Findings from Free Trade Europa’s Future Of Work 2024 study

This month, Free Trade Europa published its Future of Work Study 2024. It highlights the growth of the independent self-employed economy from three perspectives: individuals, companies and government policy.

Europe has seen a steady increase in the number of freelancers since 2007, when Xenios Thrasyvoulou founded PeoplePerHour. The European Commission states that by 2025, there will be 43 million freelancers in the EU, and Malt Freelancing in Europe 2024 Research shows that 61% of freelancers are currently not interested in moving to full-time work.

In addition to individuals, there is a robust European freelance industry. Forbes readers are familiar with Malt. Malt is a freelance platform that was founded in 2013 by founders Vincent Huguet and Hugo Lassiege. They changed their name in 2017, raised $97 million at a valuation of $489 million in 2021, acquired enterprise-focused consulting platform Comatch in 2022, and have 700,000 freelancers and 70,000 clients in 9 countries.

In addition to Malt and PeoplePerHour, there are over 500 niche European platforms that specialize in regions, skill sets, or industries. In Germany, Code Control, Uplink, and Freelancermap are the leading IT, development, and design platforms, while Expert Powerhouse is the leading consulting platform. In France, Zoulloo is the leading data scientist platform, Brigad is the leading hospitality platform, and LeHibou is the leading IT platform. In the UK, Talmix is ​​the leading enterprise consulting platform, while NatQuest is the leading supply chain expert platform. In the Netherlands, Tasker is the leading hardware engineering platform, while Sweav is the leading M&A consulting platform. In Denmark, Jelber and Free Agents are the leading marketing platforms. In Poland, Redegate is the leading consulting platform. Additionally, in Ireland, India List is the leading marketing platform.

European governments are also showing interest and taking action. The UK has IR35. The European Parliament passed a directive on platform work in 2024. And without clear directives on self-employment, freelancers tend to fall under the existing small business classification in a European country.

So what lies ahead for Europe? Let’s take a look at the most significant and interesting findings from the Future of Work Study 2024.

Growing talent shortage across Europe

The study highlighted talent shortages as a major factor driving freelance adoption. This is consistent across the board in all developed countries. According to Paul Falcone, bestselling author and former CHRO at Nickelodeon, “We’re all going to be facing talent shortages for the rest of the century, not just the United States, but all industrialized countries.”

According to the Future of Work Study 2024, despite the EU’s target of employing 20 million ICT specialists by 2030, the latest European research shows that only 12 million skilled professionals may be available by the end of the decade.

More and more freelancers decide to freelance in Europe

In line with global coherence, more and more people in Europe are choosing self-employment over traditional employment. The study underscored the European Commission’s conservative estimate that 43 million people in the EU expect to become freelancers by 2026.

The United States provides a foretaste, as experts predict that by 2027, more than half of the American workforce will be self-employed freelancers. But there’s an important caveat when referring to the United States: The United States has far less favorable employment protections, which create greater incentives and an easier acceptance of freelancing as a stable, secure, and promising career path.

A good indicator of the accuracy of this is the confidence of freelancers. The Malt Freelancing In Europe 2024 report found that over two thirds of freelancers described themselves as confident, with German freelancers being the most confident.

Another indicator is the actual activities of freelancers, 90% of whom state that they are “not actively seeking an in-house position.”

There is a need for “enterprise-grade” solutions that understand the legal and regulatory environment

Freelance is not “normal” everywhere. I often refer to Geoffrey Moore’s Crossing The Chasm visualization and estimate that we veer between innovators and early adopters, depending on the industry and region.

I deliberately use the word “normal” rather than “new” because there are over 73 European freelance solutions and over 500 platforms according to the European Parliament on the Human Cloud Industry Landscape. However, freelance is not widely accepted as a talent strategy, freelance talent platforms are not a priority channel or provider, and there are no standardized roles such as lead freelancer or freelance program manager.

The study emphasizes that the path to standardization requires understanding the broader legislative and regulatory environment. It says that “there is a need for enterprise-ready solutions.” Specifically, these enterprise-ready solutions must address issues of taxation, government policy and regulation, intellectual property, and privacy.

The ingredients for standardization in Europe are here. As a Forbes reader, you know about Deel, Remote and Magnit.

But have you heard of YunoJuno and TalentDesk in the UK? Or Mellow, a contract management solution that provides compensation, specialises in hard-to-reach regions and uses a transparent 2%, pay-as-you-go model? Similarly, platforms like Malt have a Malt strategy, and companies like L’Oreal and Unilever are a few of their corporate clients.

Now, European freelance leaders need to better educate and communicate the benefits of self-employment models, combining them with corporate-level risk protection.

Becoming self-employed may require implementing a talent management approach

In keeping with the theme of standardization, the definition and category of freelancer may need to be embedded within existing talent strategies, rather than being a separate, distinct and isolated category.

The study cites the term “holistic talent management” and says that “a holistic approach to talent management is key.” It continues to emphasize “the need to create a comprehensive, holistic approach to talent management and to focus more on the value an employee can provide to an organization, rather than focusing on their employment status.”

According to Tony Buffum, former CHRO and independent enterprise expert, “Organizations that take a ‘Total Talent’ approach and design for outcomes rather than roles and headcount are able to acquire skills across all employee levels. This enables rapid talent acquisition while maintaining quality and agility to respond and adapt to dynamic market conditions.”

Talent clouds may be the right model to normalize freelancer adoption

Technology alone is rarely enough. Change usually requires applications and formats that enable companies to use technology in ways that meet their current needs, in ways they are already comfortable with, rather than redesigning their current systems.

The study proposed talent clouds as a format in which companies can access freelance talent. Rather than requiring companies to manage the full experience of a hiring manager or start a new search every time, talent pools offer “a vast pool of vetted and skilled freelance, contract, and gig workers.” This terminology is not new. Direct sourcing is already common across nine different solutions in Human Cloud’s industry landscape.

There may be a clear path to legislation

As mentioned in the introduction, governments around the world are grappling with how to classify, legislate, and regulate the freelance economy. While the concept of individuals choosing to work as freelancers over traditional positions and companies choosing to hire freelancers may seem straightforward, factors such as taxes, healthcare, and benefits make this economy very complicated.

Most governments lack support for freelancers. In Human Cloud’s latest Freelance Trend Tracker report, 62% of leaders don’t see their government as supportive, and only 5% say their government is “very supportive.”

The study makes three recommendations to lawmakers.

First, avoid the mass presumption of employment. Work is changing, and individuals are choosing between different work arrangements rather than defaulting to full-time work.

Second, don’t create an employment relationship for a sole proprietorship. If an individual decides to set up a company, even if it’s strictly a one-person operation, the study notes that “moving from a stand-alone business model to a more rigid employment structure would severely reduce the flexibility and freedom that are the basis for many people choosing the freelance and platform work style.”

Third, make employment classification voluntary. Instead of making assumptions, create clear paths for freelancers to self-identify as freelancers and let them retain the ability to choose when, where, and how they earn money.

There is no turning back

A quick scan of the headlines in this article will show you that freelancing in Europe is here to stay. While it’s not “normal” yet, individuals, companies, and even governments are demonstrating the fact that freelancing is on the way to becoming a professional and embedded talent strategy, and talent platforms are a key part of a company’s total talent management.

This next piece of data is a great addition to reinforce the fact that freelancing is (and should be) becoming the normalized way of working. We’ve all heard about the recent backlash against remote work and back-to-the-office mandates. According to the study, “the data shows that back-to-the-office mandates can increase office attendance by up to 14%, but lower employee engagement scores by 26%.”

So what can we expect from the European freelance market in the coming years?

The final word goes to Glen Hodgson, CEO of Free Trade Europa, the organisation that led the study.

“While the world of work has been revolutionized by technology, many of the rules, processes and attitudes surrounding ‘work’ have stubbornly remained unchanged for decades. Our new study therefore highlights the need for companies and individuals to be in sync with technology, for talent clouds and agile teams to be the ‘now’ of work, while leadership in the corporate environment must evolve accordingly.”