Organizations Are Increasingly Excluding Freelancers
In recent years, we have observed a continued increase in the number of freelancers. However, we hear more frequently from the market that large companies are disadvantaging freelancers. In this blog post, we explore the potential causes of this trend.
Current situation and Trends
We observe that large organizations are increasingly reluctant to collaborate with freelancers, a sentiment echoed in the market. This phenomenon, where major players disadvantage freelancers, appears paradoxical, especially during a time of labor market shortages. Excluding a significant portion of the talent pool can lead to difficulties in filling vacancies, which in turn hampers productivity and the progress of projects.
Reasons for Excluding Freelancers
There are several reasons why large companies are increasingly choosing not to work with freelancers.
1. Risk of False Self-Employment
Large companies want to avoid the risk of freelancers being classified as false self-employed by the Tax Authorities. This means that the freelancer should actually be treated as a regular employee. The company would then still have to pay wage tax and social security contributions, just like for regular employees. This can lead to additional costs and administrative burdens for the company.
2. DBA Law
The Deregulation of Labor Relations Assessment Act (DBA) causes much confusion about how clients and freelancers can work together. Despite the enforcement of this law, introduced in 2016, being postponed multiple times, the uncertainty remains. This makes large companies more cautious about hiring freelancers. They are afraid of making mistakes in assessing labor relations and want to avoid problems with the Tax Authorities. This has led to a decrease in the number of assignments given to freelancers by large companies.
3. Complexity and Administration
Hiring freelancers brings administrative burdens and legal complexities, such as drafting proper contracts and complying with regulations. Large companies often find this too complicated and therefore prefer to hire employees or collaborate with staffing agencies. These agencies then take responsibility for the administration and rules around hiring personnel, which means less hassle for the company.
4. Costs
Sometimes freelancers are considered more expensive than permanent employees, especially if the assignment is long-term. Companies want to save costs by offering permanent contracts or using cheaper labor. In this way, they try to reduce their expenses and stay within budget.
5. Changes in HR Policy
Some large companies are adjusting their personnel policies and want a more stable and controllable group of employees. This means they prefer permanent employees over temporary workers like freelancers. This way, they can better plan and ensure the continuity of their operations.
Advantages of Working with Freelancers
Despite the mentioned challenges, collaborating with freelancers offers significant benefits for companies:
1. Specific Expertise
Freelancers can provide specific expertise and skills that may not be available within the company. This allows the organization to flexibly respond to changing project requirements and temporary needs without the obligation to hire permanent staff.
2. Cost Efficiency
For short-term and specialized projects, freelancers can be cost-efficient as there are no long-term commitments like those with permanent employees.
3. Flexibility
Freelancers can adapt quickly and are often more flexible than permanent staff. This is ideal for companies that need to respond swiftly to market changes.
4. Innovation and Creativity
Freelancers bring new ideas and innovations that can enhance the company’s dynamics. Their fresh perspectives can stimulate innovation and creativity within the company.
Solutions for Collaboration
To improve collaboration between large companies and freelancers, companies can consider the following steps:
1. Use of Standard Contracts
Use standard contracts approved by the Tax Authorities to clarify the employment relationship and prevent false self-employment.
2. Legal Advice
Engage legal advice to ensure clarity on employment relationships and follow the correct procedures when hiring freelancers.
3. Sector-Specific Approach
Understand the differences between sectors and adjust the hiring strategy accordingly. In sectors such as IT, the demand for freelancers remains high due to rapid technological advancements and the need for specific skills. Firms specializing in a particular industry can assist in this regard.
Conclusion
In the future, we are likely to see a further shift in how large companies handle freelancers. Due to increasing pressure and risks related to false self-employment and legal complexities, companies will be more inclined to opt for alternatives such as permanent employees or contracting through agencies. However, the advantages of working with freelancers cannot be overlooked.
Working with Freelancers?
Are you unsure about the benefits of working with freelancers for your organization or team? We are happy to help you make a choice that aligns with the desires, needs, and culture within your company. Curious about the possibilities? Ask a question without obligation or make an appointment directly with one of our colleagues via our contact form.
