More and more companies go to marketplaces where they try to find experienced freelancers with corresponding skills and entrust work to them. But what benefit can they get?
In five years since the beginning of the 2008 global economic crisis, a wave of job cuts has been observed all over Europe. On the average, one-in-ten workers have lost their job through no fault of their own. In 2013 the unemployment rate in Russia dropped to 5.8%, in Ukraine it was equal to 8% and in German – 5.3%. International Labor Organization predict that by the end of 2016 the number of people unemployed worldwide will exceed 200 million people.
Freelancers worldwide
Freelancers in the EU
From the beginning of global economic decline, there was a rapid development of a new freelance working class in the European Union. The number of independent specialists increased 45% from 6.2 in 2004 to 8.9 million people in 2013. They constituted on average 25% of the European Union labor force.
Freelancers in USA
Last year (2015) outsource workers made up about 34% of American labor force. The total number of freelancers has also increased 700 thousand people since 2014.
According to a survey conducted by Freelance Union, 60% of freelancers chose to start their career as independent or temporary employees. Besides that, they claim that their earnings increased significantly, after they left their permanent jobs. Half of freelancers love their job so much and even all the money in the world won’t make them leave it.
Freelancers in Russia
By the beginning of 2015, there were about 2 million freelancers in Russia. According to National Research University Higher School of Economics, 79% of Russian freelancers consider opportunity to master their own time and make their own schedule the biggest benefits of remote working. Earnings by no means played a key role in choosing a career. However, freelancing does have its disadvantages as well. Almost half (44%) of freelancers consider high risk of fraud the biggest disadvantage of remote working. Dishonest customers can pay nothing for the work done by freelancer.
In Russia, freelance designers prevail over other freelance jobs and make up 38%. The second place goes to translators and copywriters. The 3rd and 4th place belongs to developers (29%) and programmers (20%) accordingly.
Freelancers in Ukraine
In 2014, Ukrainian freelancers earned more than 60 million dollars. The next year their income increased by almost 25% (about $75 million). In spite of the fact that the rate of the unified social tax in Ukraine has decreased almost twice from 41% to 22% since January 2016, it is quite logical that the owners of small and medium business try to minimize their expenses. The Ministry of Economy stated that salary increase for permanent employees was one of conditions for rate decreasing. To kill two birds with one stone (use a reduced rate and pay less), Ukrainian companies increasingly require services of remote employees. Last year (2015) 20% of companies in Ukraine hired temporary workers. The benefit of such cooperation is obvious: companies save 1.7 billiard UAH a year because there is no need to purchase equipment for employee, rent extra workspace and pay much tax.
A joint research of GFK Ukraine and Bitrix24 showed that the smaller the business, the more active it cooperates with independent specialists. It proves the tendency of startups rapid growth in comparison with big companies deeply rooted on the market. Startups are more mobile and willingly introduce new technology and popular trends into their work. Besides that, more and more startupers use so-called lean-principles in developing their business.
Freelance movement gathers pace every year. A number of freelancers also increases worldwide and by 2025 it is expected to reach 3 billion people. There are many reasons why more and more people become outsourced employees.
Reasons of freelance growth:
- High unemployment rate and job cuts
- Opportunity to work from anywhere for any company
- Income is determined by employee, not by employer
- Flexible hours
- Saving time and money on home to work travel
- Free choice of occupation
- Reducing the influence of human factors
Sometimes new terms specifying freelancer’s occupation may occur. For example, devlancer (freelance developer) or lingualancer, i.e. freelance linguists (translators, copywriters, language tutors, guide interpreters). According to Payonneer, only 44% of independent specialists find work on freelance marketplaces.
Newspaper Segodnya reported that according to its sources, by 2017 35% of Ukrainian companies will be provided with virtual workplaces. We hope freelancers won’t have any issues with registration of their professional activity.
Why companies hire freelancers
- 90% of top managers think that outsource remains economically profitable
- Every year companies save on freelancers on average $630 due to cost reduction
- No need for regular control
- Working hours selection
- Opportunity to hire employees from different countries and cities
It should be noted that Ukrainian freelance developers occupy majority of the freelance market share in Eastern Europe. According to TopsDev, a half of total tasks for Ukrainian programmers come from American customers.
Growth in demand for freelance services undoubtedly provide huge benefit to small and medium business owners. Maybe in the near future we will evidence higher employers’ loyalty to freelancers and witness the tendency of social benefits provision to freelancers. Increased competition among freelancers leads inevitably to increased development of their professional skills. It cannot but please their potential customers.
On the other hand, technology development and globalization influenced the increasing demand for knowledge in the field of digital technology and proficiency in several foreign languages. So in the near future freelancers who meet the required skills should not be worry about job cuts.
