Current challenges faced by freelancers
One of the largest groups to be affected by Covid19 is the freelance workforce. This vast group consists a huge array of talent and skills including event managers; producers; creatives; voice over artists; designers; carpenters, set builders and AV technicians to name just a few. It is a group that is largely unprotected and although often widely connected, this is rarely with the corporates who may still be looking to connect with their workforce or customer base and hence who are still awarding contracts. Where agencies have the potential to pivot their services, many freelancers are starting from scratch – having signed previous NDA’s preventing them from contacting end clients and being unlikely to be hired on events in agency land which itself is likely to be reducing their own workforce once the furlough scheme comes to an end and whilst confidence in events is still at a low.
The impending introduction of IR35
And, if the current situation isn’t depressing enough, the Chancellor of the Exchequer hinted at changes that are coming down the line, which are likely to affect how freelancers are paid. The introduction of IR35 in the private sector has been on the cards for some time and the government was due to bring this in for just medium and large organisations, this may well now be extended and cover all organisations as a result of the recent bailout on wages and self-employed income.
On the surface, it could be argued that this will simplify tax returns for freelancers, and it is likely that official contracts will also become the norm. This doesn’t mean any more protection will be available however, especially if the contracts used are based on casual or zero hours. If anything, this will reduce the likelihood of events organisations accepting individual freelance contracts – something I would be recommending are drafted to cover future engagements to protect freelancers for event cancellations in the future.
The real problem is likely to come from the additional cost and administrative burden on already stretched event agencies. For when IR35 is introduced, it will mean that employers will have to pick up the additional cost for income tax, NIC and pro-rated holiday pay and pension contributions for the freelancer. The administrative cost to manage this at each engagement also has to be factored in and the question arises – who will cover the additional cost? Will this impact on freelance fees? Will this impact on an agency’s desire to use freelancers and will their operating models change?
There are 3 principle tests that HMRC apply when considering whether an individual falls inside or outside IR35.
- What degree of control does the individual (freelancer) have over what, how, when and where they complete their work?
- Can the freelancer substitute someone else to undertake their duties or does the service need to be provided by the freelancer themselves?
- Is there an obligation on the part of either party to provide / accept work?
In my experience most freelance engagements fall foul of the first 2 checks and unless a new approach is adopted this means that most freelancers will be subject to IR35.
The future for freelancers – some potential scenarios
So, what does the future look like for those who still want to work in the events industry but who love the variety and flexibility that freelancing affords?
- Given the strong networks of freelancers that exist currently, is there an option for groups of like minded and like valued freelancers to get together and form a Cooperative?
An organisation that is owned and managed by freelancers will be able to sell their services on a contracted bases to event agencies, thus taking the burden of IR35 away from the agencies. Casual contracts within the cooperative would provide freelancers with flexibility and variety whilst also affording them some protection in relation to future contractual earnings in the same way that agencies have stage payment and cancellation terms with their clients. Furthermore, agencies will benefit from replacement support in the event that a freelancer may fall ill or not be able available for a specific contract.
- There are many freelancers who carry extensive experience beyond pure event management. Many have held senior positions within agencies and are experienced in strategy development, business development and product development. Business owners are already making it clear that these are the skills that will be needed in the period between lockdown as we know it ending and events returning in any great number.
So, whilst many permanent event managers may sadly lose their jobs in the absence of live events taking place, businesses will very much be looking to support their growth efforts with wider and more strategic skills – from people who are credible because they understand and are experienced in events.
By marketing these skills now, freelancers will position themselves well for the transition period.
- Organisations that survive this period will need staff who are at the top of their game and that may mean upskilling their teams in certain areas.
Is there an opportunity for freelancers to consider sharing both skills and experiences and pivoting to a training role in the short term? By dint of the variety of roles and organisations they have worked with, most freelance personnel have breadth as well as depth of experience. They are a font of knowledge on different event management techniques and most have experienced difficult situations that only experience can bring. By sharing these experiences, including the causes and outcomes, huge learning can be made by less experienced staff.
Whatever the future holds, I believe the industry is richer with a vast network of freelance workers. We all need to work together to ensure they feel part of the industry’s future.
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