Currently, the freelance market is developing dynamically. More and more people are working as independent contractors, more and more small businesses are using freelance services.
Are you a part of the freelancing economy? Whether you are an employer or a job seeker, know that the relationship between employer and employee is changing. Are you ready for this?
Freelance and the gig economy
Welcome to the freelance economy! In 2016, 34% of the working population in the United States was engaged in freelancing. Some experts believe that by 2020 the number of freelancers will reach 50%.
According to a study by the European Forum of Independent Professionals (EFIP), the number of independent workers in Europe has increased by 82% since 2000.
There are many reasons for this. In the current economic climate, finding a permanent job is becoming increasingly difficult. Some people simply like the fact that they are free to choose with whom, when and where to work.
For others, freelancing is a great way to reconcile career and personal life. In any case, whatever the reason, the nature of the employer-employee relationship is changing. What does this mean for you? Read on and you will find out.
Features of working with freelancers
If you own a small business, hiring freelancers may be the best solution for you to get the work done on time without the need to take on the responsibility of recruiting staff.
An employment relationship with minimum requirements is especially good if you are just starting your own business and do not have the resources to maintain staff or need a specialist for just one short-term project.
Below are some aspects to consider if you decide to hire freelancers for your team.
Freelancers don’t work for free.
They deserve the same pay as you provide your employees with: timely and fair pay. When you hire a freelancer, don’t think you can pay him less than you pay a staff member.
In fact, you may have to pay even more because freelancers take care of the equipment, insurance and many other things you don’t have to take care of.
Freelancers need to be paid on time.
Hiring freelancers will certainly save you some of the paperwork. But only from a part. Freelancers will bill you for the work done and will expect them to pay in a timely manner (just as you expect the freelancers to perform their tasks in a timely manner).
If you do not pay your bills on time, you may have legal problems. Perhaps even the reputation of your company will be damaged, which will not contribute to your success in business. My advice to you: Always keep a proper record of your invoices and expenses!
Freelancers can be a great team.
If your team consists of several freelancers working together, treat them as a virtual team, which they are. Regularly discuss topical issues with the team, use one channel of communication for everyone – and your team will succeed.
Using the right tool for your work will also allow you to keep track of each team member’s time, so you will always be aware of the current costs, and the numbers in the invoices you receive from team members will never be a surprise to you.
Freelancers can leave, too.
Constant staff turnover does not contribute to the successful development of the company. Try to build long-term relationships with freelancers. Keep in touch with them and try to keep them informed of their intentions regarding the long-term relationship with you.
If, for any reason, a freelancer working for you decides to leave, ensure that the knowledge he or she has gained while working with you is passed on to the person who will replace him or her.
Freelancers can work for anyone. Even your worst competitor.
If you enjoy an employment relationship without undue commitment, you should understand that your freelancers can also enjoy all the benefits of such a relationship. Freelancers can stop working with you at any time and start working for someone else.
Even your worst competitor (unless otherwise stated in your employment contracts). So it’s best to keep a good relationship with your freelancers.
Features of freelancers
On the other hand, if you decide to take on freelance, you will have to take over the responsibility that was on your former employer’s shoulders.
In addition to doing your job, you will now have to do some other things – not very pleasant and time-consuming things, among them:
Payment of taxes.
You will have to pay your own taxes, which will require you to keep a record of your profits and expenses. I always advise you to file your tax returns on time and find out what taxes you have to pay in advance.
Are you a VAT payer? Do you know what tax breaks you can expect? If you are not sure of something, it is worthwhile to get professional advice on taxation.
Choice and payment of insurance.
What happens if you have an appendicitis? Or will you be a victim of an accident? Even if you are a perfectly healthy, careful and prudent person, you cannot be sure that nothing like this will ever happen to you.
Are you ready for such turns of fate? I understand that the mere thought of something like this can be horrifying. And this shows the extreme importance of this question. Do not postpone its decision until tomorrow. Find out what insurance you can buy.
Health insurance, legal insurance, pension program – all this is now in your hands. Talk to people you know, find information online, or ask for advice from a professional advisor – just make sure you get there as soon as possible.
Performing the work of an accountant.
Billing, budgeting, pricing are all part of the work of any freelancer. Don’t jeopardize your organization, save time and money by using good accounting, time tracking and project management tools. The right tools can make your job a lot easier.
Creating a working atmosphere.
For some, working at home in pajamas is exactly what you need. For others, working at home permanently can be depressing. Determine what type of people you are and create the perfect workspace.
Don’t be afraid to experiment: you may find the ideal environment to work at a local coffee shop or co-worker’s shop. Remember to include the costs in your budget.
Finding and retaining clients.
Now your only boss is you. But no. In fact, each of your clients is also your boss to some extent. After all, it is your clients who hire you and pay you your salary.
And if you are not the only professional of your kind or the best of the best experts in your field to keep your customers, you need to do your job in a timely manner, to be friendly in communication, to be reliable.
And don’t forget: working with clients is also your responsibility. You now have to be not only an accountant, but also a chief accountant. You need to be able not only to find, but also to retain good customers.
Freelance as a new form of employment
Hiring a freelancer is like dating an employee. Perhaps you will only be bound by a non-binding short-term cooperation with a minimum of obligations.
Or the first project will be the beginning of a long relationship that will last several years (and maybe a lifetime). Freelancing is like being in a free relationship: you can enjoy the relationship with many customers, get to know the different cultures of work.
Enjoy every minute of freedom and diversity! Who knows, maybe one day you will decide to devote yourself to working for one client, and you will be tied up in a great relationship for a lifetime…
Whatever your goal is and whatever role you play in these new working relationships, try to make them enjoyable, mutually beneficial and lasting.