Empowering the Freelance Economy

Competition among Spain’s freelancers heats up

Freelancers and digital nomads working in Spain could see competition heat among talent there, according to a report by Malt.
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The European freelance market is experiencing a mixed bag of emotions, with Spain showing a significant drop in freelancer confidence due to increased fees and fierce competition among freelance talent, according to a new report by freelancing platform Malt.

Confidence Gap in Europe

While Germany and France boast a surge in freelancer confidence (86% and 75% respectively), Spain stands out with a concerning decline (down to 57% from 69% in 2022). This disparity might be linked to the recent increase in annual self-employment fees in Spain, forcing freelancers to raise rates to maintain their income.

Social security payments for the self-employed in Spain going forward

Individuals earning €1,300 or more per month will experience a reduction in their social security fees, ranging from €3 to €10 per month. Conversely, those earning over €1,700 monthly will witness an increase between 2.5% and 6%, SGM Abogados reported.

For example, a freelancer with a monthly income of €2,030 can expect a €10 monthly increase in their social security payments in 2024.

VAT reporting changes

Self-employed associations are working with the Treasury to implement a new European rule. This rule exempts self-employed people who make less than €85,000 a year from filing VAT reports every quarter. This is to align with European Directive 2020/285.

Spanish resilience: raising rates despite challenges

Spanish freelancers, however, displayed remarkable resilience by successfully raising rates at a much higher rate (75% for full-time freelancers) compared to their European counterparts (56% in Germany and 39% in France), Malt reported. This suggests that Spanish freelancers were either previously undervaluing their services or actively seeking to offset the new fees.

That said, in a recent report in The Freelance Informer, Spanish freelancers that work through Upwork, for example, ranked worst for earnings per job out of the top 20 earning countries. It seems they could still be undervaluing their worth and may start to look for clients outside Spain.

Art and Design: a vulnerable sector

The data also reveals a worrying trend within specific job categories. Freelancers in Art and Design reported the lowest confidence levels across all countries (61%). This might be because businesses often cut marketing budgets, which directly affect Art and Design projects, during economic downturns.

Freelancing by choice

Despite the challenges, the report highlights a positive trend: freelancing is increasingly seen as a career choice, not just a stop-gap measure. This is evident in the high percentage of freelancers (64% in Spain) who report choosing freelancing for personal reasons.

Shifting tides: large corporations embrace freelancers

 In Spain 90% of private companies are family businesses, who create almost 70% of private employment and contribute about 60% of GDP. Thus, family businesses are regarded as the roots and backbone of the Spanish economy, guaranteeing stability, development and the welfare state.

Despite this or in fact because of it, the Malt report also points to a significant shift in how companies source talent. Freelancers are now spending more time working with large corporations (up from 5% to 16% in Spain). This suggests that larger companies are recognising the value of freelance expertise and are actively seeking ways to integrate them into their innovation strategies.

Spanish anomaly: competition as a key motivator

While upskilling is a top motivator for freelancers across Europe, Spain presents a unique case. The Malt researchers found “increasing competition with other freelancers” emerged as the second-highest reason for pursuing additional skills.. This intense competition underscores the need for Spanish freelancers to continuously enhance their skillsets to stay ahead of the curve.

The Spanish freelance market, while facing challenges, exhibits both vulnerabilities and remarkable adaptability. The future of freelancing in Spain seems to hinge on navigating rising costs, intense competition, and the evolving needs of a market increasingly embracing freelance talent.

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