The Ultimate Guide: Hiring Contract & Freelance Employees

The Ultimate Guide: Hiring Contract & Freelance Employees

Hiring employees can be tricky for some employers, especially freelance and contract employees. Managing a team in your company starts with hiring employees to fill up the required role. There are many things to consider when hiring any type of employees – from when you require them to drafting a contract specifically for the type of employee.

In this article, we will be talking about the things you need to know when hiring contract and freelance employees.


Freelance Employees

Benefits of freelance employees:

1. Lower Costs

Freelance employees are usually paid according to the work that they have completed without having to pay any base salary. This could save costs as compared to hiring full-time employees.

2. Flexibility

Freelance employees are normally hired to work on specific projects within the job scope. Therefore, it offers more flexibility according to the company’s staffing needs by allowing them to rearrange their employee’s work scope.

3. Efficiency

Freelance employees are usually more motivated to finish their tasks quicker as they are paid per project. This would drive the work rate up for the business and increase their productivity.


How To Draft A Contract For Freelance Employees?

It is essential to add the following into the contract you will be drafting for freelancers:

1. Adding the job description – In the contract you’ll be drafting, be sure to add a detailed description of the job you require them to do. You should also add deadlines that need to be met into the contract.

2. Payment – Be sure to add the rate you will be paying them after the job is completed. This can be hourly or a fixed rate.

3. Contract duration – State the length of time they will be working for your company and be sure to give them a reasonable amount of time according to the task at hand.

4. Confidentiality agreement – This clause needs to be stated in the contract to protect the information of your business from being leaked by the freelancers you employ.

5. Causes for termination – This is to inform the freelancers in writing the possible reasons that would lead to the termination of their contract.

All these are to ensure that the obligations of both parties are stated in writing and to protect your company’s interest.


Ways To Pay A Freelance Employee From Abroad

There are a few ways to give your freelancers their compensation if they are from a different country. One way of doing so is by wiring the money directly into their bank account. You can use payment service applications such as Stripe, to send over their money. To avoid any surprises if you make the payment using payment services applications, be sure to check the additional charges that come with transferring the money. You can also opt to send them a virtual card which allows them to access the money they earned that is fully prepaid.


Contract Employees

What Is A Contract Employee?

Unlike full-time employees, contract employees have an end date that’s agreed upon in advance. They are only contracted to work within a specific amount of time. In Singapore, they should have the same benefits as a full-time employee if their contract is more than three months.


When Should You Hire A Contract Employee?

Here are some instances that would require you to hire contract employees:

  • You require a specific skillset that you currently do not have from your staff to carry out a specific project.
  • Workload is piling up and you need more hands to work through the busy period.
  • Needing a temporary replacement for a full-timer who is on a long leave (usually more than a month).


How To Draft A Contract For Contract Employees?

The following are things that are essential to state in the contract for a contract employee:

1. The particulars of the employee. (eg. Name & Contact information)

2. The start and end date that has been agreed upon.

3. Description of the job scope and the tasks they would need to perform.

4. State the amount they will be paid and the schedule of the payment.

5. Note down expenses that will be reimbursed back to them (if any).

6. The benefits they will be receiving (only if applicable).

7. State the notice period they would have to give if they were to need to leave the job.

When the contract is ready and needs to be signed, get the employee and a party from your company to sign the agreement to make sure that everybody is aware of their obligations.


How To Renew A Contract For A Contract Employee?

Before taking the next step of offering a contract, check for any terms in the previous contract that states a possibility for renewal of contract. If there is, follow those terms. If there is not, you would need to come to an agreement on a new contract. Here are some tips to help you during the process:

  • Discuss with the contract employee about their goals and what they want to achieve in the duration of the new contract.
  • Inform them of the company’s objectives during the next period of the new contract.
  • Come to an agreement for a new salary for the contract employee based on the experience and skills and consider the current market rates.
  • Decide on the length of the new contract.
  • Add terms for renewal in the new contract to make it easier for future renewal.


Converting A Contract Employee Into A Permanent Staff

There are some contract employees that stand out from the rest, and you might be considering converting them into a full-time permanent staff. Here are some of the steps you can take:

1. Identify the contract employees that are performing exceptionally.

Before converting them into permanent staff, you would need to see if they have what it takes to continue taking on that role permanently. Identify the exceptional performers and put them under consideration.

2. Discuss with them the possibility of converting to a permanent staff.

Once you have  identified suitable contract employees to permanently work for the company, you can discuss with them if it would be of interest to them. Sit down and talk with them individually to tell them the benefits of the permanent role you are offering and clear any doubts they may have about the process.

3. For those who are keen, you can start the conversion process.

Now that you have gotten their agreement, you can proceed with the process of converting them into permanent staff. The process typically involves them filing a formal application and having an official interview to see their fit for the role. When these steps are completed, the conversion process would be done, and they will be permanent staffs for your company.

If you are able to identify the contract employees who are great performers of their jobs, it would be easier to add them into the permanent staff roster and you will have the manpower to succeed in your business.



There are benefits of both freelance and contract employees. You can hire whichever you see fit for your company’s needs. We hope that employing them will now be easier after going through this guide on hiring freelance and contract employees.

If you are running your own company and you need a HR system for SME in Singapore to keep tabs of your freelance and contract employees, look no further than Zealys. Get in touch with us at [email protected] for further inquiries on our software.

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