Hi, I need to hire a specialised PM that can manage a remote (and very async) team as a freelancer.
That relationship seems to be difficult for the majority of PMs I’ve found since, as I would assume, it’s unusual.
How should a PM be screened for remote work? I’m having a hard time seeing a freelancer PM because I’m used to interacting with them in a formal office environment.
Similar to just how you would for any other candidate during the pandemic. Ask a lot of questions about their experience working with remote or offshore teams in this situation. Even if the team is async, the PM typically needs to meet with the team at least occasionally during unfavourable times for someone (the PM or the others).
When it comes to contracts, I’m not sure why, but PMs make less money than Engineers on a per-project basis.
For almost ten years, I worked as an independent consultant. While I could obtain competitive rates for engineering work, I frequently encountered less enticing prices for project management work. My best hypothesis is that people tend to hire contract engineers more frequently than PMs. Furthermore, the PM role is a relatively recent one that has only grown in popularity over the previous ten years.
Now here’s some advice: don’t hire a PM for a pennies per hour. The skill you receive will be at the bottom of the barrel.
It’s true that managing a remote and asynchronous team requires a different set of skills compared to a traditional in-person team. However, there are many project managers who are experienced in managing remote teams and can work as freelancers.
To find the right project manager for your needs, you can start by looking for freelancers with a proven track record of successfully managing remote teams. You may want to look for project managers who have experience with remote collaboration tools and are familiar with managing teams across different time zones.
Additionally, you could consider looking for project managers who have experience in your industry or domain. This can help ensure that the PM understands the unique challenges and requirements of your specific industry.
You can use online platforms such as Upwork or Freelancer to find and hire freelance project managers. These platforms allow you to review the freelancer’s portfolio, work history, and ratings from previous clients. You can also conduct interviews with potential candidates to assess their skills and experience.
Lastly, make sure to communicate your expectations clearly to the project manager and set up regular check-ins to ensure that everyone is on the same page. Clear communication and well-defined goals are essential for the success of any remote team.
@Luisneilson, I know this is a very tricky question, but what’s the ideal. hourly range for a consulting or a freelance PM?
So, the general rules of thumb for consulting for any role are pretty clear.
- As the consultant, you want to target a billing rate which is equal to the 1st 3 digits of the annual cash comp you’d be paid as an FTE. E.g., if your cash comp would be $200k as an FTE, you’d want to bill out at $200/hr (which is ~$400k in consulting fees over a full year). Keep in mind that you don’t get benefits as a contractor nor equity, so while that may sound like a lot of cash, self-employed benefits are expensive and there is no equity upside.
- Generally speaking, clients don’t want to actually pay that much. What I’ve found is that ~75% of your target billing rate is amenable to clients. E.g., for a position paying $200k cash comp for an FTE, one can typically secure a rate of $150/hr. The only time I’ve seen clients pay 100% of a target billing rate is when they know the consultant and/or the consultant offers niche expertise.
It’s important to note that with the increasing comp paid to Engineers and PMs driven by equity, I believe that consultants should really advocate for 100% of their target billing rate.
Feel free to DM me or reply if you want feedback on the parameters you plan to offer, and I can tell you whether I think it’s fair / reasonable to the contractor.
The last piece of advice: find out whether your PM is really comfortable with consulting. At my last company, we generally sought to bring people in as a contractor for 6-18 months, and if they panned out, have them apply for an FTE opening. It limits the risk of hiring a potential poor-fit FTE. I hired multiple Senior PMs this way, but every one of them actually wanted an FTE role, and thankfully I was able to convert 3 of the last 4 contractor hires to FTEs when we had the budget to open an FTE position. I wanted to convert the 4th one to an FTE — in some ways he had the highest potential — but we didn’t have budget for it. He’s now an Exec Director at a large bank (good for him).
What are some additional expenses that a consultant might need to account for? Ex. Business registration, Insurance etc.?
@CarlosDubois, As a freelancer or consultant, there are several additional expenses that you may need to consider beyond your standard business expenses. Some of these expenses may include:
Business registration and licensing fees: Depending on where you are located, you may need to register your business and obtain certain licenses or permits to operate legally.
Insurance: As a consultant, you may need to have professional liability insurance to protect yourself in case of any errors or omissions in your work. You may also want to consider other types of insurance, such as general liability insurance, depending on your specific industry or clients’ requirements.
Accounting and legal fees: You may need to hire an accountant or lawyer to help you with taxes, contracts, or other legal matters related to your business.
Software and technology: As a consultant, you may need to invest in software or other technology tools to help you manage your business, such as project management software, time tracking software, or communication tools.
Marketing and advertising: As a freelancer, you will need to market your services to potential clients. You may need to invest in advertising, website design, or other marketing efforts to build your brand and attract clients.
It’s important to carefully consider these additional expenses when setting your rates and planning your budget as a consultant or freelancer.
Wow! Excellent insight and explanation @EvaRichardson, Thank you so much.
One more query that comes to my mind is:
Is it possible to ‘freelance’ to see if it’s their cup of tea before registering a business?
Yes, it is definitely possible to freelance and work as an independent contractor without registering a formal business entity. In fact, many people start their freelance careers this way to test the waters and see if it’s the right fit for them.
As a freelancer, you can simply work as an individual contractor and invoice your clients for your services. You will need to track your income and expenses and report your earnings on your personal tax return. Depending on your location, you may also need to obtain any necessary permits or licenses to operate as an independent contractor.
However, it’s important to note that operating as an independent contractor can have certain limitations and risks. For example, you may be personally liable for any legal or financial issues that arise from your work, and you may not have the same legal protections or benefits as a registered business entity.
If you decide to pursue freelancing as a long-term career path, you may want to consider registering a formal business entity such as a sole proprietorship, LLC, or corporation. This can provide you with more legal protections, tax advantages, and credibility with clients.
You mentioned 3 of the last contractors converted to FTE when you had the budget. What were the motivations of the consultants to work as FTE since they could generally earn more as consultants. Was it benefits, equity or perhaps job security?
@AngieGoodwin, Peace of mind.
Being a consultant entails risk. I was self-employed for 10 years. But many people don’t like having to source their own work / set up contracts with clients.
I eventually went in-house (i.e., FTE) because I wanted equity and career progression.
Thank you, all of you for the very fruitful discussion, very insightful! I agree @Luisneilson, better to have an added layer of protection with an LLC and possibly professional liability insurance.
Thanks to @EvaRichardson and @MichellePlowman for taking the time to share your experience!