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How to Scale Up by Outsourcing – Part 1

Discussion in 'Making Money' started by Sampler, Jun 11, 2012.

  1. Sampler

    Sampler Senior Member

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    You just have to look around on BHW to see people asking questions along the lines of

    ?What?s the best way to make $100/day??

    One of the most common answers to this question

    ?Find a way to make $1/day and then scale that method up.?

    Now because I?m essentially going to try and give a bit of a detailed guide in this thread about ?How to Hire Contractors? I want to explore 1 fundamental element of how to ?scale up? before I move any further.

    For me, ?scale up? isn?t necessarily always about turning $1/day into $100/day. What it?s more about for me is ?How can I use MY TIME more efficiently to generate that same/greater level of income??

    This is when hiring contractors can do the trick. Now, hiring contractors isn?t always the best situation and I haven?t been in every situation to have found out a process that?s always worked. That said, in the past year I?ve payed out over $6,000 to freelancers to do various jobs for me. You don?t really need to focus on this amount but whether you?ve outsourced $100 worth of work, $10,000 worth of work or haven?t outsourced at all, I want to help you with a bit of basic ?recruiting? so that when it does come time for you to hire your next contractor you don?t end up paying them to make mistakes that you have to fix. First I want to get out of your heads a few myths which you might think apply to you when trying to find freelancers to outsource to.

    Myth 1 ? Elance is Better than Odesk, Odesk is Better Than Elance
    I?ve heard people swear by a certain site because of the good experience they?ve had with CONTRACTORS from that site. However, saying this is like saying McDonalds is better than KFC because you had a good experience at ONE McDonalds restaurant where if you went to another one it may have been bad even though McDonalds is essentially the same thing, it?s the people that work in the actual store which differs. Essentially, all freelancing sites will have good contractors. The main difference between them is customer support and rules and regulations. The main point I am trying to get across here is that don?t stick with one site just because you think there are better contractors on one site. Change sites because of the way the payment process/insurance is set up. I don?t want to go into this right now because I do almost all of my hiring through Odesk simply because it allows me to manage my own contractor profile and hire people with ease. It?s a personal preference and you should look at both to see which one will suit you better.

    Myth 2 ? I only Hire people who live in XXXX Country because they are better
    Many sites allow you to filter applicants based off of their location. I try very hard not to discriminate based on location for the following reason. I?ve hired people from across the whole globe whether it was Australia, Bangladesh, India, USA, or Serbia I?ve almost always had a positive experience. That?s because my application process was able to filter out the wrong type of individual. In every country there are going to be good and bad workers. It?s how we attract the good workers/filter out the bad ones that make a difference, not where they live. That said, the only time I discriminate based on location is when I need a specific time-zone to make sure my productivity can be at it?s highest.

    The way I like to work is quite unlike most others who say ?you must be available during these times because this is when I work? however, because I don?t want to end up micromanaging my contractors, I often like them to begin work right as I?m finishing. As a result, I end up being more articulate with what I need done and don?t have to spend more than 10minutes getting my point across. Even if I did have more time, I shouldn?t need more than 10minutes because I should?ve hired a good/independent contractor in the first place.

    Myth 3 ? Contracting an Agency is Better than an Individual?
    ?because if they get sick or can?t work for whatever reason, the agency will be able to sort it out.

    This statement is true in some cases. However, it all depends on what job you need done i.e. full website development for a complex website may require an agency which has designers and coders, rather than trying to match up two individuals. However, the biggest unknown is ?who is actually doing your work??, while you may be talking to someone who appears to have great communication skills and knowledge on the topic, how do you know that the work is being executed by someone with a similar level of competency. That?s why in most cases I choose to hire individuals however I?ve never really had a huge project which required a lot of collaboration.

    Part 1 ? Hire Slow, Fire Fast

    I?ve got a few more Myths but I might save them for a later post because going through the application process is probably what you want to hear more about. What I suggest though is you keep the ?myths? at the back of your mind when reading this.

    MY #1 RULE WHEN HIRING ? ?HIRE SLOW, FIRE FAST?
    I can?t remember where I first read this or who said it (I just did a bit of research and I can?t seem to really attribute it to just one person) but this what I almost always follow when working with contractors.

    The main point with this is, is to take time with the application process and don?t be afraid to let people go. When I say fire fast that doesn?t necessarily mean to fire someone after their first mistake but you should be able to gauge a person?s level of competency pretty quickly i.e. after the first job/milestone.

    **As a single thread this would have been 3,000 words. So I?ve tried to break it up into some smaller and more manageable parts.**

    There are 4 ?steps? over two additional posts which explains the process which I go through when hiring contractors.

    Step 1 ?Pre Qualifying Applicants

    Step 2 ?Self Filtering

    Step 3
    ?Shortlisting

    Step 4
    ?Hiring


    Enjoy?
     
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  2. Sampler

    Sampler Senior Member

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    Step 1 -Pre Qualifying Applicants
    The first thing you really need to do before you can even begin to start qualifying applicants is to determine what you think makes someone a good worker. Here are the general qualifiers that I use when screening applicants.

    1. English Skills

    For me having a contractor with high levels of English is absolutely paramount to anything else. Without good English skills your message will either take extremely long to get your message across or will lead to an undesired job outcome i.e. very different to what you had in mind. I weigh English skills almost higher than anything else.

    2. Communication Time
    Coming in at a close 2[SUP]nd[/SUP] to their level of English is their communication/response time. I personally think the word "available" is a very loose term. Sure I'm available 6-10hours a day, but am I actually going to respond to you in this time? That's why I always stress RESPONSE time. This is a bit harder to judge as just because somebody may be the first person to apply to your job, doesn't mean they'll always be the best at responding in the future. That's why I spread out my hiring process over a few days at a minimum because I want to see what there average response time is. I weigh Response Time higher than a lot of other factors.

    3. Skill level

    This varies from job to job. Obviously I can train someone to create web2.0 accounts in a short amount of time, but I can't teach someone else how to design a header. Essentially, if it's more of an admin role I'm going to go solely of English skills and communication time. Any other job and skill level begins to play more of a role. When hiring somebody for things like graphics, I get them to do a small project first. Sure it might cost me $10-$50 in the short term, but over the long term it could save me $100's or $1,000's. In most cases, skill level is weighted the least.*** Please do not mistake skill level for competency. Competency refers to people's ability to jobs where as skill levels refer to how well a person does a specific job. A general guide of competency for me is English skills.

    Step 2
    -Self Filtering
    I am not a Human Resource manager and I don't want to spend the whole application process reading through 10's or 100's of individual application letters to find the minority group of people who will actually be good at the job. The second thing I don't want to do is gauge their whole level of competency after they have already submitted an application.

    If you've been on Odesk or Elance at all, you'll often see this in most job applications. Somewhere towards the end of the application the employer will ask that the applicant write the words "I have read this job description and understand it" or something along those lines. Unfortunately, that really doesn't do anything. It doesn't take a highly intelligent person to copy paste that to the top of their recycled application to trick you into thinking they have read it.

    That's why I tend to go slightly different but not too extreme and I'll explain why I don't go too extreme in just a minute.

    In order for me to be able to automatically decline applicants with ease I need the applicants to respond in their first sentence. Otherwise I would have to click something to "read more" of their application as if I get 20-30 applicants per job then this time can easily add up if I have to individually/fully read applications. So towards the bottom of my application I have a series of questions that I require the applicants to answer or I will "automatically decline your application".

    I generally ask about 3 or 4 relatively simple questions. These almost always include at least 1 maths question that involves the Order of Operations i.e. 4 + 9 x 3 = ?? and an English question i.e. Identify the verb, noun and adjective in this sentence. This helps me to filter out spam applications as well as begins to qualify the individual on their level of competency.

    Another question I also ask is for them to state whether or not they "Understand that deadlines must be met or you will not get paid for the work". This may seem harsh, however if I don't actually have a deadline I need to meet, I let the contractor tell me how long it will take them to do it and then hold them to their word. It's much easier for me not to pay someone when they explicitly told me that they will do "x jobs in y time" then them saying "yes" to my deadline. However, it's up to you. While this isn't an empty threat if the job is worth more than $10 or something then I may be a bit more lenient then something that costs a bit less. One other thing I stress with deadlines is that because I value communication so much, if I send them a job and they immediately tell me they won't meet the deadline I say that's ok, it's when I am not told that they "will be out of town for the weekend" that I strictly enforce the deadline/payment policy.

    This is generally as far as I go in my description. The reason I don't ask for a "body paragraph outlining why you would be the best fit for my job" and 4 other similar questions, is because if you are a moderately successful contractor, why would you waste your time going through extensive questions like this so early on? I like to find someone who has some time, but isn't holding out for their first job.
     
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  3. Sampler

    Sampler Senior Member

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    Step 3 -Shortlisting

    I'll immediately decline/reject people who don't answer the questions I ask in the description. If they happen to get one of the answers wrong but attempted it and I don't have a large pool of other applicants then I might let them through to the next stage however, I will make sure they have stellar reviews and a good portfolio to make up for those small but early mistakes.

    As soon as I shortlist someone I try and make contact with them in some way. This is my first real gauge of their response time.

    After they start initial contact I bring up the point that they must be able to do a VOICE interview with me on Skype. If they are not comfortable speaking English, then they really shouldn't move any further with me. However, when it comes around to it I actually haven't needed to do this and haven't done it yet, someday I might actually need to but it's really just more of an extended filtering process. Someday I might actually need to.

    Here I try and discover more about the individuals past by looking at their feedback and their portfolio. This is probably the hardest stage as it's hard to gauge what role someone actual played in completing a job i.e. someone has a history of "making backlinks", but are they actually good backlinks or does the employer just think because they were handed a nice spread sheet with fancy titles that they will help them. Similarly with graphic works or web development, did they start with a theme and customize it or did they build/design something from scratch?

    The main thing I look at is the dollar amount of their jobs and what kind of feedback the employer has given other contractors i.e. the average level of feedback given by an employer can make the specific contractors feedback better or worse i.e. if an employer gives all their contractors 5/5 I can't really take it into account too much. Whereas if an employer gives their contractors a variety of different feedback rating I'm more likely to believe that 5/5 actually means the contractor did a good job. My main warning is DON'T always believe feedback. I can easily flip this argument around and say because of my strict hiring policy I actually find good employees and end up giving most of mine 5/5 because they've actually done a good job.

    One of the best ways to move from shortlisted applicants to hiring someone is to give them a test run without actually hiring them (if it's a smallish job). i.e. you need a banner designed you tell your applicants they have been shortlisted and should come up with a Profile Picture/Avatar and if you like it you will hire them and pay them for that work. For the contractor to be protected you can recommend that they watermark their design and only remove it once you've paid. This approach may annoy some of the contractors and is probably against most sites Terms of Service so be careful how you approach it. Obviously, be honest and pay them if you do use it and stress that their work may not be chosen and they will not be compensated if that is the case. If you do do this kind of small project it gives you another really good chance to gauge their English level and response time which is the main point of the application process.

    Step 4
    -Hiring

    By this stage you should really only be down to a few applicants if not, at least 1 should clearly be standing out. If they've excelled at the test job feel free to start moving onto the bigger job. But until they've worked for you for a few days or even a week you might have to really break up your job into smaller parts and micro-manage them for a small amount of time. It varies from contractor to contractor so you have to be the judge to how much managing they need but if you've been through a good application process and had a bit of luck then it shouldn't be too much.

    The main thing I focus on once hired is meeting the deadlines and how much they are actually working. Fixed-price jobs can often be safer for the employer but may be less appealing to the contractor. Per hour jobs can screw you over if you do get someone slipping through the application process and runs up your bill without you closely monitoring what they are doing. A good way to combat excessive hours is that if you have a job which requires repetition is to do it yourself under time constraints. Then you should tell your contractor that it "took you X minutes/hours to do" and that should be what you should aim to do it within that time frame as well.

    It's a fine line for the next part. While I did initially say, "hire slow, fire fast" if you did go through a good application process you should have one of the better contractors on the site working for you and you should give them a chance. It varies for each person but you should be able to judge by now whether or not they will work well with you or not. That said, if you do cut them loose do it politely because you may need them in the future. Similarly, don't string your unsuccessful applicants along if you don't have the real intention of hiring them but let them know that you may have a job for them in the near future which may be the case if your number #1 applicant doesn't end up being able to perform.

    ---------------------------------------------

    Part 1.

    ---------------------------------------------


    Hopefully you were able to learn a thing or two about hiring on freelancing sites and I'm sure there's definitely more to cover. However, anything more than 3,000 words initially is probably a bit too much for most people so I'll end it there but will be willing to discuss anything in this thread and/or in the next installment (plus it's 3am so I need some sleep).
     
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  4. KillerHeck

    KillerHeck Jr. VIP Jr. VIP

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    Awesome, thanks for the post.. I use outsourcing for some of my projects and these tips would definitely improve my "find more quality freelancers to hire" skill :)

    Thanks!
     
  5. Halilovic-Squad

    Halilovic-Squad Regular Member

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    thx & rep given for this very usefull and professional insight...
    ...will be following this.
     
  6. Sampler

    Sampler Senior Member

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    No worries guys. Glad you liked it.
     
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  7. asilent

    asilent Junior Member

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    Thank you for this great information. I frequently have to deal with outsourcing at it may be difficult and take some time and money (!) to find someone good. That information will definitely help me to find workers more effective.
     
  8. Sampler

    Sampler Senior Member

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    Let me know if you have something specific that gives you trouble with and I'll do my best to answer it.
     
  9. Toocoo82

    Toocoo82 Regular Member

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    Question: Does this apply to SEO workers? I see most seo workers want an hourly pay and refuse to work on a fixed price. If so, what's a good fixed price to choose?
     
  10. timb98133

    timb98133 Newbie

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    Wow - this is great. Thanks! I outsource for all my squeeze page & give away products!
     
  11. Sampler

    Sampler Senior Member

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    If they want an hourly rate then you can work with that. What I would do is first, perform the task myself and see how long it takes. I then tell the person whos applying for the job that you must be able to make "X links per hour you work. And at the end of each day you must provide me with a report with those links". Start them off with a limit (you can do this on Odesk but not sure about others) of say 3 hours to test them out and if they do it well you can increase the limit of hours they can work to say 10 for that week. Slowly build them up into it.

    If you want to go fixed price then give them the option. Ask them to tell you how long it will take, or do it yourself. Then use their hourly rate to make a fair judgement i.e. if they want $8/hour and you think the work should take them 30min, say you will give them $4 per report they generate if they meet the deadline you set.
     
  12. bashhunter

    bashhunter Regular Member

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    Great Thread Sampler.

    Too bad that too few people realize the value you are giving.

    Question:
    Is it better to ask question along the paragraph to make sure that people actually read what you say?

    Like this:

    Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here.

    What is 2*2 =?

    Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here. Your Text Here.

    What is the color of the sky?
     
  13. bashhunter

    bashhunter Regular Member

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    Other question:

    When you know the contractor, do you offer to pay them outside of odesk, freelancer,...

    Those site take a huge chunk out of their salary.

    If you do, Which payment processor do you use?
     
  14. Tsongkie

    Tsongkie Regular Member

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    Great thread. I have a question somewhat related to this.. Will you pay someone to give you a list of qualified applicants/freelancers, interview them, do a background check and handle the payments? If so, how much?

    I also run an HR outsourcing firm and if this idea is something feasible, I'll extend the services to this forum. I'm just not sure if it is worth it to you guys. I mean do most people hire on a per project basis or a monthly basis?

    T
     
  15. Sampler

    Sampler Senior Member

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    In regards to your first question, you can intersperse questions within the body paragraphs however I haven't done it as much as you have in your example rather

    BODY

    3x Questions

    BODY

    Is more what I do.

    In terms of your second question it depends per site. On elance you are offered a bit better protection if you pay through milestones on a fixed price project but not on odesk. It also depends on the freelancer as some may like large $$$ jobs to appear on their profile which only works if they get paid through the site. I have worked with paying people on and off odesk but it changes per person and per project.

    This could be a good idea for those who need it but I wouldn't be surprised if the market was limited as often people may prefer to use software/bots because it reduces the need to manage someone. Also per project or monthly payments varies per job so it's hard to say which would be more popular. That said I generally start with a per job payment system to guage how long it takes them to complete their jobs so if I do move to an hourly/monthly payment I know what they should be producing.
     
  16. bashhunter

    bashhunter Regular Member

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    Which payment processor do you use when paying people off odesk?

    Contractor can see other people's bid, so can they just copy paste response from other bidder.
    Would that render the spam question useless?
     
  17. lostpassword

    lostpassword Junior Member

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    Hi Sampler, can you answer this:
     
  18. Sampler

    Sampler Senior Member

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    1. I just stick with Paypal as it does offer some protection if when paying people you pay them for "goods" rather than a "service"

    2. Contractors on Odesk as far as I'm aware cannot see other peoples applications, they can see the average bid price for the job but I've never come across a duplicate application in terms of 1 contactor copying another.
     
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  19. veheme

    veheme Elite Member

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    When I hire people, the main thing I look at is work ethic. Do they go online early? Do they sometimes go overtime just to finish work? Do I see improvements in his work? Do they ask questions when they don't understand something? Do they show a particular interest in what they do? For me, work ethic is 80% while skills are probably at 20% because I can easily teach those who are willing. Just my personal preference.
     
  20. Sampler

    Sampler Senior Member

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    I agree, skills/jobs can often be taught where as a good work ethic can't (see post #2 in this thread www.blackhatworld.com/blackhat-seo/...cale-up-outsourcing-part-1-a.html#post4339530). The only problem is finding out a persons work ethic before you hire them which is why I almost always do test jobs.