Imagine a young graphic designer located in the city of Forbach, in the North of France. The jobs keep coming in. And after a year, the designer starts a full-on freelance business, designing logo’s for one of France’s leading unicorns. Now, if that person would spend 10 minutes on the RE18 bus to Saarbrücken, just over the border in Southwestern Germany, perhaps the same job opportunities would not be available to them.
A continent of many differences
Although often viewed from afar as one place, Europe has always been defined by subtle intricacies and differences. Whether through legislation or tradition, the continent has always seen vast differences between neighbouring countries. For Germany and France, those differences couldn’t be bigger in terms of its freelancing regulations.
Whether through legislation or tradition, the continent has always seen vast differences between neighbouring countries.
With the number freelancers on the rise, France introduced a new, simplified system in 2011. With that number, freelancers were able to get a registration number in less than 48 hours. It meant that the freelance graphic designer could invoice customers with limited taxation up to €70,000 per year, regardless of company size. In Germany, you cannot meet any client with more than 250 employees without having to deal with the Scheinselbstständigkeit.
The ‘monster law’ leading to fewer freelancers in Germany
The Scheinselbstständigkeit translates into ‘false self-employment’. It is a complex model Germany which has often been referred to as a ‘horrid monster of German Labour Law’. It seeks to differentiate between those working singular freelance jobs (for one main contractor). As opposed to multiple contractors, which is required under German legislation for freelancers.
German tax authorities take the Scheinselbstständigkeit very seriously as a form of social security fraud.
False self-employment occurs when someone, according to the underlying contract, provides independent services or works for a third-party company, but actually does non-self-employed work in an employment relationship. German tax authorities take the Scheinselbstständigkeit very seriously as a form of social security fraud — and it can lead to enormous fines and even a prison sentence when found guilty.
France has seen a 16% increase in its amount of freelancers, while Germany has seen a 16.8% decrease over the same time-period.
Over the past 10 years, the two respective policies have ensured movements in opposite directions. France has seen a 16% increase in its amount of freelancers, according to Eurostat. Germany, meanwhile, has seen its freelance percentage decrease by 16.8% over the same time-period.
Europe’s total number of freelancers has decreased
Spain, Belgium, The Netherlands have also seen its freelance workforce grow over the past ten years. But overall, Europe’s total number of freelancers has steadily decreased. The continent’s workforce consists of approximately 14.02% freelancers. Eurostat data shows that there were roughly 27.6 million self-employed people working in the 27 European Union countries. Remarkably, that number is down by around million compared to ten years earlier. In 2010, Europe had 28.8 million self-employed workers at a 15.42% rate.
Remarkably, the total number of freelancers number is down by around million compared to 2010.
Digital freelancers are older than you’d think
In 2020, freelance platform Malt and Boston Consulting Group (BCG) jointly conducted a survey of more than 2,324 respondents in three countries (France, Germany, Spain) to better understand freelancing dynamics in Europe. It was able to gather information on ‘digital freelancers’. A group defined as ‘independent workers who deliver intellectual, professional services to companies’.
In France, the average age of freelancers is 37. In Germany, the average age lies at 45. And in Spain, the average is 40.
“It is a population of about 6 million individuals in Europe: consisting of those working in Tech & Data, Arts & Design, Marketing & Com, Business Services, Support Function and others like legal, purchasing and research”, Quentin Debavelaere of Malt wrote. Their research paper disputes the notion that freelance jobs are predominantly done by millennials. In France, the average age of freelancers is 37. In Germany, the average age lies at 45. And in Spain, the average is 40.
Once a freelancer, always a freelancer
Most freelancers don’t start off as a freelancer, according to the Malt and BCG report. “In most cases, they have built up their skills for years as employees before moving on to becoming independent consultants going from project to project”, the researchers state. Overall, the research found that 94% of current freelancers used to work full-time for a company.
On average, 84% of freelancers in France and Germany don’t want to go back.
But when freelancers eventually make the leap, a vast majority of them don’t want to go back to full-time employment. On average, 84% of freelancers in France and Germany don’t want to go back, while 74% of Spaniards are not looking to surrender their autonomy. “This trend is even stronger for freelancers working in tech and data in France (89%) and Germany (95%)”, the report adds.
‘Freelancers are crucial to the digital revolution’
Finally, the report uses the freelancer’s way of operating as a perfect example of how companies can accelerate their digital transformation. “Working for the most part remotely, freelancers are particularly adept at new ways of working such as agile mode, and they devote nearly 5 hours a week to developing their skills”, says Vinciane Beauchene, Managing Partner & Director at BCG. “This provides an interesting example of how to successfully develop a digital culture and train internal staff in new ways of working.”
“Autonomy and trust allow people to move quickly and make the right decisions. Freelancers are already a great example of what this new approach to work can yield.”
“In the future, companies will have to extend more freedom to their employees and let them choose what is best for them”, the report concludes. “Control costs time, whereas autonomy and trust allow people to move quickly and make the right decisions, both for themselves and for the company. Freelancers are already a great example of what this new approach to work can yield.”