What is the current IT freelance situation in Germany? freelancermap asked over 1,800 IT freelancers in Germany, Austria, and Switzerland about their rates, income, client relationship, and more. We’ve compiled the most interesting insights!
- Insights Freelancer study 2020
- Insights Freelancer study 2018
- Conclusion: Is freelancing in Germany a good option?
Freelancer study 2020 – Statistics and Trends
2020 started as a great year for many freelancers. Some people had just started their business in January, others were expecting a better workload this year.
However, in March 2020, with the Coronavirus outbreak, everything changed.
Let’s take a look at the current freelance market:
Hourly rates among IT freelancers remain steady
We started collecting data in February 2020 and back then, the market looked promising. Right up to mid-march, only 1% of freelancers said they would be lowering their hourly rates.
However, since the WHO declared the Coronavirus as a pandemic on 13.03.202, the percentage of freelancers expecting to lower their prices rose to 5%.
From mid-March onwards, the hourly rates went down to €93.82 but then stabilized at the previous year’s level resulting in an average freelancer hourly rate of € 94.28 in the DACH region.
Compared to 2019, the rates increased only by €0.39. This is the first year – considering the 5 previous studies – that we can’t see a significant rise in the hourly rates – again, due to Corona. Luckily, a major slump in hourly rates due to the crisis did not occur.
Freelance hourly rates in Germany, Austria, Switzerland (D/A/CH):
|Freelance hourly rate 2016||€82.13|
|Freelance hourly rate 2017||€87.36|
|Freelance hourly rate 2018||€91.05|
|Freelance hourly rate 2019||€93.89|
|Freelance hourly rate 2020||€94.28|
“58% of freelancers calculate their rates new for every new project”.
SAP & IT Consulting still the better-paid industries
Freelancers continue to earn the most in the SAP sector with an average hourly rate of €111, closely followed by the management and IT consulting industry with €110.
Freelancers offering their services in the IT infrastructure industry charge on average €94, followed by developers with an average of €83 hourly rate. Graphic designers or content and media producers come next with €69/hour. Income satisfaction is also distributed accordingly.
Average freelance rates in different industries 2020:
|SAP – SAP FICO, ABAP, MM consultant, …||€111|
|Management & IT consultanting – PMP, Scrum Master, …||€110|
|IT infrastructure – DBA, DevOps, Network Admin, …||€94|
|Engineering – Electrical, CAD, mechanical, …||€83|
|Development – web, mobile, software developer, …||€83|
|Desing, content, media – Graphic design, video, illustation, …||€69|
“71% of freelancers are happy with their income”.
Women are still lagging behind
In 2020, the difference in income between men and women is still significant. Men currently charge on average €95.38/hour and have a net monthly income of €6,118 euros; whereas women charge €86.11/hour and have a net monthly income of €4271. Additionally, the portion of women working in the IT field is only 12% according to the study.
Freelance hourly rates men vs women 2020:
|Men average hourly rate||€95.38|
|Women avergage hourly rate||€86.11|
A 7-day working week and regular vacation
People often think freelancers don’t work long hours. They believe that since freelancers are their own boss, they can do whatever they want while working at a minimal pace.
The reality is that freelancers work on average 44 hours per week as of 2020. The majority stated they work between 31 and 50 hours per week and it doesn’t really matter if it’s Saturday, Sunday, or a national bank holiday.
40% of freelancers confirmed that they work on Saturdays and 21% also work on Sundays. The majority of freelancers work Monday to Thursday (98%-99%) and we noticed that the 4-day working week is being applied by freelancers too, with 7% of freelancers taking Friday off as well.
“Freelancers take 27 days off every year on average”.
Project acquisition and the impact of the coronavirus
Project acquisition is still the main challenge for 6 out of 10 freelancers. And the pandemic has not made this any easier. 71% of freelancers were unable to land new projects within the last 3 months.
59% of freelancers said that projects were canceled due to the Coronavirus and only 10% said that they didn’t feel any changes in regards to their projects.
Before the Corona breakdown, 33% of freelancers expected to have more projects this year, and only 17% expected fewer projects. From mid-march, the data made a clear switch with 51% of freelancers expecting to have fewer projects (+34%) and only 18% expecting a better situation than last year (-15%).
66% of freelancers classify the current situation as bad or very bad.
A desire for change from Government
More than half of the surveyed freelancers (56%) asked for the elimination of the pseudo-freelancer, known in German as “Scheinselbstständigkeit”. This happens when the working relationship between a freelancer and a company looks more like full-time employment than a freelance relationship.
The study shows that about 72% of the freelancers work on-site at the client’s offices and spend an average of almost 11 months on the same project.
For many companies, it’s easier to work, collaborate, and communicate with the freelancer when they are around. But many freelancers are concerned this may make them seen as someone who is pseudo-self-employed (Scheinselbstständigkeit). Some signs to be considered a “scheinselbeständig” are having a single client over a long period of time, working at the client’s offices, and having fixed working hours, among others.
Furthermore, 56% of freelancers wish for simplification in bureaucracy for the self-employed.
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Freelancer study 2018 – Statistics and Trends
Freelance rates are still on the rise
This is probably one of the questions that interests us more: How much are freelancers charging?
We want answers. On one side, freelancers want it for pure gossips’ sake. On the other, it helps freelancers understand if they are charging their clients correctly, so they don’t overcharge or undersell themselves.
The IT market study shows that freelance rates continue growing. The hourly rate amongst IT freelancers increased 4,23% up to an average hourly rate of € 91,05/hr.
Freelance hourly rates in Germany:
|Freelance hourly rate 2018:||€ 91,93|
|Freelance hourly rate 2017:||€ 84,28|
Better-paid fields to work in: SAP, Consulting & IT infrastructure
The report showed that freelancers working in SAP are currently earning the most with an average hourly rate of €110,19.
Freelancers working as consultants take second place with an average hourly rate of €104,94.
Still on the podium and occupying 3rd place are freelancers working in the IT infrastructure field: IT architects, DBA, data security experts, etc. Their average hourly rate is €88,24.
Generally, freelancers are satisfied with their income (71,61%), especially SAP freelancers (83,13%).
Women – a minority getting worse pay
According to the study, the proportion of women among IT freelancers in Germany remains low at just 11,54%.
In terms of earnings, the gender pay gap is also noticeable. Women are getting almost 7 euro less than men per hour.
The gap increased in comparison with 2017, when the difference was “just” 3 euros.
Freelance hourly rates men vs. women 2018:
|Men hourly rate 2018||€ 91,93|
|Women hourly rate 2018||€ 84,28|
Regardless of the difference, 62,70% of women said they were satisfied with their income as freelancers.
Project acquisition is the biggest challenge
62,64% of all surveyed freelancers agreed that finding new clients is the most challenging part of being a freelancer. This has been the biggest struggle in previous studies as well and continues to be on top.
The freelance market is growing yearly and that means also the competition is more fierce, so finding new clients might still be the biggest challenge in the following years.
Freelancers also mentioned that having a fluctuating income was the biggest disadvantage of being a freelancer (47,62%).
IT freelance projects run generally up to 12 months
56,59% of all surveyed freelancers said they are generally in a project up to a year.
The market study also showed that within the IT field the most common contracts run between 7 months and a year (24,45%). Generally, these are complex projects that can really benefit from having the IT expert in the team longer than a few weeks.
The future for IT freelancers: optimistic
For many freelancers, the income is not the main reason for being self-employed, rather the flexibility that freelancing offers them. However, money matters, and 64% of all surveyed freelancers considered that they are getting better paid than permanent employees.
Almost 80% (76,92%) of all surveyed freelancers want to continue working as a freelancer and almost the half of them (48,81%) said that they are planning to increase their hourly rate within the next year.
Freelancing in Germany: A good option?
As you can see, the German market looks promising for IT freelancers. If are looking to work as a freelance in Germany and are looking for IT jobs, freelancermap is your best ally. We have job opportunities in the fields of engineering, development, SAP, consulting and design.
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