, you must have a clear vision of your business goals and what you hope to achieve with the hiring of freelancers.

You should never forget that all performance indicators must be directly related to your goals.

Step 2: Get to Know Your Freelancers It’s important to understand the skills and capabilities of your freelancers in order to consider the right variables, as not everyone has the same specialization or level of experience.

This knowledge will enable you to establish performance indicators that are relevant and realistic for them.

Step 3: Select Quantifiable Indicators The best performance indicators are those that you can measure in percentages or numbers. Examples of these indicators could be hours worked, number of tasks completed, quality of work performed, among others.

Step 4: Make Sure Your Indicators Are Predictive Predictive indicators are especially useful for freelancers. These will help you anticipate problems and opportunities, enabling you to take preventative actions.

Step 5: Consider the Cost of Monitoring Monitoring freelancers can be a time-consuming and resource-intensive task. It’s important to consider how many resources you are willing to invest so that you can select indicators that are feasible to monitor consistently and efficiently.

By following these steps, you’ll be on your way to clearly identifying the performance indicators that are most relevant for your freelancers and that will help you achieve your business goals.

How to Monitor Freelancers’ Performance

To effectively monitor the performance of your freelancers, follow these steps: 

• Set Clear and Measurable Goals: Talk with your freelancers and establish a set of goals that are specific, measurable, achievable, relevant, and time-bound. These goals will serve as key performance indicators.
• Open Communication: Maintain open and constant lines of communication with your freelancers. This way, you can keep track of their progress and address any issues that may arise.
• Use Digital Tools: Tools like Clockify allow you to track freelance work hours, distinguish between billable and non-billable work, promote and manage your business, and calculate billable hours to improve daily organization.
• Regularly Evaluate Performance: Don’t wait until the end of the project to evaluate the freelancer’s performance. Conduct periodic evaluations to identify opportunities for improvement and act on them quickly.
• Consider Emotional Factors: Freelancers can also be affected by income uncertainty, which can lead to stress, anxiety, burnout, and depression. These factors can impact their performance, so it’s important to provide the necessary support.

Remember that open communication and collaboration are essential for maintaining a healthy and productive working relationship with freelancers.

Use of Digital Tools for Monitoring Freelancers

It is essential to use digital tools to effectively monitor the performance of freelancers, as it simplifies the process and provides accurate results. Below, we mention some options.

1. Clockify:

It is essential when you need to track the work hours of freelancers. This tool helps you differentiate between billable and non-billable work, and to calculate billable hours for better daily organization.

2. Tools to Optimize the Evaluation of Freelance Writers:

There are various software programs specifically designed for this purpose, allowing for a more efficient and timely evaluation.

3. Freelance Work Platforms:

Tools like Freelancer, Upwork, and Fiverr make finding and managing work easier. These platforms provide integrated time tracking, which helps both companies and freelancers keep a record of hours worked.

4. Web Traffic and Engagement Analytics Tools:

Metrics like web traffic and engagement can provide a clear picture of freelancer performance, especially if their work involves content creation or digital marketing.

Best Practices in Freelancer Performance Evaluation

To maintain an effective and efficient workflow with freelancers, it is crucial to know the best practices for evaluating their performance. Here are some tips to help you improve this task: 

• Using Time-Tracking Apps: Collecting data on the time it takes a freelancer to complete a task allows us to evaluate their efficiency and productivity. Tools like Clockify can be very helpful for this purpose.
• Clearly Define Key Performance Indicators (KPIs): The performance of a freelancer should be evaluated based on concrete and measurable goals. Establishing clear KPIs is essential for an objective performance assessment.
• Provide Professional Development Opportunities: Freelancers are often looking for opportunities for professional growth. By providing access to training and the development of new skills, we can increase their performance and commitment.
• Compare Performance with Other Freelancers: A comparative approach can offer clearer insights into a freelancer’s performance. For writers, for example, the results of different authors can be compared using tools designed for this.
• Support Time Self-Management: Freelancers, by the nature of their work, need to be efficient in managing their time. Offering them tips and strategies to improve this aspect is a good practice in performance evaluation.

FAQ

How can key performance indicators be improved when working with freelancers?

Improving key performance indicators (KPIs) when working with freelancers requires a combination of well-planned strategies and the flexibility to adapt to changing circumstances.

An important step towards improving KPIs is having clarity about the expectations. Therefore, it is advisable to set clear and realistic goals from the beginning and communicate them to the freelancers.

Another important aspect is providing constant and constructive feedback. This not only allows freelancers to correct any errors promptly, but it also gives them clear guidance on how they can improve their work to better meet expectations.

Additionally, it is also beneficial to offer freelancers opportunities for training and professional development. As previously mentioned, self-employed workers are 1.5 times more likely to seek professional development opportunities.

Therefore, offering such opportunities can improve their performance and, in turn, the KPIs. Additionally, you can use digital tools like Clockify to track the time freelancers spend on billable and non-billable work.

This can give an idea of how they are managing their time and how it can be improved. Finally, calculating the hourly rate per client can serve as a valuable KPI to evaluate the freelancer’s performance.

How can performance goals be set for freelancers?

Setting performance goals for freelancers is a crucial step to maintaining efficiency and productivity in their work. Here are some tips that might help you:

1. Define Clear Objectives: It is essential that the goals are clear, measurable, and achievable. Freelancers must have a clear understanding of what is expected of them.
2. Set Deadlines: Deadlines help freelancers manage their time efficiently. They also provide a timeframe for task completion.
3.  Set Short- and Long-Term Goals: Short-term goals help maintain motivation and provide a sense of accomplishment. Long-term goals offer a comprehensive vision of what the company aims to achieve.
4. Request Continuous Feedback

What factors should be considered when evaluating freelancer performance?

Evaluating the performance of freelancers is a crucial task for the success of your projects. Always make sure to take into account:

• Meeting established deadlines serves as a direct indicator of the freelancer’s level of commitment and responsibility.
• The quality of the delivered work must align with the project’s standards and expectations.
• The freelancer’s ability to effectively communicate and solve problems is crucial for the successful execution of the work.
• The capacity to adapt to unexpected changes or difficulties in the assignment is essential.
• Tracking work hours using tools like Clockify helps understand how much time is spent on billable and non-billable tasks.
• The freelancer’s skills and their willingness to seek professional development opportunities can indicate their long-term commitment to quality and continuous improvement.
• It’s also valuable to compare their performance with other freelancers on the same site or platform.

How can key performance indicators be used to improve the productivity of freelancers?

Key performance indicators provide valuable insights that can help freelancers improve their productivity and efficiency. For instance, if tools like Clockify show that too much time is being spent on non-billable tasks, the freelancer can look for ways to optimize these processes to free up more time for billable work.

On the other hand, if a low hourly rate is calculated for a specific client, the freelancer can negotiate a better price, change their work strategy, or reconsider whether that collaboration is beneficial.

Key performance indicators such as web traffic, cost per click, follower growth, and engagement can also help identify areas for improvement that, in the long run, can enhance the overall performance of freelancers.

Additionally, using software to evaluate freelance writers can offer valuable comparisons with the performance of other freelancers in the same niche, helping to identify areas for improvement or successful strategies to replicate.

Conclusion

To conclude, it is essential for businesses to understand the importance of key performance indicators (KPIs) when working with freelancers.

These indicators not only provide a clear view of the performance and productivity of the independent contractor but also help maximize the benefit and growth of the company as a whole.

Proactive and continuous performance management is facilitated by using digital tools, such as Malt or Clockify, which allow for monitoring freelancers’ work and time.

But it is also crucial to consider the individual and unique factors of each freelancer, such as experience, references, or recommendations.

Regular communication and the establishment of SMART goals are essential to ensure that the expectations of both parties are met.

Remember that every team member has a unique way of working, and adjustments might be needed to ensure the relationship is productive and beneficial for everyone.  

Finally, don’t forget that freelancers are a valuable asset to your team and can bring new perspectives and approaches that can drive your business forward.

So always try to maintain a positive and open attitude, because at the end of the day, the success of your company depends on the performance of everyone who is part of it, including your valuable freelancers.

Now you’re ready to monitor your freelancers’ KPIs and get the most out of them!