Self-employed: crisis today, Eldorado tomorrow? Focus on freelance administration
Confinement, teleworking, short-time working... 2020 will have been a pivotal year for the self-employed. And while taking the plunge may seem risky in the current climate, the self-employed status has attracted more people than ever.
More than 848,000 new businesses were registered during the year. So is self-employment the way of the future? If so, under what conditions? Has one legal form (SASU, micro-entrepreneur, etc.) stood out? We've broken down the subject for you.
Covid: how are the self-employed faring?
A sector in turmoil
The term "self-employed" is a catch-all phrase that needs to be clarified once again. It refers to any person wishing to be self-employed, without any link of subordination to a single company. At the end of 2019, there would be more than 3.6 million self-employed people in France (ACOSS). That's around 33% more than in 2008 (INSEE). Encouraging figures, but what is really behind this desire for freedom? What are the conditions for the self-employed? We wanted to take a closer look at the subject.
First of all, it should be noted that self-employment can take several forms: SASU, SAS, micro-entrepreneur, etc. In most cases, unfortunately, the guarantees and security are still very limited. In times of crisis, these limitations tend to be exacerbated. Let's take a look at the impact of COVID on the self-employed.
Uneven repercussions
The repercussions are quite varied.
Lower sales
According to a survey carried out at the end of the year by Crème de la Crème (a reference site for freelancers), 50% of the freelancers present on the Internet had a low turnover.% of freelancers on the platform reported a negative impact of the crisis on their turnover in Q4 2020.
Only 42% said they had been spared. This is a trend that can be observed for most freelance statuses. To protect themselves, many companies have put certain projects, and therefore certain services, on hold.
The self-employed were in the front line: fewer assignments, more complex negotiations, almost impossible prospecting, risks of non-payment... In short, a complex situation.
Inequalities between sectors
As ever, some sectors are doing well. According to a study by Malt in partnership with the BCG institute, over 85% of people offering project management services (project managers, agile coaches , etc.) have had at least one assignment cancelled. The figure is 79% for business & consulting and 74% for communication & marketing .
Tech (developers, data scientists, etc.) was one of the sectors that was spared the most. Consulting, administration and design were harder hit.
Some statuses less affected than others
Most self-employed people have been hard hit by this global crisis. On the other hand, some statutes seem to have been spared more than others.
One in particular seems to have fared particularly well: freelance administration. This format combines two key elements: flexibility (aka the freedom of independence) and security (aka the advantages of salaried employment).
What is freelance administration?
A status halfway between independence and salaried employment
As we've seen, being self-employed means choosing from a jungle of statuses (EURL, freelance, SASU, etc.). In short, the jargon isn't always intuitive and the subtleties aren't always easy to spot. In this flurry of options, one is often underestimated: freelance administration.
Halfway between self-employment and salaried employment, freelance administration is a hybrid format that combines the advantages of both statuses. Put simply:
- Flexibility: You are in control of your business and define all the terms and conditions of your assignments (clients, rates, services, etc.). The freelance administration company then takes care of formalising them (contracts, invoicing, etc.), invoicing the service and converting it into a salary. All you have to do is concentrate on what's important: your assignment.
- Security: You are attached to the freelance administration company by an employment contract (fixed-term or open-ended), with no subordinate relationship. As such, the company will provide you with administrative, legal and financial support, and will also allow you to enjoy the benefits of salaried employment (health insurance, provident fund, unemployment benefit, pension, etc.).
In more graphic terms, it's the embodiment of French-style flexicurity. Flexibility in work, security to work in good conditions. And this status is suited to a wide variety of profiles. In a few words, freelance administration means :
- more than 750 professions (excluding personal services and regulated professions),
- 3 main sectors (IT, training, project management),
- intellectual services (consulting, auditing, engineering, IT, training, etc.),
- commercial services (sales, property transactions, management, intermediation, etc.).
A little-known form of freelancing
This form of freelance administration has already attracted more than 50,000 people in 2020 (compared with 32,800 in 2018). It is therefore growing fast, and its medium-term potential is considerable. Some estimate that it could account for as many as 600,000 jobs by 2025 (source PEPS).
However, it is still often overshadowed by micro-entrepreneur status. More widely known and more often mentioned in the media, freelance administration is gaining in popularity, as demonstrated by this study carried out by the Syndicat des Professionnels de l'Emploi en Portage Salarial (PEPS for short).
In 2018, only 53% of executives surveyed had heard of freelance administration. Of these, 75% have a good image of it and 37% believe that it will become more common in the future. So it's a safe bet that this status has a bright future ahead of it. And with good reason, freelance administration offers a number of significant advantages. It's time to decipher them.
What are the advantages in times of crisis?
A status that's easy to set up
Freelance administration is one of the easiest and quickest legal forms to set up. There' s no need to set up a new structure. All you need to do is contract a third party (the freelance administration company), which will take care of everything (or almost everything ). You manage your assignments (services, costs, customers, etc.) and the freelance administration company takes care of the rest (invoicing, collection, recovery, social security declarations, etc.).
Is this service free? Not exactly. The company takes a percentage of your assignments. This can range from 4% to 10%. That may seem like a lot, but at this stage you need to consider the time you spend as a self-employed person on administrative and management tasks. The figures range from simple to triple, but we're generally talking about more than a third of the time. Which is an enormous amount.
Everyone is free to make their own calculations, but freelance administration can be an excellent compromise for optimising your time and gaining peace of mind. And for people with a phobia of red tape, it can even be decisive.
Unique social protection
Over and above the administrative side of things, most freelance administration companies offer you social security cover similar to that of an employee. This may seem trivial, but in times of crisis it makes all the difference. Here are a few basics:
- Income: A fixed, guaranteed salary, the possibility of smoothing the amount (and compensating for fluctuating activity), unemployment insurance, pension contributions, etc.
- Health: Mutual insurance, maternity benefit, work accident cover, etc.
- Leisure: luncheon vouchers, works council, etc.
- Training: Access to a wide range of training courses (with or without certification).
- Real estate: pay slips (useful for taking out a loan, for example).
In short, freelance administration is a fairly comfortable form of status. Still not sure? Here's a bonus: this status can be reconciled with other statuses. No commitment, no risk. You can create an à la carte format that matches your expectations.
A status that is gaining in importance
The sector is gradually expanding. In France, and in every other country in Europe, similar forms are emerging. Things are becoming more structured. The players in the sector now have the legitimacy to build the future directly alongside the State and institutions.
Today, freelance administration represents :
- more than 300 companies in France ;
- a first mention in French law in 2008 (law no. 2008-596 of the Labour Code concerning the modernisation of the employment market), which officially defined the legal conditions for freelance administration;
- a collective agreement dedicated to freelance administration;
- a major victory in 2020: freelance workers were able to benefit from the short-time working scheme, in the same way as employees. This is a first.
These measures and changes point to a bright future for freelance administration. So what role will freelance administration play in tomorrow's society?
What about tomorrow?
The permanent contract remains the dominant form of employment in France today. It accounted for over 85% of jobs in 2016.
And yet. According to an IFOP survey, 14.3 million working French people would be prepared to become self-employed if favourable policy measures were put in place. That's no less than half the working population!
Given the context, and the extent to which this movement is gaining momentum, there is every reason to believe that labour law will gradually be adjusted to accommodate this new form of work. In the meantime, one form of employment seems to offer a good compromise between salaried employment and independence: freelance administration.
The advantage? There's no need to wait to take the plunge, as it's now possible to become a "porter" with just a few clicks of the mouse.
Article translated from French