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Freelance work: Growing yet untouched economic sector

Freelance work: Growing yet untouched economic sector

When one thinks about a job or employment, the first things one pictures is a regular office setting, may be a customary cubicle with a personal computer and stationaries. Or if one wants to go a bit fancier, a corner office with a view and perhaps a personal assistant bustling through the day’s calendar and answering phone calls.

All these imageries are not far off if one is thinking of the traditional work setup. Well, it is a brave little world that we live in these days; thanks mainly to revolutionary tech industry the traditional work setup is gradually fading away. Today, employees in a dotcom firm or those in the technology sector are finding the traditional workplace arrangement increasingly unproductive; instead relaxed lounge-like workspaces are preferred by the days’ leading companies.

Not only that, some are chartering on new approaches to employment which might not even require the worker to be physically present in the workplace. With online systems to handle things like job assignments and payments, the new job market appears to have given back the work force full control of his/her time and money.

Non-traditional jobs today come in all shapes and sizes and, in this regard, a growing number of young professionals in Addis Ababa are choosing to work part time or on a contract basis these days, avoiding the office politics and the 9 to 5 tedium of full time employment.

These young professionals, usually from the creative industry, specialize in a specific task and work in different companies, often simultaneously. Writers, graphic designers, web or software developers, photographers, accountants, business consultants, gender experts and many others are choosing the freelance route. But are they actually finding jobs?

Freelance Ethiopia is an increasingly popular telegram channel connecting potential employers and freelancers. SemegnTadesse, founder of the channel says he began the channel for his own services. “I couldn’t find the right people for the companies I started. I needed people with specific skill sets. Too specific that they couldn’t be recruited without Freelance Ethiopia,” he says. His companies frequently look for web and software developers, designers, sales people and several other professionals.

The Freelance Ethiopia channel caters to all kinds of request from potential employers from telegram promoters, models and drivers to machine learning engineers and architects.As of this writing, the Freelance Ethiopia channel has over 13,000 subscribers and recorded over 500 unique employers in the past year. The jobs are diverse, could be based on a specific project or a limited time frame, and some employers search for people they could hire fulltime.

Allure, an up and coming marketing company in Addis advertised all their job openings on the channel. Ethiojobs, one of the largest human resource websites in the country does not have an option for people to register as freelancers. The job postings that get close to freelancing are advertised as contract based work but the terms are diverse.

“I have been freelancing for the past three years. I have a full time job at an advertising firm but I have a lot more time to work for other people designing things,” says Hermela, 25, a graphic designer. “I used to have an easy time when I first started. I just graduated from university and I was actually finding a lot of people were interested in the work I was doing,” she says.

Hermela enjoys the flexible hours and working on her own terms. Freelancing allows people more time to devote the person to an interest but being your own boss has its owned downfalls. Hermela frequently fall to procrastination, leaving the work undone until the final moment. Juggling many jobs from several employers can kill any extra time and keep the freelancer busy. Good time management skills are a huge requirement.

“I don’t usually get paid on time. I deliver like I’m supposed to but getting paid takes forever,” she complains. Since freelancers don’t generally sign contracts and aren’t on the company’s payroll, their payment system can often be neglected. Once a project is done company representatives cease to contact freelance employees and the freelancer is usually the one to keep reminding the company their relationship is not yet completed.

The formal job market is yet to fully recognize the significance of freelancers; but the legal system is even further behind. Individuals new to the workforce or to freelancing can sometimes have a difficult time navigating the financial and legal aspects involved. Some companies hire freelancers for a specific job or for a limited amount of time with the understanding that the freelancer pays their own taxes. An impossible assumption since freelancers must have a business license to pay their own taxes.

Hermela used to get paid by her employers who would deduct 2% as their own withholding tax. The problem, she says, began when the laws changed and freelancers had to register with the taxation and customs authority or get taxed 30%. “I don’t really know what the process involved is. Companies ask me if I can give them a TIN (tax identification number). I went and got registered as a tax payer but I know there are some steps I’m missing out on.”

When asked why she doesn’t research the correct way of handling her finances she answers, “This is just a side hustle for me. It isn’t that much money. I’m only doing it to supplement the salary from my full time job.”

Although Hermelagets taxed 2% by her employers as withholding who then report it in their tax filings, some employers are increasingly asking freelancers for receipts or other proof of payment. The government now requiresemployers to pay 30% taxation for freelancers they hire or freelancers have toregister for a business license and pay taxes like any other company.

Workers that have just joined the workforce can easily get a TIN but license is close to impossible to acquire, the central problem being the need for an office space. The idea of an office contradicts the freedom of being a freelancer. It is an unnecessary cost to a person who can work from a coffee shop or a co-working space.

Simply put, the taxation laws have not made room for the freelance economy. Some employers don’t even report freelance workers because they are cannot get deductions on an essential operational cost. Many have given up on navigating a system that does not recognize freelancers or their contribution to the economy. Willthe government recognize the growing economic value of freelancing or will it continue to lose money?