Freelancer: Definition, process, and examples

Freelancer definition
Difference between freelance and self-employed
Employ freelancers: Advantages and disadvantages
When should companies hire a freelancer?

Freelancer definition

The term freelancer originated in the 18th century and referred to a “free lancer” who fought for the best-paying commander in wars or individual battles (i.e. a classic mercenary).

Today, a freelancer is by definition a worker who performs their profession on their own account (not permanently employed, not subject to social insurance) and on their own terms, but usually on behalf of a company. They perform freelance work on the basis of a contract for their services.

Similar to a temporary worker, they can work for their client on certain projects or for a certain period of time. However, they do not receive a fixed salary as remuneration, but a fee that is calculated on a flat-rate basis (e.g. for projects) or on an hourly basis.

Freelance work can also involve the performance of activities from several similar job profiles and take place in a wide variety of industries.

Typical industries for freelancers include:

IT & Software (e.g. Programmers)
Financial services & insurance (e.g. Insurance Broker)
Distribution & Sales (e.g. Sales Representative)
Media & Advertising (e.g. Marketing Manager)
Events (e.g. Event Manager)
Consulting

Difference between freelance and self-employed

The term freelancer is often used interchangeably with being self-employed. Although they are very similar terms, they are not exactly the same.

The main difference between working freelance and being self-employed is that self-employment is a more holistic term. Whereas all freelancers are self-employed, not all self-employed people will call themselves freelancers.

Let’s explain with an example. If you own your own start-up business you are self-employed (literally, you have employed yourself). You may run a one-person business, but you might also have several employees or freelancers working for you. Your company may provide services to clients or sell goods to customers.

A freelancer is also self-employed in the sense that they run their own business. But a freelancer always works for or with clients. They choose which clients to work for and can work for several clients at the same time. Freelancers run their own business, but their business consists only of themselves.

Employ freelancers: Advantages and disadvantages

Below we take a brief look at the advantages and disadvantages to employing a freelancer.

Advantages

Recruiting takes a lot less effort
Employing a freelancer saves valuable resources (time and money). Of course, it is possible to post a job ad for freelancers, but it is more common for companies to directly contact potential candidates and request their services.

Flexible use
Do you need freelancers only for specific projects or tasks? No problem, because the freelancer’s organization of their working time is up to them. They only work for companies when they are really needed.

Lower personnel costs
Freelance workers are not subject to social security contributions in the company and have no vacation entitlement. This means that companies do not have to pay social security surcharges for them and do not have to pay when they are absent, which means they can save on personnel costs—at least in theory.

In practice, however, freelancer salaries are always set significantly higher than those of permanent employees for precisely this reason. However, if you only use the freelancer to provide support for individual projects while you look for a new full-time team member, this can rationalize both the cost of the unfilled position and the personnel costs.

No protection against dismissal
If the quality of the freelance work proves unsatisfactory or the freelancer does not work well with the team, the collaboration can be terminated at very short notice. That’s because freelancers—unlike salaried or temporary employees—do not enjoy protection against dismissal.

The notice period depends either on the agreed remuneration or individual contractual agreements. In many cases, however, there will be no notice period at all.

Disadvantages

Less bound by instructions
Since freelancers are less bound by instructions, companies often cannot exactly tell them when and how to do their work. Therefore, care should be taken when hiring a freelancer to ensure that their work style fits the company.

Often less dedicated to the team
The daily work of permanent team members usually follows a certain company culture (e.g. based on team spirit, motivation, commitment, and mutual appreciation). Many freelancers, on the other hand, are simply not team players and not committed to the company in the same degree. This can sometimes make working together more difficult.

Quality not always guaranteed
There are many freelancers, but not everyone delivers convincing work results. That’s why it is worthwhile to view some work samples in advance. Many freelancers offer a portfolio for this purpose, presenting previous projects and their work results.

Uncertain availability
Quality freelancers are in high demand, so it can happen that they run out of capacity for (more extensive) projects. Therefore, companies should ideally always have several contacts that they can contact as freelancers.

When should companies hire a freelancer?

Freelancers are a good solution when companies only want to call on the expertise of a professional for a short period of time or for a specific project.

Employing a freelancer makes sense especially when the hours they take on would not be enough for a full-fledged part-time or full-time position, and thus using a temporary employee would not make sense either.

By freelancing, a company can then still secure the expertise it needs without having to hire the team member in-house.

Hire freelancers now

Want to post a job ad for freelancers? With JOIN’s multiposting feature, you can post on multiple job boards and social networks at once with just one click.

For those who would prefer to hire permanently after all: Some positions, mainly in IT, are unfortunately quite difficult to fill. These blog articles contain some helpful tips and tricks on how to attract the best talent: