Shall you work with agile coaches based on a freelance contract?
Nowadays I see many companies that struggle with hiring agile coaches (or ScrumMasters) as the current market in Germany is highly competitive.
Based on past experience working with freelancers is considered to be expensive and is connected with knowledge lost drawbacks. But what are the advantages?
With this post I share some thoughts on working with agile coaches on a freelance contract base, considering pros and cons including a simple cost calculation.
Reservations
I observed the following reservations:
- Costs are significantly higher than for employees.
- Freelancers accumulate quite a lot of knowledge about the company and culture. And that knowledge gets lost as soon as they leave the company.
- They will not get that heavily engaged with the companies culture and values (and just follow their own interests).
- They are quick to jump to other (better) opportunities.
- Team connections and team building is irritated when they leave the team.
Benefits
What are advantages of working with freelance agile coaches?
- You will find appropriate freelancers fast (and therewith you reduce your cost of delay of not working on important team improvements).
- You bring in fresh knowledge (regarding technologies and methods to use), often accumulated from many projects in different companies.
- You buy high flexibility and the ability to scale (also down) based on the teams and product lifecycle.
- Cross pollination to other companies, when the freelancer joins a next opportunity (if your company was a great place to work at they can spread the word about the product and working environment. For sure that can work in both directions – bad products and/or bad place to work at, will spread too).
Lets do some simple math
You can find a simple freelance investment calculation (just create a copy and use it with your numbers).
In the following calculation I assume an monthly team performance improvement of 10%.
I guess that is fair enough when working with young/not yet mature team formations (and you could expect even higher improvement rates in the beginning).
In addition I assume the freelancer could work with 2 teams in parallel (thats why 14 team members … just reduce it to e.g. 7 when you think differently).
On top of the team improvement I consider the earnings of being online earlier with a feature (cost of delay*-1), based on the teams performance improvements.
In the example the feature has earnings of 5k a day and through a 10% team improvement is two days earlier online.
If you sum it up, the investment in working with an agile coach on a freelance contract base pays off (you gain 9k per month, it would be 2k/month for 7 team members).
| Total team(s) member count | 14 | |
| Run rate per day and team member | 500,00 € | |
| Expected improvement/month | 10,00% | |
| Freelance run rate/day | 750,00 € | |
| Days/month | 20 | |
| Team investment | 140.000,00 € | |
| Freelance investment | 15.000,00 € | |
| Gain through team improvement | 14.000,00 € | |
| expected feature earnings/day | 5.000,00 € | |
| earlier online due to team improvements | 2 | days |
| earnings through being online earlier | 10.000,00 € | |
| win by freelance investment | 9.000,00 € |
It will not work if you expect much lower earnings for your product per day (could be due to an unimportant project) and if your team improvements are not that high (due to an already mature team).
It will heavily outperform for top features with much higher earnings/day. In addition with huge team performance improvements you can gain a lot.
Update:2016-05-31: In this post working with freelancers should be seen as just a substitute for working with external support. It can be consulting companies or freelancers or other ways of external support. There are clear pros and cons for one way or another that are not part of this post. Thanks to Luis for your comment on that perspective.
What do you think? Am I missing major parts in my calculation? What are more pro/con arguments to working with agile coaches on a freelance base? Thanks for your comments.
Hi Sebastian, I had the same discussion again and again over the last weeks and I can tell you why companies should not hire freelancers and should hire trusted companies that would provide competent people until they are able to hire internal ones… 1) Usually Freelancers they are not people that think long term, of course there are exceptions but usually they think day by day. It happened to us several times that freelancers demanded higher rates (and I am talking of 40-50% increase on their daily rate) in the middle of the contract and if we do not give… Read more »
Hey Luis, thanks for your great comment and all points are highly valid and make sense to me. In the post I just tried to open the perspective that working with external support is an really important aspect to consider. I accidentally mentioned just freelancing but did not yet include companies offering professional support. I’ll add a new note to the post to clarify things. In my experience I agree with your input, that working with companies that can offer substitutions, can help with scaling and are interested on long term relationships should be preferred to directly working with freelancers.… Read more »
Great article Sebastian, Thanks a lot for that. It makes a lot of sense to have this conversation in exactly this way. Besides proofing the value of an external/freelance coach it also allows to question why certain development initiatives are being done at all if the margin is so low (<5k/day as in your example).
Cheers, Markus
Great point Markus. In the end these are the questions to be asked. It could even lead to pressure on internal agile coach usage too – but – it makes it at least more transparent, that results like team performance improvements and working on the important topics should be the areas where we come into play.
Hi Sebastian
You got a great point and I have posted it in Linkedin and Twitter. Many companies can’t understand and appreciate the value of hiring freelance Agile Coach as you and myself.
Kind Regards,
Mario
Great Mario – thanks for sharing it and I hope some companies will get the point.
Dear Sebastian, Thanks for your interesting thoughts on this topic! I agree with you that it’s useful to do some very rough business case calculations. Yet, I do really think that it does no good in suggesting and striving for a pseudo-accuracy. To take your example: I believe you calculated the gains twice. Once through the team performance improvement and once through the earlier completed feature. It is at least unclear whether this is not only one effect that hence should be calculated only once. Secondly, a feature that brings you 5k a day accounts for 1.8 billion per year.… Read more »
Great input Jan, thanks for your comment. I agree with your double booking argumentation. I guess it is simpler to use the team performance argumentation. One needs to establish proper measurements on team performance (not that easy, as they can be gamed easily). On the other hand if you work on a tough feature, I would recommend to switch to the cost of delay argumentation instead and I would bet that the 5k/day are possible. Regarding the new storming phase it depends on the time when you start with the external coach. If it is in an early stage, when… Read more »
[…] http://www.ontheagilepath.net/2016/05/why-you-should-with-agile-coaches-on-a-freelance-contract-base… […]
Great tips!These are the most interesting suggestions I’ve ever heard for freelancing.” I’ve never even heard of these
websites, but they sound absolutely brilliant! Thanks so much for sharing this!!
Hi! Great article, thank you!
I believe if you’re in need of a good freelance coach you should look here: https://www.xplace.com/coaching/freelancers. This freelance job board is just wonderful: it has a great number of various job opportunities in any field for any level of expertise (from entry-level jobs to complex ones), a lot of competent freelance experts able to help with any difficult task, higher hourly rates than on other platforms for freelancers, and no commission fee requirement (so you can save more money).