How to Prevent Diminishing Returns when Hiring Freelance Developers

In a software development company, the VP of engineering or engineering manager needs to ensure they do not overhire for a given project, as recruiting too many developers can deliver negative returns. In this article, we explain how to prevent diminishing returns when hiring freelance developers and the steps you can take to recruit the right number of skilled people for the required positions.

Diminishing Returns in Software Development

It is a known risk that adding more workers to a software development project can result in diminishing returns. In the short term, the addition of a new team member can slow down other team members as they help the new recruit adjust to the work culture and become ready to contribute. There may be long-term costs, too. Adding employees increases the possibility of misdirection, mistakes, and misunderstandings, which can lead to conflicts, disagreements, and bottlenecks.

On the managerial front, there may be an undesirable increase in overhead processes, communication, and people costs. This creates a possibility of negative returns setting in, in which your team's performance actually declines with each new team member.

In addition to procedural slowdowns, there are risks from a cost perspective as well. This is especially true when hiring developers based in markets like Europe and North America, who charge higher rates and could significantly raise your project expenses. A project becomes more expensive with each developer added to it, which can potentially outweigh any productivity gains that might be made.

Causes of Diminishing Returns when Hiring Freelance Developers

Let’s look at the main causes of negative returns when using freelance developers.

Insufficient or slow onboarding practices

Most software development organizations do not deploy a structured process for onboarding. Companies often focus on orientation rather than the long-term success and productivity of employees. Poor onboarding can also lead to staff turnover, thereby increasing costs and adding delays for the firm.

Managers who do not automate their onboarding process or utilize employee engagement tools are at higher risk of delivering a poor onboarding experience. A clunky onboarding process can lead to missed revenue goals, lack of trust among workers, lower staff confidence, limited engagement levels, and diminished morale.

Poor documentation of tasks

Inadequate documentation can make it difficult for team members to understand project requirements and their roles. Additionally, it can make it hard to trace the work done, when it was performed, and who carried out the task. Negative impacts of insufficient documentation include deviation from client requirements, lack of key functionality in the finished product, the addition of needless complex features, and cost and time overruns.

Good documentation practices help users to keep track of all application aspects and improve the software product's quality. It should preserve and transfer knowledge to newly added developers in a standardized and easily digestible format.

Overpriced or unskilled freelancers

Diminishing returns can also result if the hired freelancers do not have the required skills for your project, or if they ask for high rates that increase the project's costs. If you hire a freelance developer at a low price, you might get poor-quality work from them. When hiring overseas, differences in culture and language can also impede the progress of the project.

Most freelancers work on multiple projects simultaneously, and inexperience developers might mismanage their time and miss your deadlines. In extreme cases, the freelancer could just vanish and not respond to your phone calls and messages.

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Poor communication

Poor communication among team members can make it hard for the new developers to fit in and start contributing. The new members may not have a clear idea of the functions they need to perform, which can affect the progress of the project.

Poor communication in a software development project typically arises due to unclear objectives, weak leadership, demoralized team members, cultural diversity, or personal issues faced by employees. You can overcome bad communication in your company by establishing baseline standards for communication, creating a secure and consistent space for sharing project-related information, setting clear expectations and norms, proactively asking for feedback, using technology in the right manner, and conducting effective and productive meetings.

Project management style

Your project management approach also has an impact on whether you’ll be able to efficiently incorporate new resources. For instance, if every member of the development team has their tasks allocated for a sprint such that they do not have time to train the new developers, then your project might be unable to fully utilize the new teammates.

A general solution is to proactively ensure that your resource management decisions and actions evolve to accommodate new needs, such as added resources or changing timelines.

Project type

Adding developers can create negative returns in projects that are late in development, highly complex, or that need enhanced security. For instance, banking or financial software projects require high security, while a supply chain management software could be highly complex due to various user personas of the app. Such projects make it difficult to efficiently onboard and use the talents of new developers. Thus, for these kinds of projects, the addition of new developers is more of a hindrance than an advantage.

Identifying Whether a Project Can Add New Freelance Developers

Now, let’s analyze the methods which can help you decide whether hiring freelance developers will be beneficial for your project.

Signs that another freelancer will help

If your project is in an early-to-middle development stage, is relatively simple, requires common developer skills, and your team has available bandwidth to onboard a new hire, then the project has favorable conditions for hiring freelancers. Gathering input from your team before hiring can help you determine whether additional labor is needed, or whether you simply need to change your strategy with your current team.

Choosing candidates with the right skills and attitude will benefit your project. Take your time during the selection process and shortlist applicants with proven skills in your project-related areas. The hired specialists should be able to start contributing right after onboarding and play their role in the project progress.

You can select the best freelancers for your software development project needs by preparing a detailed job description and being clear about the geographical location from which you wish to hire. Moreover, you should choose developers with your preferred personality traits and communication style, perform technical screening, and recruit from a reliable platform.

Signs that another freelancer will hurt

If your project is in a late development stage, is on a tight deadline, is highly complex, requires rare developer skills, and your team is already overburdened, then the project has unfavorable conditions for hiring freelancers.

If you’re unable to find freelance developers with the right skillset for your project, do not go ahead with the team expansion plan. You might end up paying a heavy price if you add developers who do not fit in. Therefore, evaluate the quality of the candidates carefully.

Apart from the needed technical skills, the freelancer should also have good communication skills, collaboration, and time management skills. If the freelancer exhibits faulty communication, lack of teamwork, and sub-par focus, it can take a toll on the project and impact other team members.

Try to determine early on whether the freelancer can be trained quickly to get them up to speed. If it's not possible, you should terminate their services swiftly and hire a competent replacement.

Ensuring the Success of Newly Added Freelance Developers

Let’s discuss how you can ensure success after deciding to include freelance developers in your team.

Proactively establish onboarding processes

Project managers play a decisive role in the effective onboarding of new developers. They need to provide them with the right connections and resources so that recruits can start contributing quickly. Systematic onboarding, which includes initial training, ongoing development, and retention efforts, can get new developers up to speed more rapidly. It also boosts employee engagement and reduces project failure rates in the long run.

An efficient onboarding process takes into account technology, support, space, compliance training, and documentation. Project managers can start by thinking through challenges faced by new developers. They should assist in speeding up the learning process, which includes technical learning, cultural learning, and organizational orientation. Project managers should quickly provide project objectives, deadlines, personal tasks, targets, and guidance to new recruits. They can also assign veteran mentors who are well-positioned to deliver vital lessons.

Managers should also help new developers build efficient working relationships with their team members. This can be done by encouraging transparency, modeling strong communication, giving valuable feedback, facilitating effective collaboration, and building team trust. Each team member should be encouraged to help new colleagues get acclimatized and learn their roles swiftly.

Both project managers and current team members should initially invest some effort and time in connecting with the new hires, which can pay excellent long-term performance and productivity dividends.

Monitoring productivity to prevent diminishing returns

You'll want to track productivity from the start to ensure that you are getting the appropriate value out of a freelance hire. One way to monitor productivity is to ensure that the new developers focus their time and effort on priority work that is vital for project progress. This will enable them to eliminate non-essential activities and utilize their time more efficiently. Therefore, the new developers should be appraised on the critical tasks that they need to complete first.

In a software development project, high-priority tasks typically include security, engineering productivity, infrastructure, data processing, and building features.

Changing your current team to accommodate new hires

Your existing team should be consulted when establishing onboarding processes and documentation protocols. Asking them about their own experiences coming aboard will help you identify gaps in your approach and opportunities for improved onboarding.

When you decide to add freelancers to your team, you should inform senior team members that they need to spend some of their time bringing the new developers up to speed. A redistribution of responsibilities and expectations across the team may also be essential, and you should proactively communicate any anticipated changes. Reshuffling assignments can help you maximize the versatility and talent of both current and new team members.

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Originally published:

November 12, 2020

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