The 6 critical mistakes that employers continue to make on Elance

I have spent waaaaay too much money on Elance over the past several years but every dollar has been absolutely worth it. For those who don’t know, Elance is the best (in my opinion) online marketing talent marketplace online. The site serves as a project management middleman between vendors and clients who work online.

Every day hundreds of thousands of people use the site to work in a virtual project space and lots of amazing websites, web tools and applications come from Elance.

Managing talent on Elance however can be a little tricky. As a former IT project manager, I have seen contractors pull all types of tricks and shenanigans. Online is no different.

Here are the 6 critical mistakes that employers continue to make on Elance.

Never select only one contractor at a time

When you have been on Elance for a while, you develop a network of trusted go-to resources who are reliable and can work as a well oiled virtual team for you.

Getting to that point however isn’t always a smooth process.

When you open up a job, get responses and select a vendor, Elance gives you the option to keep the job open even after you have selected a vendor.

Use it.

For small to medium jobs, before I had my virtual team, I would assume I would get 3 or 4 vendors who would misrepresent their skills so I would hire 2 or 3 at a time.

For cheaper jobs, I would take the chance that I would have to pay 3 times because it was worth it to get the deliverable in a timely manner. For more expensive jobs, I would hire several contractors at once and then do the next step.

Always set up an early milestone

So this is a medium to large project and you want to make sure you have the right talent. You also have 3 people who SWEAR they can do this job.

Create an early test or milestone for these vendors. The odds of all of them getting it right the first time is very low.

Make it a tough but fair task and be willing to pay for it. If any vendor fails this task, cut them right there.

Trust me you’ll be saving yourself a world of pain by cutting them early.

Never fund escrow unless you ABSOLUTELY have to

This one is controversial but it has saved my ass time and time again. For those who may not know, Escrow is simply a third party trusted location where a buyer and seller can store the funds until a project or milestones are completed.

Elance has a pretty bulletproof escrow system and I use it often. The thing is, when I don’t have lots of confidence in the vendor I am selecting, I usually choose to fund escrow later.

Here’s how this helps – a small example. You hire a vendor to modify a graphic and they tell you it will take 2 days.

2 days later you check in and they say ” The internet was down in [insert India, Pakistan, China etc etc here] and they couldn’t get to it but it will be done tomorrow.

You check in the next day and their sister/brother had a [insert fake life event here car accident, was shot, hurt etc etc].

At this point 3 days later, it’s clear this isn’t going to work out.

Would you rather:

1. Cancel and forget about this resource entirely (they owe you no money since you never placed money in escrow)
2. Cancel and have to explain to Elance what they did and why you should get your money back and have them respond that you weren’t patient and back and forth etc?

Now let me make this clear, Elance are extremely good about refunds etc so you will almost never lose your money but the extra bureaucratic hassle is never worth it for me.

Always treat contractors with dignity

I live in California and life is good. I am always aware of the fact that the people who are working for me may be living in close to abject poverty. Twenty dollars for a small project could be the difference between that man or woman making rent or feeding their family that month.

A lot of the people who work for me are also decent, funny, brilliant people who are excited that they can be part of my projects and have gotten to know me. It’s a pretty cool thing if you really think about it.

Be firm with people but fair. If someone is asking for $20 and can do a tiny project for me with 90% quality. I’ll pay them $25 and clean the product up myself. It means a lot more to him/her than it means to me.

Next,

Make sure you pick your battles

Don’t spend time arguing with a contractor over pennies. If they can’t fix the work, move on and get another resource. The back and forth/argument time is often more expensive than the actual work itself.

You should ALWAYS trust your gut

Sometimes, you want to select a vendor but for some reason, it doesn’t sit right with you. It may not make sense, their qualifications may be pristine and they may be asking for the right price. It doesn’t matter.

Trust your instincts and wait for the right one.

Better to start late with the right resource than begin on time with a pain in the ass. It makes the entire project experience a lot more enjoyable.

Well that’s it.. the six critical mistakes that employers continue to make on Elance.

What about you? Have you experienced any of these mistakes? Use the comments below and let me know..