Remote freelancing, online outsourcing and connected societies are changing the way the world does business. Where traditionally outsourcing creative work would have involved tracking down, meeting and engaging a suitable freelancer or design agency in your locale, using modern work platforms could see you outsourcing work anywhere from Birmingham to Bangkok.
All agencies want to make sure their services are competitively priced, and keeping freelance costs down is an important part of controlling your budgets – especially if you’re one of the increasing number of agencies relying primarily on a flexible or remote freelance workforce to complete client work.
One of the golden rules of business is that you get what you pay for, meaning if you pay less for a product it’s likely to be of inferior quality – but with remote work able to be completed by freelancers across the globe, that’s no longer the case.
Creative and technical work can be completed to a high standard just about anywhere in the world, and with average living costs varying by orders of magnitude that means the rates paid can be much lower.
Outsourcing overseas has been possible for larger firms for years – India’s booming IT sector was built on western conglomerates moving operations there to take advantage of lower costs (the country’s largest private sector employer is IT firm TCS, with over 300,000 staff), but has historically needed large up-front investment to make it work.
Outsourcing for all
The recent surge in online work platforms like Coworks means those up-front costs have disappeared. It’s now possible to make one-to-one connections and match a freelancer’s skills exactly with a client’s needs. International outsourcing is easier than ever for companies and agencies of any size. In many cases engaging a remote freelancer to complete a project is even easier than tracking down someone local – you don’t even need to leave your desk.
That’s not to say international outsourcing is a perfect solution. Hiring someone on the other side of the globe comes with interesting communication challenges. Not only might you have the language barrier to contend with, but they’ll probably be in bed when you want to get work done. It’s also important to note that, as with all online marketplaces, large outsourcing websites can be used by unsavoury individuals.
Perhaps the solution is a happy middle ground – outsource far enough away to take advantage of lower prices, but close enough to home that time differences and communication problems can be kept to a minimum.
What should you expect to pay?
Our data shows the stark variation in average employee costs (salary plus applicable taxes) across the Eurozone. Northern European employees prove the priciest with Norway topping the list at £38.30 per hour, followed by Denmark (£28.63 per hour), Belgium (£27.77 per hour) and Sweden (£26.52 per hour).
At the other end of the scale, some eastern European workers have average hourly costs less than 10% that of Norwegians. Lithuanian employees cost £4.60 per hour, Romanians £3.35 and Bulgarians just £2.65.
Even these figures do not give a true picture of the savings to be made by sending work to our European neighbours. In most EU countries self-employed workers are responsible for their own tax affairs, meaning those costs will be factored into their day rate – so less expense and admin for the agency doing the hiring.
Remote freelancers also have the benefit of being just that – remote. You won’t need to provide equipment, workspace or comply with employment regulations for freelancers you hire overseas. It’s a purely business-to-business transaction – you just pay the invoice when the work is done.
Bienvenidos a Barcelona
So how would hiring a European freelancer work in practice? Our data shows that the average hourly cost of an employee across the 28 EU member states is £17.47, while the hourly cost of a worker in Spain was £15.05.
Spain’s recent economic woes have led to a surge of entrepreneurialism in the country. Highly skilled workers who were previously employed by large private and public sector organisations have turned to freelancing in droves. A study by IPSE and the University of Wales found that freelancing in Spain has grown by 50% in the last decade.
In 2007 the Spanish government passed the Self-employed Workers Statute, giving freelancers rights to unemployment benefits if their business fails, as well as maternity and paternity benefits.
The increasing prevalence of freelancing as a career choice and the benefits enjoyed under the 2007 Statute have made Spain one of the most appealing places in the EU to be self-employed.
All of this means that a UK agency with a need to outsource some design work can turn to an online platform and easily hire a talented freelance designer in Spain and save around 15% on staff costs, plus the associated expense of having a freelancer on-site.
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