Hiring freeze to continue in 2025: here’s how freelancers can secure payments and still thrive
The number of job vacancies has been sliding in the last quarter, which could mean a recession is heading our way. While freelancers could be in higher demand other challenges could arise when companies are pinching their pennies. Here we highlight how to seize opportunities while equally securing timely payments.
James Reed of the eponymous recruitment firm told the BBC there had been a sharp fall in the number of jobs being advertised and urged the government to rethink the recent increase in the tax employers pay on staff wages.
“We’re like the crow’s nest on a ship,” he said in a BBC report. “We get the vacancies coming into our website early, so we see what’s happening in the labour market.”
Vacancies on Reed’s website had fallen 13% between October and November, it was revealed this past Sunday on the Laura Kuenssberg programme.
While recessions in the past have triggered more opportunities for freelancers as companies choose to keep salaried employee overheads down, rates tend to feel a squeeze. Here we share ways freelancers can start strategies to keep their cash flow running smoothly.
Demand vs. rates
Recessions often put downward pressure on rates. You’ll want to thoroughly research industry standards and freelancer rates to establish a baseline for your services. Emphasise how your skills and experience could help clients achieve their goals cost-effectively.
Do deep research on your ideal client
Imagine what your ideal client would be like from their industry to their budget. Know your target client’s needs by reading company quarterly statements, social media posts and press releases. Ensure you become a commentator in their industry so they see you as a problem solver who is aligned with helping them achieve their goals.
Diversify
Relying solely on one income stream during a recession can be risky. Explore multiple platforms in more than one market and look for ways to make passive income streams (e.g., creating and selling digital products), and build a strong online presence to attract new clients. Brainstorm with friends and family on what you do best and how a product or service could evolve from that talent.
Guarantee payment with deposits and milestones
Chasing late payments is a hassle. During a recession, the risk of non-payment can increase. To protect yourself:
- Establish a clear payment structure: Use a written contract outlining the project scope, payment terms, deposit amount (typically 10-50% of the total fee), milestones, and due dates.
- Define milestones with measurable deliverables: Break down projects into distinct phases. For example, for website design, milestones could be: the initial design concept, completed mockups, front-end development, and final website launch.
- Communicate transparently: Discuss payment terms upfront, explaining the need for a deposit and how milestone payments benefit both parties.
- Invoice promptly and professionally: Send invoices as soon as a milestone is reached, using clear invoice numbers and detailed descriptions of completed work.
- Offer multiple payment options: Provide clients with choices like bank transfers, online platforms (PayPal, Stripe), or credit card processing.
- Follow up on overdue invoices: Politely but firmly address late payments, establishing a clear policy for late fees.
What freelancers can expect in a recession and how to prepare
If companies are feeling the pain of higher taxes, they will recoup that money elsewhere. Hiring managers will want value for money and could go for the cheaper option. This means you could be pressured to lower your rates or not go through an agency, so beware of the consequences of both (i.e. inability to pay your bills, undervaluing your experience and not having a statutory compliant contract). It goes without saying that if a recession does emerge in 2025 more freelancers may need to negotiate better payment terms and offer additional services to more clients to make ends meet. However, you can always stand your ground on your rates and highlight all the benefits and cost savings your client will have when working with you. In other words, get your sales cap on.
