FREELANCE MARKET INSIGHTS 2017
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1 FREELANCE MARKET INSIGHTS 2017 DIGITAL CREATIVE & TECH
2 WELCOME TO THE 2017 FREELANCE MARKET INSIGHTS REPORT Freelancers comprise 40% of the media workforce*, and the UK s creative industries grew by 8.9% in 2016 nearly double the growth of the overall UK economy**, according to government statistics. There is greater demand for freelancers than ever before, especially with the advent of the gig economy, but are freelancers treated as well as they could be? We feel that more could be done to improve the working life of a freelancer and we want to show how much we value ours. Major Players experienced a 30% increase in the number of freelance vacancies across the creative, digital and marketing industries over the past year. Many are attracted to higher rates of pay and a flexible work/life balance. However, maintaining a regular supply of work and late payment are just some of the challenges freelancers can face. Amid the rise of freelancers and an uncertain UK economy, we surveyed 231 freelancers in the creative, marketing and digital industries to uncover key insights into the freelance life from the average working hours, daily rates and downtime to the main issues they face, and motivations for deciding to embark on a freelance career in the first place. We also take a look at the use of online portals what freelancers like and dislike about them. Our research confirms that freelancers need a more consistent supply of work, a community of other freelancers and support from employers /recruitment consultancies to help their careers flourish, whether that be through networking and training opportunities or general career advice. We are, in fact, about to launch Major Collective a new community to help freelancers do just that. This report will also allude to the perspectives of employers why they hire freelancers, which times of year they tend to hire, and their hiring plans for the next 12 months. And we conclude with a future outlook on the freelance market. Allison Upton Marketing director, Major Players Call: *Source: 2016 Labour Force Survey, Office for National Statistics **Source: Creative Industries Economic Estimates, DCMS from ONS sources, Jan
3 CONTENTS MOTIVATIONS/SAMPLE 4 PAY 7 FREELANCE PREFERENCES 9 FLEXIBLE WORKING AND HOURS 10 CHALLENGES 11 SUPPORTING FREELANCERS 12 ONLINE PORTALS 13 EMPLOYERS PERSPECTIVES 14 FUTURE OUTLOOK 15 3
4 MOTIVATIONS KEY DEMOGRAPHICS OF PEOPLE WHO FREELANCE 53.5% male; 46.1% female (0.4% prefer not to say) Age Most have a Bachelor s degree Most of our respondents describe themselves as working in the creative industry Most hold senior freelance positions Copywriter, creative director and designer are the job types most of our respondents hold More than half work on-site with the employer More than a quarter work from a mix of workplaces mainly at the client site Only 16.2% work from home Most started freelancing in 2017 or 2016 The majority of those who have mixed freelance and permanent work have spent at least the past 18 months as a freelancer Most don t have a plan as to how long they will continue to freelance WHAT MAKES PEOPLE GO FREELANCE? Our respondents main deciding factor for becoming a freelancer was the flexibility of working when and with whom [they] wish, with 54% rating this as important or highly important. The second most important factor was variety of assignments and the third most important was more money. However, many stated that it wasn t an active choice either they were made redundant, the work they do doesn t lend itself to permanent positions, or they feel their age prevents them from securing a permanent role. IT S GOOD TO SEE THAT THERE IS LONGEVITY IN FORGING A CAREER AS A FREELANCER. THE MAJORITY OF THOSE WITH MIXED PERMANENT AND FREELANCE HAVE SPENT, ON AVERAGE, 18 MONTHS AS A FREELANCER Joanne Lucy-Ruming, director, Major Players 4
5 What factors influenced your decision to go freelance in the first place? FLEXIBILITY OF WORKING WHEN AND WITH WHOM YOU WISH TO WORK VARIETY OF ASSIGNMENTS THE POTENTIAL TO GAIN GREATER EXPERIENCE AVOIDING THE POLITICS INVOLVED IN COMPANIES IN A PERMANENT ROLE HIGHLY IMPORTANT IMPORTANT NEUTRAL NOT IMPORTANT NOT IMPORTANT AT ALL MORE MONEY Flexibility for school holidays/ children Improved work/life balance It frees me to pursue other creative opportunities This is an interim while I look for a perm job Lack of permanent opportunities It wasn t a choice. Made redundant in the shadow of Brexit There is no choice at my age I did not choose to be a freelancer To use both creative and analytical skills/ experience in a way fixed jobs don t allow Holidays and travel perm jobs only have about four week holidays 5
6 WHAT FREELANCERS SAY... The main advantage of working as a contractor is that I have the flexibility to choose who I work for and for how long. I have found it s a great way to build my skills and experience in a variety of sectors. Obviously another key advantage is that I pay less personal tax through my limited company. But the downside is that you do not get sickness or holiday pay or many of the other employee benefits. You are the brand and the company! Clare McKenzie I set up a limited company in May last year. I feel like I have more control over my finances than when I was with an umbrella company. Emily Bishop Designs Ltd, Freelance Design I decided to set myself up as a limited company for a couple of reasons. My accountant and I discussed my expected earnings for the tax year and whether a sole trader vs limited company would be the most beneficial to me in terms of how much I might save on tax (eg paying 20% and NI vs paying myself from a limited company as an employee and being paid dividends and corporation tax). The second consideration that I took into account was that some agencies prefer contractors to be set up as either a limited company or use an umbrella company it felt like it would just be easier for me to be a limited company as there was less admin involved in getting set up to be paid in a timely fashion by agencies. Lastly, I wanted to be set up as a limited company so that if, in the future, I decided to grow my business from a single freelancer (me) and hire employees, then the structure was already there to do so. Kat Davies I m set up as a sole trader. The reason why I haven t set up as a limited company is, for me, it seems to be a big hammer to crack open a small walnut. If I had more outgoings and there was more of a budget float to manage, I could see the benefits. It has stopped me working with one big agency because they would only contract me in a day-rate capacity if I was registered as a limited company (presumably because of the salary bracket and tax purposes). Lucy Austin IT IS VERY INTERESTING TO SEE MONEY WAS THE LEAST IMPORTANT FACTOR TO WHY PEOPLE FREELANCE, AND FLEXIBILITY WAS THE OVERRIDING ATTRACTION Allison Upton, marketing director, Major Players 6
7 PAY The majority of freelancers described their day rate as between , with more than half (54.4%) saying that their rate had been steady for the past year. Almost one in five (19.8%) said their day rate had gone up by over 10% while 8.8% said their day rate had decreased by more than 10%. ONE IN TWO FINANCIALLY BETTER OFF AS A FREELANCER More than half (52%) of the freelancers surveyed believe they are financially better off as a freelancer than they would be in a permanent role. Meanwhile, 60% would give up freelancing for a permanent role if the pay was suitable although about one in four would opt to remain a freelancer even if the pay was suitable. MALE VS FEMALE PAY A gender pay gap is evident in the freelance industry, with more men than women earning the highest daily rates, while more women than men earn the lower ones. Almost a quarter (23.5%) of female freelancers earn the relatively low daily rate of between 200 and 249, whereas only 9.6% of male freelancers earn this rate. Meanwhile, 31.2% of male freelancers earn a daily rate of 400 or more, compared with only 12.2% of female freelancers. However, the gap is slightly smaller for those earning 500+, indicating that there are opportunities for women to earn some of the highest rates. SADLY THERE IS A DISPARITY IN DAILY RATES BETWEEN THE GENDERS AVERAGE DAILY RATE: THE AVERAGE FOR FEMALE FREELANCERS 292 THE AVERAGE FOR MALE FREELANCERS 350 7
8 Male vs female pay FEMALE MALE IT S DEVASTATING TO SEE THAT THE SAME PAY GAP THAT EXISTS FOR PERMANENT SALARIES ALSO EXISTS WITH FREELANCERS. EVERY FREELANCER SHOULD BE REGULARLY BENCHMARKING THEMSELVES AGAINST THEIR PEERS, SPEAKING WITH THEIR AGENTS TO MAKE SURE THAT THEY ARE ON PARITY, AND ENFORCING THAT THEY ARE PAID WHAT THEY RE WORTH Laura Jordan Bambach, chief creative officer, Mr President 8
9 FREELANCE PREFERENCES Most freelancers prefer to work for a limited company, but most cite no preference as to whether they work for a brand or an agency. The most popular industries for freelancers, when working for a brand, are Technology, Entertainment, and Food and Beverage. The least preferred are Government and Finance. When working for brands, which industries do you prefer working for? FOOD AND BEVERAGE ENTERTAINMENT TECHNOLOGY MEDIA TRAVEL AND HOTEL RETAIL AUTOMOTIVE FITNESS GOVERNMENT TELECOMMUNICATION BEAUTY HOUSEHOLD FINANCE SUPERMARKET VERY PREFERABLE AVERAGE NOT PREFERABLE 9
10 FLEXIBLE WORKING AND HOURS TWO IN THREE FREELANCERS SPEND AT LEAST 10% OF THEIR YEAR IN DOWNTIME Having periods without regular work, or downtime, can be frustrating for freelancers. This is clearly a cause for concern, with two-thirds of freelancers stating that at least 10% of their time is spent not working when they would like to. About one in three (29.7%) said 10%-20% of their year is spent in downtime. Almost one in four (23.1%) said it accounted for 20%-30% of their year. And 12.7% said 30% or more of their year is spent in downtime. The figures strongly indicate a need for greater access to freelance work, with more choice and availability. THE AVERAGE FREELANCE WORKING WEEK: PAID HOURS Most freelancers who responded to the survey said they work paid hours in an average week in line with the ONS average weekly hours of work for full-time workers (37.5 hours). A small number work longer than average hours, with 19.1% working and 4% working 50+ hours. Meanwhile, 12.9% typically work fewer than 20 hours. Some said that there is no average week for them because their hours typically vary week by week. THERE IS A CLEAR NEED FOR FREELANCERS TO HAVE ACCESS TO MORE ASSIGNMENTS. WE HAVE SEEN A 30% RISE IN OUR FREELANCE JOBS OVER THE PAST YEAR AND A DEFINITE INCREASE IN DEMAND OVERALL FROM CLIENTS FOR GOOD FREELANCERS, WITH AN INCREASED BOOKING DURATION Joanne Lucy-Ruming, director, Major Players 10
11 CHALLENGES Maintaining a supply of work is the biggest concern for freelancers, with 58% of respondents describing it as a significant or very significant challenge. A lack of training and development is the factor least likely to give freelancers sleepless nights. Mistreatment of freelancers, particularly with regard to timely payment, came up as a major concern. What do you feel are the biggest challenges as a freelancer? MAINTAINING A REGULAR SUPPLY OF WORK MANAGING YOUR SCHEDULE AND DEADLINES FINANCIAL ACCOUNTING LACK OF TRAINING AND DEVELOPMENT REMOTE WORKING OR ABSENCE OF BEING PART OF AN ESTABLISHED TEAM HIGHLY IMPORTANT IMPORTANT NEUTRAL NOT IMPORTANT NOT IMPORTANT AT ALL OTHER CHALLENGES Chasing payments Cash flow Fewer high-level opportunities Different pay levels across sectors/industries for equivalent skill sets Misconception that freelancers are expensive due to day rate 11
12 SUPPORTING FREELANCERS Anything that would help freelancers maintain a regular stream of work would alleviate the key pain points of a typical freelance life. According to the survey, a freelance network and better access to consultants were the services that freelancers would most value from a recruitment agency, with online timesheets being the least valued. What services would you value most from a recruitment agency? TRAINING & DEVELOPMENT A FREELANCE NETWORK (ORGANISED EVENTS, INTERNET PORTAL ETC) BETTER ACCESS TO CONSULTANTS (DEDICATED CONSULTANT, WEBSITE CHAT ETC) VERY HELPFUL SOMEWHAT HELPFUL NEUTRAL NOT VERY HELPFUL ONLINE TIMESHEETS Build a network of regular freelancers Pay us what we re worth Give us honest feedback Give us staff passes Pay us on time, every time Understand we might make mistakes Allow more flexible and remote working 12
13 ONLINE PORTALS The survey revealed mixed perceptions of using online portals to find freelance work. Many freelancers find the current portals they use to be convenient, time-efficient and easy to access, whereas others find them impersonal and somewhat restrictive in terms of the lack of feedback and human interaction they get. DISLIKES A bit of a free-for-all Lack of feedback from client Lack of human interaction Too commodity-based Not a reliable source of work Poor-paying clients Totally portfolio-based, so there s no one to qualify the freelancer beyond this Unsolicited approaches The jobs are fake Lack of options for specialists LIKES Easy to access live jobs Time-efficient You re in control Clients can find you easily Convenient Simple payment and timesheet process Swift payment Ability to retain independence over work schedules, eg to fit in with childcare Automatic job alerts Transparency THERE IS A PLACE FOR ONLINE PORTALS FOR FREELANCERS, AS THEY CAN PROVIDE CONVENIENCE AND A PLACE TO MANAGE BOOKINGS. HOWEVER, IT IS STILL VITAL TO WORK WITH AGENCIES OR DIRECTLY WITH AN EMPLOYER TO ENSURE YOU ARE MATCHED ON YOUR PERSONALITY TO THE CULTURE. ALSO YOU CAN GET THE CRITICAL HUMAN INTERACTION TO GET FEEDBACK AND ADVICE THROUGH AN AGENCY, AS WELL AS WORKING A BIGGER RANGE OF ASSIGNMENTS Joanne Lucy-Ruming, director, Major Players 13
14 EMPLOYERS PERSPECTIVES Major Players spoke to a small sample of 56 employers to find out when and why they usually hire freelancers, and their future hiring plans when it comes to freelancers. Most of these employers hold senior positions in creative, creative services, account management, business development, marketing and content/editorial. Their job titles include creative director, account director, creative service manager and marketing manager. WHY DO EMPLOYERS HIRE FREELANCERS? Most of the employers that Major Players spoke to said they hire freelancers primarily to fill a resource gap, secondly to benefit from their specialist skills, and thirdly to deliver a quick turnaround on projects. 79% of employers said they hire freelancers to fill a resource gap 52% said they hire freelancers to benefit from their specialist skills 38% said they hire freelancers because they offer a quick turnaround time to deliver on projects 21% said they hire freelancers because it s more cost-effective than hiring permanent staff 7% said they hire freelancers because they produce a higher quality of work compared to permanent staff WHEN DO EMPLOYERS TEND TO HIRE FREELANCERS? While some employers reported that they tend to hire freelancers around Christmas or summer holidays, most (68%) said they hire according to their project needs rather than seasons. One in five said they hire freelancers all the time. FUTURE HIRING PLANS One in four employers said they plan to hire more freelancers in the next 12 months than they did in the past 12 months. This suggests a growing appetite among employers to hire more freelancers. About half were unsure, and more than one in five said they had no such plans. 14
15 FUTURE OUTLOOK More than two-thirds (69%) of the freelance respondents are currently actively looking for freelance work, which suggests a rich pool of specialist senior talent available to fill employers talent needs. The majority of freelancers report a steady level of confidence in the job market for their skills: 26.1% report more confidence, while 21.3% report less, and 5.2% don t know. THERE IS A HUGE DEMAND FOR CONTRACT WORK IN TECH AND DIGITAL. OVERALL, WE HAVE SEEN OUR FREELANCE POSITIONS INCREASE BY 30% SINCE LAST YEAR, WHICH IS PROMISING. USUALLY WHEN THERE IS ANY UNCERTAINTY IN THE MARKET OR A DOWNTURN, IT IS LESS RISKY FOR BUSINESSES TO HIRE A FREELANCER OVER A PERM, SO THERE IS USUALLY A DECREASE IN PERMANENT WORK AND AN INCREASE IN FREELANCE Jess Binks, freelance manager, Major Players Major Players is about to launch a new community and benefits to help freelancers forge a longer-term career with training, benefits, events and access to talk to other freelancers. Major Collective will be available for all freelancers who work through Major Players for at least three or more bookings. TO ENSURE OUR FREELANCERS FEEL SUPPORTED, REWARDED AND HAVE ACCESS TO ALL THE PERKS AND TRAINING THEY MISS OUT ON OVER THEIR PERMANENT COUNTERPARTS, MAJOR PLAYERS HAS LAUNCHED MAJOR COLLECTIVE. THIS SCHEME IS OPEN TO ANY FREELANCERS WHO HAVE WORKED THROUGH MAJOR PLAYERS AT LEAST THREE TIMES. WE WANT TO SHOW HOW MUCH OUR FREELANCERS MEAN TO US AND ENSURE THEY ARE VALUED AND LOOKED AFTER Allison Upton, marketing director, Major Players 15
16 FREELANCE MARKET INSIGHTS 2017 ABOUT THE SURVEY The survey was compiled by Major Players using data collected from 231 freelancers and 56 employers, analysed by CampaignJobs, and combined with insights gathered from senior consultants. (26 Sep-10 Oct 2017) To discuss your freelance vacancy or freelance opportunities, call: DIGITAL CREATIVE & TECH
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