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How to Choose Agency on Upwork

Maksym Petryshak
Engagement Manager

Are you an entrepreneur who is considering starting outsourcing with Upwork? We have collected all relevant information about the pros and cons of using the platform. Also, here you will find information about the hiring process and top-rated companies.

What is Upwork?

Upwork is a global platform aims to connect businesses and freelancers. It gives a space for contractors to post their jobs, and for freelancers to bid on those jobs. On the platform are available freelancers such as programmers, designers, writers, etc. The company Upwork was established in 2013 when freelance platforms Elance and oDesk merged. Now, the company operates in 180 countries with 14 million users and around $1B in annual freelancer billings.

outsourcing on Upwork

Advantages of Upwork

Upwork is quite a controversial platform. Some claim that site changed their lives by opening great opportunities alongside good salaries. Others advise to never use it if you don’t want to be charged high prices and be fooled occasionally. There is tons of information about Upwork written by freelancers and for freelancers, but what about another side of the medal? What are the advantages of using this platform for entrepreneurs?

outsourcing on Upwork

  • Access to the talented freelancers around the globe

Do you remember times when you have had to go to some IT Mecca like Silicon Valey in order to get qualitative software services? Good developers could only be found in those places where software development had its beginnings, somewhere like San Francisco or Boston. Fortunately, those times are over. Today, you can find skilled developers from China for your project in the UK. Upwork plays a major role in this process. This point is crucial for businesses, as it gives entrepreneurs access to the online marketplace. You are now not limited by geographic boundaries. This expands the search scope tremendously. You have a selection of the best developers on a global scale.

Let’s do simple math. Upwork operates in 180 countries. For example, every country has at least one talented developer who works on Upwork and specializes in the work you need to do. You have 180 ideal candidates. This is plenty of potential workers who will be glad to do their best in order to meet your needs. When the offer increases, it is getting easier to find a qualified worker at a fair price.

outsourcing on Upwork

Obviously, developers from developed countries have higher rates. For example, expert WordPress developers from the US get $125-400 per hour, while an Indian developer gets only $35-75/h. Frequently, the lower the price, the lower the quality. Fortunately, there are exceptions, and you can get great software solutions with affordable prices from East Europe developers (Ukraine, Russia).

  • The ability to work remotely

Upwork enables you to work remotely. This gives the freelancer freedom and flexibility. Employees have the authority to decide when and how they work. Such freedom is proved to have a positive effect on engagement and productivity. According to Hok.com thirty per cent of employees with flexible work hours feel more engaged in their jobs.  Compare them to the ten per cent of workers who feel engaged with no workplace flexibility. Upwork thus creates a perfect environment for increasing worker productivity and gives entrepreneurs access to the pool of remote workers.

Disadvantages to Upwork

  • A large number of mediocre candidates

One of the disadvantages of Upwork is that there is a high ratio of mediocre candidates compared to high-level developers. You won’t find many developers who charge a minimum of $70 per hour from the United States or other developed countries that you know routinely produces high-quality products. Though, there are some.

  • New pricing system

Before there was no service fee for clients to hire a freelancer, but in 2016 Upwork changed the pricing system. Now clients must pay a 2.75% service fee on every payment. Customers from the USA, Canada, Australia,  UK, and some countries in the Eurozone can pay a fixed amount of $25/month instead of a commission for every payment. Pricing rates for freelancers have also changed. Freelancers who work on small and inexpensive projects – not with the same client – will now pay 20% instead of 10%.

outsourcing on Upwork

The majority of freelancers find such changes disadvantageous, especially those who work with small projects and can not count on $10 000+ contracts.

For clients, the situation is not very positive either. Interest rates are not so high, and yet a lot of clients can decide to switch to another freelance platform with no service fee. Also, those who post small projects may experience a lack of freelancers willing to work on those projects, because of higher commissіons. It is also likely that freelancers will increase the prices for smaller projects in order to compensate for the service fee increase.

Hiring process

The hiring process on Upwork is not much different from the usual hiring procedure. In order to get good results, you must think everything through in advance.

Before creating a job post, take a minute and determine what and who you need. Decide what core skills the freelancer should have and at what level. A very important thing to consider is a budget. When it comes to payment, you have two options: either go with an hourly rate or a fixed price. Your choice depends on the needs of your project: fixed price suits projects with one finite deliverable, while hourly payments are ideal for ongoing projects.

When writing a job post, clearly define deadlines, a project description, and an overview. One of the biggest mistakes people make when posting job posts is not indicating specific technologies they need for the project. If you don’t know what you are looking for, you are not going to be able to find anybody to do that. So, you need to be extremely specific.

outsourcing on Upwork

Review bids

After posting a job post, you will get bids from freelancers. Pay attention to the candidate’s skills, feedback, time zones, and rates. When it comes to rates, do not expect to hire a quality developer for $15 or $18 per hour. If you hire the developer with an hourly rate less than $20, be ready to pay twice.

Identify 3-5 potential candidates who fit your proposal by experience, availability, and price, and you will be ready to move to the next stage. In case you are planning to build a project from scratch and do not have enough background in software development, it would be reasonable to hire a development agency. Thereby, the whole management will be on them. This is convenient and reduces the probability of failure for new projects as agencies usually have sufficient experience in similar cases.

Another important thing to consider is ratings, which give you an understanding of customer satisfaction. Although, there are situations when you should rely not only on ratings:

  • The developer with a high rating probably has a large number of clients, so be ready that he will not be as dedicated to the project as you would like;
  • There are good developers who work outside the Upwork. Therefore, they do not pay too many attention to their profiles and can have a lower rating.

When you miss good developers because of ratings, you’d better make decisions after the interview. When posting a job proposal, do not count only on bids; consider also looking for candidates by yourself. For better results, invite up to 20 candidates with relevant experience and skill levels to take part in your interview.

Arrange an interview

The next step is arranging an interview with potential candidates. Interviews enable you to see whether the candidate has relevant experience, as well as his attitude towards your project. Also, make sure the freelancer is interested in your project success.

If you are not a developer yourself, it may be difficult to identify a freelancer’s skills. Therefore, HackerRank site can be useful. HackerRank is a site where your candidates can take quizzes and answer questions. Moreover, they can build mini projects in order to show their knowledge on the topic.

Close the agreement

After the interview, provide your selected candidates with the full statement of work so that they are able to prepare a precise estimate. It will allow you to understand how long it takes to accomplish your project and how much it costs. When these issues are resolved, you can close the deal, sign the agreement, and start the development process.

Top rated agencies

In 2016, after changing the pricing rate Upworkt introduced a top-rated system that aims to highlight freelancers or agencies with the best performance. In order to be top-rated, the freelancer has to: first of all, delight clients with high-quality work. Second of all, they must have a proven history of success with multiple clients. Third of all, they must maintain a safe and vibrant marketplace. Upwork claims that only 10% of all freelancers have the top-rated badge.

Requirements for agencies and freelancers differ slightly, but in general, they both have to:

– Have a job success rating above 90%;
– Earn more than $1,000 for the past year;
– Have a full and correctly filled profile;
– Maintain the profile in an up-to-date state.

For business clients, such a rating is certainly beneficial. It saves time and helps to identify a reliable partner with an impressive reputation, as well as a record of successfully accomplished tasks.

outsourcing on Upwork

Conclusion

Regardless of its disadvantages, Upwork is a useful platform that made a breakthrough in the remote working area. Not so long ago, it enabled a lot of talented people to earn more and change tight offices into comfortable cafes and open spaces. Business clients also benefited from access to the global business talent pool. But changes that happened to Upwork lately shifted the perspective, and more and more people think about changing the work platform. Now there is a tendency for the platform to introduce customers and executants, who will continue cooperation outside Upwork.

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