The comparative costs of freelance consultants & permanent employees

At movemeon, we’ve seen the freelance market grow year on year. Freelancers are highly skilled, they possess deep industry expertise and they are quicker to hire than permanent employees, so it’s no surprise that the growth of the market has been driven as much by demand as by supply.

But there is still a lot of uncertainty around working with freelance consultants. So, based on the questions many of our 1900+ employer partners have asked us, and using the data we’ve collected over the last 5 years, we’ve created a guide to employing freelancers.

Here you can read some of the findings outlined in our new guide, in answer to the question “Freelance day rates can feel really high – how much do freelancers really cost v. permanent employees?

Freelance v. permanent: pay comparison

 

freelance-v-perm-data

Pay comparison: freelance v. permanent

Data source: 34,945 aggregated, anonymised movemeon.com & payspective.com responses

 

The highest supply and demand for freelancers, in our experience, is at the Associate and Manager levels. At these levels, once you factor in all the costs of permanent employees, the saving on a permanent employee is 32%. However, in reality the costs are far more comparable: freelance hires don’t come with onboarding or offboarding costs, and hiring processes for freelancers are much quicker, making for hidden savings on freelancers. 

Freelance v. permanent: hidden savings

 

You can end freelance contracts with little to no notice (provided you take legal/HR advice – the extent of notice will depend on the given  contract). This means that you generally don’t incur the costs associated with termination of permanent employment when you end a freelance contract. This also makes freelance hires far lower-risk.

 

You can also appoint freelancers much faster. Recruiting for permanent employees can take several months, during which time business performance may suffer simply because there is no one ‘in role’. The recruitment cycle for freelancers is far quicker (via movemeon we see freelancers starting projects within 1 week of the project opportunity being shared). Generally, the interview process is faster as hiring managers are purely focused on competency rather than, say, competency and cultural fit. Moreover, the freelancers they interview have immediate availability.

 

Find a more detailed analysis of costs in our dedicated article.

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