How To Navigate the Risks of Hiring Freelancers

The flexibility of working with freelancers is one of the biggest advantages businesses have today. But let’s be honest: It can feel risky. Will the work be any good? Is your data safe? Can you trust this person to follow through?

Here’s the good news: the most resilient small and medium-sized businesses (SMBs) aren’t just mitigating these risks; they’re building systems around them. The Upwork Research Institute found that 31% of top-performing SMB leaders use independent talent to fill skill gaps and keep work moving without overloading their teams. They add specific practices to boost their peace of mind. 

This guide breaks down how to navigate some of the most common concerns — such as quality, security, alignment, compliance, and payments — so your team can tap into flexible talent with confidence.

1. Find great freelancers with a skills-first search

It’s easier than ever to find great freelancers, but the wrong hire can waste time and derail critical projects. A few quick shifts can help you accurately vet freelancers and make strong work more predictable from day one. 

Start with the skills that matter

The strongest signals of quality are simple: Have they done this kind of work before and how did it go?

Begin by choosing two or three must-have skills tied directly to your desired outcome. Then look for concrete proof, such as:

• Portfolio samples
• Relevant client reviews
• Thoughtful questions about your goals
• A clear, confident description of their process
  

A small, paid test project can also help de-risk early work. It gives you a read on communication and quality without putting a key deliverable on the line.

“The paid writing samples really let me see which writers put attention and care into creating a finished product that read as a teambuilding.com article.”

— Angela Robinson, marketing coordinator, teambuilding.com

Look globally when skills are hard to find

A skills-first mindset is especially useful when you need niche expertise. At Omic OS, a Seattle-based systems biology startup, the team regularly needs a mix of skills that are nearly impossible to source locally. “We require specialists with both deep biological knowledge and modern AI expertise,” founder Gabe Richman said.

Their first Upwork hire, a clinical geneticist, eventually became chief scientific officer. “What really builds our confidence in Upwork is how we consistently find experts who deliver on highly technical, complex projects,” Richman said.

Upwork’s Business Plus plan helps your team move even faster with access to additional insights and hiring signals — like enhanced talent recommendations — so you can shortlist with confidence and kick off work sooner.

Read freelancer profiles with purpose

A freelancer’s profile gives you a snapshot of their skills, past work, and how other clients describe working with them — all based on their history on Upwork. It’s one of the fastest ways to assess whether someone’s background matches your project.

Key signals to look for include:

• Verified identity. Confirmation that the freelancer has completed Upwork’s ID verification.
• Job Success Score. A measure of overall client satisfaction.
• Talent badges. Recognition for consistent, high-quality performance.
• Work history and earnings. Indicators of experience level and project volume.
• Client feedback. Insight into communication, strengths, and reliability.
• Portfolio samples. Real work that shows what they can deliver.

2. Screen candidates to choose the right professional

Once you’ve found freelancers with the right skills, you’ll want to shortlist further to choose the one who’s the best fit for your project. That comes from focused screening and clear, structured evaluation.

Once you’ve found freelancers with the right skills, you’ll want to shortlist further to choose the one who’s the best fit for your project. That comes from focused screening and clear, structured evaluation.

Run a focused, high-signal interview

A strong proposal shows who a freelancer is and what they can do. A good interview tests for fit.

“I recommend having a video call interview with freelancers before you hire them,” freelance content strategist u/sachiprecious suggested on Reddit. “[Upwork] has a built-in feature that lets you schedule Zoom calls with freelancers using [Upwork’s] messaging and scheduling system. This is how you can have video calls while still staying within [Upwork’s] system.”

Go beyond generic questions for signals that can help predict project success. Ask about:

• How they would approach your specific challenge
• How they communicate under pressure
• How they handle ambiguity, handoffs, scope changes
• Whether they’ve done similar work before
• Whether they understand your specific project needs

As you conduct interviews, Upwork helps you compare candidates side by side, so you don’t have to rely on gut feel alone.

Related: 

• Red Flags To Consider When Hiring a Freelancer

Use AI to clarify fit faster

AI isn’t here to replace your judgment, it’s here to reduce noise. That can make a difference, especially when you’re trying to shortlist freelancers.

Uma, Upwork’s Mindful AI™, helps streamline the front end of the hiring process. It clarifies what you’re looking for, highlights candidates who align with those needs, and organizes the details you gather along the way.

With Uma, you can quickly:

• Draft sharper job posts. Turn a simple sentence about your needs into a polished, targeted job post that attracts the right expertise.
• Identify strong matches faster. Use quick invites to surface high-fit freelancers immediately and invite them in batches.
• Screen candidates before the first call. Leverage instant interviews to review video responses and skills-based ratings for each proposal.
• Compare finalists side by side. Evaluate candidates across your most important criteria with clear, structured comparisons.
• Run smarter interviews. Generate targeted interview questions based on your project goals and the freelancer’s background.
• Spot strengths and gaps automatically. Let Uma highlight potential fit issues or relevant strengths across proposals.
• Summarize everything instantly. Turn your notes, transcripts, and conversations into structured summaries that bring clarity to your decision.
  

The result? Uma can help you make grounded decisions — even when you’re on a tight timeline.

3. Protect data with simple, repeatable steps

You don’t need enterprise-level tools to protect data security. Most risks can be managed with a few simple steps — especially when they’re baked into your workflow from the start.

Think in levels of access

Not every freelancer needs access to everything. Limit exposure by classifying the work:

• Public: No restrictions
• Internal: Team use only
• Confidential: Requires NDA and/or approval
• Sensitive: Limited access, only with management approval

If the work involves highly sensitive or regulated data, such as personal or protected information, loop in your IT or legal team before work begins. A quick check now can prevent bigger issues later.

Match the security level to the tools and setup you use. For example:

• VPNs or shared folders to restrict access
• Strong passwords and multi-factor authentication
• Version control for accuracy and audit trails
• NDAs for work involving private or proprietary data

Use platforms that add built-in protection

When you engage talent through Upwork, you get a better-protected environment:

• Verified identities and credentials
• Built-in contracts and payment protections
• Ongoing platform monitoring for suspicious activity

Upwork has long-standing systems designed to help keep Upwork safe, including screening, verification, built-in contracts, and protected payments. These safeguards work in the background to identify and remove activity that doesn’t meet platform standards, so you can hire with more confidence.

If you’re unsure where the cybersecurity gaps are, loop in your information security team — they can help make sure your setup is secure before work begins.

4. Keep work moving, even across time zones

Most freelancers work remotely, often across time zones. That only becomes a risk if your team relies on real-time communication for everything. A few simple adjustments can make remote collaboration smoother and ensure projects keep moving, no matter where everyone is located.

Embrace async to avoid bottlenecks

Asynchronous communication — written updates, recorded walkthroughs, clear documentation — means people don’t need to be available at the same time to make progress. This reduces wait times, minimizes miscommunication, and gives everyone the context they need without relying on meetings.

Use shared tools to stay aligned

Upwork makes cross-time-zone collaboration easier with tools that centralize communication. With Upwork’s messaging tool, you can share files, exchange feedback, hop on video calls, and access AI-generated transcripts to keep everyone on the same page — no need for third-party apps. 

Business Plus customers also get shared workspaces for their team and added visibility across the team to help projects stay in motion.

Related: 

• The Top 18 Collaboration Tools 
• 14 Ways To Improve Remote Team Communication

5. Set clear expectations from the start

Top freelancers often scan dozens of listings. The more specific you are, the easier it is to attract top talent; they can decide whether to say “yes” or “no” quickly.

“Sometimes companies are general in their descriptions, rather than providing the detail of an opportunity or role that could help top talent know when to opt in or out,” said freelance customer experience consultant Sasheen Murray. “More detailed information tells me the company has been thoughtful and clear about what they are looking for.”

Aim to include:

• What you need and why
• Specific deliverables and timelines
• Relevant skills or experience
• Context around how the work fits into your team or goals

Use contracts to lock in clarity

Think of the contract as a shared source of truth, not just a formality. A good freelance contract should cover:

• Scope of work. Use the project scope and statement of work to spell out exactly what the freelancer is responsible for.
• Payment terms. Define the rate, whether the project is hourly or fixed-price, and when invoices and payments are expected.
• Deliverables and deadlines. Outline the project deliverables, timelines, and any required milestones.
• Copyright and IP. Clarify who owns which assets and when ownership transfers — often once the final invoice is paid.
• Confidentiality. Include a clause covering how sensitive information should be handled.
• Termination. Define how either party can end the engagement and any conditions tied to that process.

Upwork auto-generates contracts based on your job post, and Uma can help fine-tune scopes or flag unclear areas before you publish.

“I just give the talent lots of details and we communicate openly, so they know what’s expected. We’ve found success across the board, to the point that we’re still reaching out and using the same people on the platform.” 

— Cathy Bissell, founder, BISSELL Pet Foundation

6. Handle classification and legal details with confidence

Working with independent talent comes with legal responsibilities, especially around classification. The rules vary by location and industry, but a few basics can help you stay on track.

Know the difference: contractor vs. employee

There’s no universal test, but here’s a quick guide:

• Employees: Ongoing work, fixed hours, regular oversight, and tools provided by the employer
• Independent contractors: Project-based work, flexible schedule, control over how the work gets done, and tools they provide themselves
  

The key is how the work is structured, not just what you call the role.

Learn more: Hiring Freelancers? How To Avoid Worker Classification Mistakes 

Check for location-based or industry-specific requirements

Depending on where you and your freelancer are based, you may need to:

• Report payments
• Withhold taxes
• Meet data protection requirements (like GDPR or CCPA)
• Follow specific licensing or safety standards
  

Upwork provides built-in contracts and identity verification, but if you're hiring for ongoing or sensitive work, it’s worth checking with HR or legal for peace of mind.

7. Make payments smooth, secure, and stress-free

Predictable payments build trust — and help work move faster. But off-platform, things can get messy fast: missed invoices, unclear terms, or payment delays that stall momentum. “If you send a wire payment and the contractor doesn’t deliver, that money’s gone,” said Brent Schuck, director of marketing at Demco Products.

Demco relies on Upwork’s secure payment flows and consolidated monthly invoicing to keep work moving smoothly. “Hiring through Upwork removes a lot of that risk, so we can focus on the work,” said Schuck. 

Built-in safeguards help Demco bring in specialists quickly, without the financial or administrative uncertainty that often comes with off-platform payments. With Upwork’s payment protection, project funds are set aside and released only after you review and approve the work, so you’re never paying up front for something you haven’t received.

Here’s how to bring that same clarity to your own process:

Start with clear terms

Before work starts, confirm:

• Rate and payment method
• Hourly vs. fixed-price
• Invoice timing and frequency
• Who does what and when

If your company uses set net terms that could impact the payment schedule, flag that early.

Standardize your process

The fewer custom admin changes needed for every new engagement, the better. Trust features built into the Upwork platform have made the process even more reliable. 

Cory Hymel, VP of product and research for Corestory, said he particularly appreciates payment protection, standardized contracts, and the transparency of client feedback from previous projects. 

“Upwork feels like a very baked, repeatable, and scalable process to run through; it only takes 15 minutes to show members of my team how to do it,” Hymel explained.

You can build a workflow around:

• A single platform (like Upwork) or shared templates
• Consistent invoice and approval flows
• Shared visibility for any internal stakeholders

Close the loop with feedback

Ask freelancers how the payment process feels on their end. A quick adjustment early on can prevent confusion later.

8. Build a trusted bench of talent for the work ahead

Freelancers often work with multiple clients at once. ​​As business owners, many are skilled project managers who welcome repeat work and long-term relationships. That said, there’s always a chance a particular freelancer may not be available exactly when you need them.
One way to offset that uncertainty is to build a small bench of trusted freelancers who know your business and can step in when needed. Business Plus includes a centralized way to save, organize, and reengage your team’s go-to talent.

“Because we have our Upwork talent bench, we can say in our proposals that talent on Upwork is a key part of our last mile build strategy. I can be confident that we’ll have all the needs for a project filled in under two weeks. That pretty much beats out 98% of the other vendors.”

— Michael Contreras, founder and president, Ensemble Consultancy

Building long-term relationships with freelancers follows the same principles as any strong partnership:

• Clear communication. Be organized, responsive, and easy to work with.
• Flexibility. Leave room to adjust as you learn together.
• Appreciation. Recognize the impact of their work.
• Mutual respect. Combine your business context with their expertise.
• Trust. Confidence in each other’s reliability makes it easier to move quickly.
  

These relationships give you continuity and a dependable network to tap into as your needs evolve.

9. Course-correct quickly if work goes off track

Even with a strong setup, projects can drift. Timelines slip, deliverables miss the mark, or communication gets fuzzy. The good news: Most issues can be fixed with a clear reset.

Start with a shared reset

Go back to what you originally agreed on. What’s working? What’s not? Where’s the gap in understanding?

Often, the problem isn’t ability — it’s assumptions and unclear communication. A short, direct conversation plus an updated scope or milestone is often all it takes to get things moving again.

Decide whether to adjust or move on

If the work still isn’t meeting expectations, your next decision is whether to continue the engagement or close it out. Upwork contracts give you the flexibility to do either. For hourly projects, you can review the work diary to clarify how time was spent. For fixed-price work, payment is released when you approve the deliverable. If the quality isn’t there, you’re not obligated to approve it and you can end the contract cleanly.

Use arbitration if needed

If you can’t resolve the issue directly, arbitration is an option for fixed-price projects. Both sides share their case, and a neutral third party helps reach a resolution based on the original terms.

Keep momentum with a fast replacement

If you decide to part ways, don’t lose time. You can:

• Revisit your original shortlist
• Use Uma to find new aligned candidates fast
• Turn to your saved talent pool or team’s network

A project slipping off track doesn’t need to derail your timeline or your confidence. With the right structure, it’s just another manageable step in the process.

Upwork helps you move faster — with less risk

The value of independent talent is clearest when timelines are tight and quality matters most.

“What’s the value of a project going out on time — and what’s the impact if it doesn’t?” said Alfie Callan-Shropshall, head of talent at Crownpeak. “Without independent talent, would we have been able to deliver the same quality? Would we have had the right skills on the team? There’s an opportunity cost when you can’t get the talent you need into place.”

Upwork gives you tools to reduce that opportunity cost. These tools don’t replace your judgment, they support it — so you can find, hire, and work with trusted professionals confidently, even when the stakes are high.

Ready to begin? Start your search for talent here.