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Business save money by opting for freelancers

Mon, Jul. 16, 2018
CAIRO – 16 July 2018: In the banking sector, one of the most sought after freelancers are editors and translators. Khadiga Aly, a HR manager at a multinational bank, told Egypt Today that her bank has repeatedly sought after freelancers, mostly editors and translators, when there is a task that needs to be completed.

With prices doubling and incomes barely increasing, picking up freelance projects has been a way to secure extra cash, in addition to a steady job. But whether it is due to the flexible working hours, being one’s own boss, or the cash inflow, more and more people in Egypt and around the world are opting to become full-time freelancers. As it stands, the informal economy has reached about LE 1.6 trillion, contributing some 40 percent of the gross domestic product (GDP), according to official figures, and has been increasing over the past few years.

Although freelance work doesn’t necessarily fall under the informal economy, it often does as it goes undocumented or accounted for. The global figures point toward a move away from 9-5 jobs and toward more flexible hours and work conditions. Forbes’ Jeff Wald, co-founder and president of a leading platform for the management of contract and freelance talent, expects around 35 percent of the workforce to become freelancers and independent contractors by 2020.

“Generally speaking, we have not had freelancers come in looking for projects, however, when we write brochures or reports, we put out adverts on freelancing websites to ask for editors and translators.” Explaining why they do not have a permanent staff member to do so given their size and demand, Aly explained that it is more cost-effective to bring someone in when there is a need. “Having a full-time or part-time staff member means that they need a desk, we need to pay utilities, taxes, and so much more; it is just cheaper to get freelancers sometimes,” Aly reveals.



These freelancers, explains Aly, have started being brought in over the past ten years; previously, these kind of things used to require a more complex process, whereby the project typically ended up going to companies rather than individuals. Commenting on whether they sign contracts with their freelancers, Aly says, “Look, I have worked in places where they did not give contracts, and they were international companies too, however, we do have a friendly contract with our freelancers. It is not long and it simply contains terms and conditions that focus on confidentiality, high standards and payment terms.”

Engy Mohamed, an HR manager at a Cairo-based digital marketing company, has had a different experience from Aly’s. “We get resumes sent in to use every couple of weeks; some from designers, some from content writers. They do not want to come into the office, people prefer working from home now. Between Cairo’s traffic and their lifestyles, it is just easier. See, they do not have to work during the day and they have flexibility, and in exchange, we can pay them less than a full-time worker if they are working with us on a regular basis; this is not the case if it’s a one-off project or something like that,” says Mohamed, whose company does not offer contracts. Giving contracts, according to Mohamed, is complex and would require a long process.

It would also require people to pay taxes and would require the company to do so too, something that freelancers would prefer not to do, if it means that the cash goes into their pockets. “We have been in a situation a few times where we ask freelancers what they prefer, everyone we asked preferred talking the money. The law requires us to produce contracts, but not doing so brings us better freelancing deals.”

While Asia is still leading the freelance economy on a global scale—freelancers from Asian countries, namely India, Bangladesh, Pakistan and the Philippines, are freelancing worldwide, Egyptians are increasingly invading the sector. According to the 2016 Online Labour Index, which measured the top 20 worker home countries, Egypt tanks 10th in the global freelance economy, with leading figures in software development and technology, followed by the creative and multimedia industry, and writing and translation.



With rising numbers of freelancers in Egypt, freelancing websites have become even more popular due to their ability to connect freelancers with companies and their ability to guarantee that the client will pay the freelancer the agreed amount after the completion of the task or project. However, freelancing websites do this for free. While, wesbites, for example FreelanceME, does not take registration costs from companies or freelancers, they often charge freelancers between 5 percent and 20 percent of their income. Upwork, for example, charges freelancers 5-20 percent depending on a freelancer’s collective billing with every client.

When it comes to legalities of freelancing and paying taxes, a lot of freelancers in Egypt are either unaware of the laws governing them or unwilling to learn them to avoid paying taxes and reporting their income. Speaking to Egyptian lawyer Abdallah Ahmed, it becomes clear that freelancers and companies need to report their business and pay taxes accordingly, if their income is above a specific threshold. “On a freelancer’s ID, they need to register as s freelancing professional. If a freelancer is an engineer then they write freelancing engineer, and so on; they do this by registering using their certificate and their syndicate information. They then need to pay taxes and report their activity,” explains Ahmed.

When it comes to banks, there are difficulties to do with producing credit cards and debit cards, explains Ahmed; however, if a freelancer provides the invoices from clients instead of their salary certificate, the should be able to issue them one. As for companies that hire freelancers, they are required to register their freelancers and report them; according to their salary, they then need to pay taxes.


 
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