Is freelancing the future of work?

    Business Spotlight 11/2022
    A woman working by the beach
    © Daria Mamont/
    Von Joanne Foster

    Freedom, flexibility and work-life balance — this is what freelancingfreiberufliche Tätigkeit, Selbstständigkeitfreelancing can offer. And today, it’s easier than ever for companies to hire non-permanent staff on a project-by-project basis. But does the carefree contractinghier: als Auftragnehmer(in)contracting lifestyle to live up to sth.etw. gerecht werdenlive up to the hype?

    “Although there’s more uncertainty around the cost of living right now, overallalles in allemoverall, the pandemic has led to greater openness and freedom,” says Suzanne Ives, who has two different non-permanent roles: as a part-time university lecturerDozent(in)lecturer and a small-business owner in the UK. “I’m lucky — every day is different, I can pick and choose, mix my own professional ambitions and support my family.”

    The flexibility Ives loves was a far-off dream during her two decades as an employee in finance and strategy. In her mid-30s, she decided to study to become a midwifeHebammemidwife, later adding further qualifications to become a lecturer. At the same time, she helps her partner to run sth.hier: etw. betreibenrun their motorbike-transport company. “Midwifery was fulfillingerfüllendfulfilling, but giving something to the next generation was my end goalZielgoal,” Ives told Business Spotlight. “to growhier: sich weiterentwickelnGrowing as a person fills you with confidence. I’ve become someone who’s open to risk. I’m not frightened to put myself in any situation.”

    Flexibility and meaningful work

    All the things Ives values as a freelancer — balancing different roles, growth and personal fulfilment — are now increasingly on the workplace agendaTagesordnung; hier: Programmagenda of large companies. In his influential annualjährlichannual letter, Larry Fink, the CEO (chief executive officer)(Firmen-)Chef(in), Geschäftsführer(in)CEO of investment giant BlackRock, wrote: “No relationship has been changed more by the pandemic than the one between employers and employees.” Five days in the office and ignoring well-being are out; flexibility and meaningful work are in.

    Increasing numbers of workers are leaving traditional employment relationships, having seen that a new way of life is possible. In the US and the UK, resignationKündigungresignations hit historic highs in 2021 and 2022.

    Marie-Hélène Chrétien, a procurementBeschaffungprocurement manager at Airbus in France, has lots of experience of buying in services, and she has witnessed these changes first-hand. “Time has become very important in the post-pandemic workplace,” she says. “Companies are seeing their staff leave for more flexible roles, and the marketplace is now very competitivewettbewerbsfähig, umkämpftcompetitive.”

    The increase in freelance services

    Chrétien says, to to retain sb.jmdn. haltenretain talent, companies must look at their culture, systems and processes. Company culture is changing: organizations increasingly work in project mode, and competition is making recruitmentPersonalbeschaffungrecruitment harder. This opens up space for more non-permanent staff to to fill sth.hier: etw. besetzenfill talent gapLücke; hier auch: Defizitgaps. At the same time, there has been a rise in digital talent platforms, such as Toptal, Freelancer, Upwork and Fiverr, which allow businesses to find skilled freelancers with a mouse click.

    A 2020 report by Harvard Business School and Boston Consulting Group explored how these platforms offer companies more flexible accessZugangaccess to talent. The study shows rising numbers of people turning to freelance work during the pandemic and a corresponding rise in the number of companies joining digital talent platforms. Furthermore, nearly half of all respondentBefragte(r)respondents expected to use the platforms significantly more in the future. This underlines the report’s conclusionFolgerung, Fazitconclusion that on-demand workforceBelegschaftworkforce strategies are here to stay, and companies will need them to stay competitive.

    Simon Brown leads a technology team at the broadcasterSenderbroadcaster Sky in London. He joined as a permanent employee just before the pandemic, after more than a decade freelancing — or “contracting”, as it’s known in IT. His current role involves hiring contractorAuftragnehmer(in)contractors, and he highlights the flexibility, productivity and innovation they bring. “You get what you pay for,” Brown says. “Most contractors bring in top-drawexzellenttop-draw experience and get the job done. They often write high-quality code that more juniorhier: jüngerjunior employees can learn from.”

    Freelancing for all?

    What’s to stop all of us going freelance? For one thing: regulations, particularly laws to to combat sth.etw. bekämpfencombat tax evasionSteuerhinterziehungtax evasion. Chrétien explains that France (like many other European countries) has laws to design sth.hier: etw. konzipierendesigned to prevent freelancers from being “disguisedgetarntdisguised” employees. “Individual freelancers are seen as a greater risk to larger corporationUnternehmencorporations, who prefer to work with agencies,” she adds. “The digital-platform model could work well here, as long as the platform providers are knowledgeable in to hire sb. outhier: jmdn. vermittelnhiring out qualified people.”

    The introduction of tax legislation in the UK’s private sector has had a disruptivestörenddisruptive impact(Aus-)Wirkungimpact on the IT industry, according to Brown. He says that those changes, along with the overall trend towards hybridhier: mit gemischten Arbeitsformenhybrid workplaces, have made being an employee more attractive again. The IT industry quickly adapted to remote workingArbeit(en) im Home- officeremote working, and as recruitment is so competitive, most companies have not tried to force employees back into the office full-time. “Ninety per cent of our work can be done using Teams, Slack and email,” he says, adding that he knows a number of employees who have moved to the countryside in the past two years.

    Recognizing more than the monthly salary

    Additionally, with greater freedom comes greater risk. There’s no guarantee that a short-term contractKurzzeitvertragshort-term contract will become a longer one. If the company strategy changes, freelancers can be shown the door with minimal warning. It can also be difficult to get a leaseMietvertraglease or a mortgageHypothekmortgage without an employment contract. “It very much depends on your personal situation and appetitehier: Lustappetite for risk,” Ives says. “It’s quite scarybeängstigendscary but also brilliantly exciting!”

    People need a stablesolidestable income for lots of reasons, including loanDarlehenloan repayments or supporting their children through university. “For the most part, I made those commitments when I was younger, so I have more personal freedom,” Ives says. “It’s not the case for everyone.” Brown adds that he rides a motorcycle and, as a contractor, he worried that an accident could have meant weeks without an income. And while he was happy contracting, he admits the financial package that comes with employment, including a pension, is a real plus.

    Not just a career but a lifestyle choice

    As this shows, even if the worlds of permanent and non-permanent employment are to convergesich annähernconverging and “blendedgemischtblended workforces” are becoming more common, freelancing remains an individual lifestyle choice. Since the pandemic, most employees can expect some more flexibility, but the rich variety of working for different clients, perhaps in different sectors, from one week to the next is mostly still reserved for freelancers.

    Brown says he’s pleased with his career but hopes full-time employment won’t make him get too comfortable: “I like the way freelancing to keep one on one's toesdafür sorgen, dass man auf Zack bleibtkeeps you on your toes and sharpens your skills. I still like to read up on the latest developments and keep challenging myself.”

    5 things freelancers in Germany should know

    1. False self-employment, when a freelancer acts as an employee, may be considered fraudBetrugfraud. The consequences can be serious for the freelancer and the employer. If 83 per cent or more of a freelancer’s income is from a single client or if they have a long-term contractLangzeitvertraglong-term contract with one employer, alarm bells will ring with the authorities.

    2. Freelancing on the sidehier: als Nebenerwerbon the side offers flexibility, extra income and reduced risk, but there are restrictions. Generally, you may work up to 18 hours a week in a side job, and it’s necessary to inform your health insurance companyKrankenkassehealth insurance company, as it can to affect sth.Auswirkungen auf etw. habenaffect social-security obligationsVerpflichtungen; hier: Pflichtbeiträgeobligations.

    3. All invoiceRechnunginvoices written and received must be kept for ten years, in case the tax officeFinanzamttax office has any questions.

    4. Paperless registration of a new business is possible via the Mein ELSTER platform, meaning a tax office visit is generally no longer necessary.

    5. The Institut für Freie Berufe, in Nuremberg, offers a free advisory call to those considering self-employment for the first time.

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