What we learnt from the first ever European Freelancers Survey
Some reflections on how freelancing is changing the way we work, and what problems still need to be solved.
Freelancers are an important, but somehow hidden, part of the small business population, and one that is largely miscalculated and misunderstood.
The results of the first ever European Freelancers Survey by Malt and European Forum of Independent Professionals offer a sophisticated perspective of the freelance workforce in Europe. The report supports the view that, as Laetitia Vitaud put it …
“Freelancers are challenging the definition of work that we inherited from the industrial age”.
These findings serve as a compass to better understand freelancers’ experiences, the hurdles they face and the improvements they demand.
Megatrends in The Future of Work
Freelancing isn’t new, but the rapid, global, growth of freelancing is new.
The emergence of this reality of work can be traced back to a series of developments that took place over the past 20 years like globalisation, the technological revolution, increased mobility, and demographic changes. Collectively, these forces give rise to an overall trend in freelance working.
However, the one driver that has helped the most to democratise self-employment is the rise of freelancing platforms. There are now freelancing platforms for nearly all highly-skilled professions, even one for oil and gas contractors and one for psychotherapists.
According to the European Freelancers Survey …
A staggering 42.7% of respondents use freelancing platforms to find work.
This is not surprising. Advantages of working on platforms are fourfold:
- It gives freelancers the power to exercise control over their workload and portfolio, giving them a greater degree of flexibility than employees.
- It allows them to be paid for their output — the completion of a project, rather than their input — number of hours worked.
- It allows them to begin work immediately without infrastructures, funding, a business plan and to learn business skills as they go.
- By working on short term assignments, freelancers can keep their business at a manageable size, balancing income generation with creativity, freedom, self-reliance and well-being.
And the good news is that these arrangements seem to be making people happier too: a recent survey from the UK Royal Society of Arts shows 84% of self-employed are happier in work than employees, despite the fact that they may earn less!
Working on Freelancers Platforms: The Problems
But unfortunately, it’s not all sunshine. There are 3 main challenges that freelancers working on platforms face:
- Lack of Regulation: Despite notable exceptions, legislation designed specifically for platform work is virtually non-existent. Although all freelance platforms have basic rules in place, they are rarely comprehensive enough to be effective.
- Borderless Market: Freelance work can often be done remotely. The removal of geopolitical restrictions has introduced a new set of challenges, such as contract enforcement (or lack of it), cultural misunderstanding, and bidding wars between freelancers in developed and developing economies.
- Subjective Success: Unlike ordering a pizza via an app, which you can determine success by looking at whether the correct order is delivered promptly, the success of a freelance project is often subjective. When success cannot be defined objectively, disputes will naturally arise.
In addition, the current legal differentiation between employees and self-employed in many countries has the unintended side-effect of preventing platforms from providing more support to their freelance workers (e.g. offering them training or additional insurance) because the support given could transform the relationship into an employment one, thereby attaching a bulk of legal regulations to comply with.
This is why platforms and local authorities should co-create safe harbors, as laboratories to experiment with flexible work arrangements. They should support the development of local platforms letting companies use freelancers without fear of liabilities if they might later be reclassified as employees and use big data to monitor trends.
Art. 49 of the Treaty of Functioning of the European Union states: “the right to take up and pursue activities as self-employed”, which everyone should enjoy. However, there are a number of recurrent problems that the self-employed face in fulfilling their rights. These mostly relate to “access conditions” in relation to: markets, public procurement, finance, insurance, social security, training, infrastructures, dispute resolutions and tax benefits that should be available to freelancers at the same levels and conditions of employees … but they are not.
What Social Security for Freelancers?
As a matter of example, the topic of access to social security for the self-employed is very hot these days, with a polarised public opinion and many who are asking the wrong questions.
We shouldn’t complain that Uber drivers don’t get full-time benefits; we should reconsider why benefits and security come attached only to full-time jobs. The challenge is much harder than making Uber treat its drivers as “employees.” It involves dramatically redesigning the safety net and how we classify workers and companies.
That might mean finding ways to fund portable benefits that would cover workers who piece together freelance jobs and new forms of insurance to protect against episodic income. It might mean allowing independent workers to collectively bargain with the platforms they work for. It might mean considering something like a universal basic income, which would counteract the insecurity of gig work. Or new inexpensive arbitration schemes to avoid litigation in courts for freelancers against non-paying clients. Or even designing a portable reputation system so that platform workers can carry their own reviews and ratings from platform to platform rather than starting all over from scratch.
Many critics assume, wrongly, that the gig economy is an end in itself. A life revolving around digitally facilitated piecework is not a sustainable option for most. However, the real value of the gig economy isn’t in its intermittent income streams, or the unconventional hours; it’s in the mindset it breeds. For many people, it has instilled the principles of entrepreneurial hustle and introduced the idea of being their own boss. The gig economy doesn’t have to be a dead end. It can be a door to a whole new world of work and a way to make work revolve around life rather than life revolve around work.
People who are sceptical of all this, are making an unfair comparison between new forms of work and today’s full-time employment. Full-time employment at scale has been around for decades. And we’ve had plenty of time to understand the huge imbalance in bargaining power between the individual and the institution, and to correct it in a wide variety of ways.
Takeaways for Policymakers
How can policymakers navigate this maze? When some European countries have suggested that even its civil servants may become digital nomads, guidance is needed.
Policymakers need to steer away from a “one size fits all” approach. They need to recognize the diversity in the self-employed labour market, and attempt to divide it into (1) advantaged, (2) disadvantaged and (3) false fragments. They need to device targeted measures that:
- Legitimize, professionalize and support the advantaged fragments;
- Protect the vulnerable fragments;
- Clearly set out the difference between false and genuine self-employment so the former can be avoided.
In other words, they need to foster a policy environment that promotes a variety of contractual arrangements as a way to increase labour market participation and inclusion.
The tremendous variation of interests, incomes, and affiliations among independent workers has always made it problematic to forge a strong and unified voice. The European Freelancers Survey demonstrates that time has come to right that wrong. The debate around independent work should no longer be confirmed to the margins. It’s a mainstream employment arrangement, and the atypical has now become typical.
But we must do more if we truly want to democratize self-employment and turn red tape into red carpet for the smallest businesses of one. Policymakers need to nurture this growing sector of the workforce, create low entry barriers, and ensure everyone has a reliable option to work in the way they choose, while having access to a social safety net.
As elections are looming in the European Parliament and in a number of European countries, it would be a lost opportunity for political establishments not to gather support of this large and engaged constituency, to whom elected officials should pay more attention.
As one MEP has recently told me in the European Parliament …
“No politician has ever been elected promising more freelance work”.
Let’s work to fix this!
I’d like to extend huge gratitude to the Croatian Independent Professionals Association, the member of EFIP who has worked with Malt on this report.
Thanks for reading 🙌
If you are also working at the intersection of policy, HR and technology in the platform economy, I’d like to know you. Get in touch at @MarcoTorreg or about.me/marcotorregrossa or in the comments below.