Covid-19 is hitting freelancers and the self-employed especially hard. The current uncertainty affects everybody one way or another but the pandemic has disproportionately affected freelance work and as a result, their financial situation is now more volatile than ever. How do freelancers feel about COVID-19 and how has their work been affected?
Every country has taken different measures in terms of restrictions, lockdowns, and financial help available for freelancers. One thing the whole world has in common is social distancing and an economic decline in practically every industry.
- COVID-19 effects on the freelance market – One year later
- COVID-19 effects on the freelance market in the DACH region
- COVID-19 effects on the freelance market worldwide
Coronavirus study – One year later
In March 2021, freelancermap conducted a new worldwide survey in order to gain insights on how freelancers are feeling one year after the start of the pandemic and how their situation has changed.
Freelance project market and workload
73% of the participants surveyed were satisfied with the current freelance project market and this trend is confirmed across many different regions. As a consequence of the Corona crisis, a lot of companies are now cutting costs and exploring new contractual resources like freelancers.
“In 2020, the world saw an almost unprecedented change in the way its workforce functions. Despite the coronavirus, or perhaps in spite of it, the freelancer market is set to make waves this year.”
One year ago, most of the surveyed freelancers were quite pessimistic regarding their work situation, assessing the project market as “bad” or “very bad”.
71% of the participants stated that their projects weren’t really affected by Covid-19, and that they were able to continue working remotely. It seems the situation has recovered after a first incertitude in 2020, where the pandemic affected the workload of most freelancers due to the unprecedented nature of the pandemic and the fact that almost everyone was unprepared.
Ongoing projects as well as the acquisition of new ones benefited from the situation: 61% could land new projects during the pandemic, mostly through project platforms or personal networking. These were also the best sources for client acquisition in last year’s survey.
Freelancer rates and financial situation
The financial situation of freelancers is one of the hottest topics in the survey. 52% of the participants declared that they would charge the same rates as last year and 39% of the participants lowered them, fearing loss of workload. Although the actual situation seems quite optimistic, the consequences of one year of the pandemic are inevitable: 45% admitted to having a worse financial situation now than they did at the beginning of the pandemic and only 19% were able to improve it during the past few months.
Compared to other regions, freelancers in America lowered their rates the most. However, the majority of freelancers around the globe were able to maintain their rates, which is a good sign.
Freelancer or permanent employee?
It’s no secret that freelancers have a harder life when compared to permanent employees and these disadvantages might have been intensified lately:
- Difficulty in keeping a regular revenue stream
- Ensuring new projects
- Hostile legislation and tax regulations
- Expensive health insurance
Despite all the difficulties freelancers are used to experiencing, they would choose their freelancer career again (85%).
Financial security and project acquisition being two of the biggest challenges freelancers and the self-employed face during the pandemic. To answer the question, “What is the biggest lesson you’ve learned from the Corona crisis?”, 30% stated that they will save more money for future eventualities and 68% will focus on ensuring new projects, building relationships with their clients and networking more.
In March 2020, 27% of the surveyed participants expected the crisis to last one year- until March 2021. Twelve months later, the number of “pessimistic voices” has doubled: 55% think the “crisis” will last one more year, at least until March 2022.
Freelancers have learnt to cope and deal with different and sometimes difficult situations during this strange year. However one thing is clear: the new and unknown is not always bad! Crises can actually have a positive outcome for the freelancer business.
The need of cutting costs and the insecurity of the near future have led more and more companies to explore flexible possibilities regarding employment, which resulted in a higher demand for freelancers in many sectors.
Another positive aspect is that these seem to be worldwide trends and do not apply to just some regions.
Coronavirus study in the DACH region
freelancermap has been conducting several surveys in the DACH region from March, 18 to May, 6, and here are some insights as to how freelancers are feeling about the Coronavirus.
1. Negative effects due to the Coronavirus crisis
Back in the middle of March, when we ran the first poll between March 18 and March 20, 72% of all freelancers surveyed said to be experiencing negative effects of the Coronavirus mainly because projects had been canceled or postponed until further notice.
Only 14% said that the crisis had not affected them at that moment and the other 14% didn’t really know – It was too soon to answer the question.
The majority (62%) reported having lost work already due to clients canceling their projects. This lead to 56.4% of freelancers fearing a loss of livelihood because of the coronavirus pandemic.
2. Workload: Projects canceled?
At the beginning of April (March, 30 – April 5), we ran a second survey. Here, 63% of all surveyed freelancers reported experiencing a very bad or bad situation in terms of projects and workload.
37% defined the situation as being ‘really bad’ while 26% defined it as ‘bad’.
Many freelancers have experienced their projects being canceled or put on hold while several others lost a percentage of their overall client base.
Companies tightening their budgets is making it harder for freelancers to find new projects as well.
However, not everything is bad: 7% of freelancers declared being very happy with their current workload. This shows that there are also IT freelancers thriving regardless of the coronavirus crisis and that projects are getting completed.
The freelancers who claimed to be very happy with the current situation are working in the fields of “Consulting and Management” and “Engineering” and are currently hired on in the role of a “Consultant” and/or “Project Manager”.
3. Is remote work a thing now?
Previous results of our freelancer study 2019 showed that – in Germany especially – many projects were still completed on-site (55.14% in 2019).
While remote work has become a new norm for many – not only for freelancers but full-time employees – “only” 20% of freelancers indicated that they were able to keep working remotely despite the current situation at the beginning of May.
4. Best sources for client acquisition during Coronavirus
Freelancing platforms and the freelancers’ personal and professional network were voted as the best channels for client acquisition by 51% and 38% respectively.
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5. How long will the crisis last?
At the start of our survey in March, 43.8% of freelancers expected the crisis to stay for longer than 4 months. But there were a few optimistic freelancers as well – 22.2% said that the crisis will be gone in 1 to 2 months.
Fast-forward to May, there is still no unanimous vote on how long it will take to return to a “normal” state.
Right now, only 7% of freelancers see a possibility in this happening by June 2020 while 27% think it will take longer than a year and we’ll need to wait past March 2021.
6. Financial situation and Government support
Given the current situation, almost half of the freelancers who took our May survey declared that they will be facing financial problems in the following one to three months.
The majority of freelancers reported significant losses in revenue in May. 34% of freelancers have lost over 50% of their revenue. Only 15% of freelancers in the DACH region confirmed not having lost any revenue due to coronavirus.
20% of freelancers said having lost all their income (100%) so they are already using their earnings to survive or have applied for government support.
The survey showed that 32% of freelancers working in the IT niche confirmed they have applied for national help.
Read more: Measures available for freelancers in Germany (in German).
We asked our freelancers outside of Germany, too. 15% confirmed to have applied for help available in their country of residence while 85% haven’t applied for financial support (at least yet).
Have you applied for any government support to get through COVID-19?
7. Do freelancers fear a loss of livelihood?
The data from the latest survey conducted from April 30 to May 6 sheds an optimistic light than the initial results from March.
After approximately one and a half months of watching the crisis become a larger part of reality in Europe, it looks like freelancers are quickly adapting to the new situation. Their fears of not being able to continue to run their business have sunk. This change could also be a result of the financial support offered by the Government.
There are still around 20% of the surveyed freelancers who aren’t yet sure how to answer this question.
Also, the number of freelancers defining the current project workload situation as very bad is 6% lower than in April (37% compared to 31%) but still, 35% of all surveyed freelancers said that the situation is bad.
Coronavirus study in Germany, Austria, and Switzerland (DACH) – Graphs and results in May 2020
What’s happening outside the DACH region?
As COVID-19 continues to create economic and financial uncertainties, a majority of the workforce will continue to deal with its immediate impacts.
As a freelancer, you are already better suited to the upcoming months of remote work due to the very real possibility that businesses will be more likely to adopt remote working for the foreseeable future. For example, Twitter announced in May their employees can work remotely forever.
Update: Coronavirus feelings September 2020
With the disruption caused by the Coronavirus still ongoing through the year 2020, we thought it would be insightful to learn more about how the pandemic continues to affect freelancers and their workload.
In order to do this, we conducted another survey during the month of September to better gauge the experiences of our freelance community. This is what we learned:
As a whole, 35% of all freelancers assessed the current freelance market situation as being “very good” – a slightly more optimistic departure from the previous survey results.
While 28% of freelancers had to put some of their projects on hold, 63% of freelancers indicated feeling optimistic about the future of freelancing.
Additionally, 68% of all surveyed freelancers were able to land new clients during this tumultuous time, and while some freelancers felt project negotiations were a bit strained, 42% acquired new projects in the last month.
Update December 2020: A retrospection
Unfortunately, the pandemic still affects freelancers and their workload. After almost a year from the outbreak of Covid19, we decided to conduct one last survey this year in order to analyze and retrospect on the past year and how the pandemic has affected freelancer businesses.
Freelancers have a slightly more optimistic view of the present freelancer market situation: 41% of them continue to perceive it as being “very good” (6% more than in September).
In order to make the best out of a difficult situation, freelancers are trying to find alternatives to simply placing projects on hold. 32% of all surveyed freelancers have decided to continue projects with remote work, while 36% are offering more digital services and 18% have switched to more in-demand ones.
Compared to the previous survey, most freelancers surveyed acquired projects from new clients during the last months. Regrettably, 44% could not land new job opportunities.
Although 4% more freelancers had to lower their rates in order to not lose out on new assignments, around 70% expect the same or a higher turnover than in 2019.
All in all, most of the surveyed (74%) are expecting the demand for freelancers after COVID-19 to be higher than before and 65% would consider switching to a full-time job if remote working becomes the new norm.
Could this be an indication of things turning around for the better? We’d love to know what you think!
Happy freelancing and stay safe!