Unlocking SME growth with the rise of freelance collectives

Independence and flexibility. Those are the two most frequent reasons that people go freelance, according to the Malt and BCG 2022 study. In Europe, over 27 million people have already made the leap towards self-employment, and that figure grows daily. Freelancing has never been more popular.

The appeal is undeniable. Yet, the journey is often solitary, laden with administrative burdens and a yearning for larger collaborative ventures.

What if there was a different path? A way to harness the freedom of freelancing while ditching the downsides? Imagine a team where solo journeys converge into a powerhouse of shared expertise and pooled resources. Enter the world of freelance collectives.

Why is this business model so successful? What’s in it for freelancers and the SMEs who leverage them? And could it be the future of freelancing? We sat down with two of Europe’s pioneering freelance collectives: La Collab and Welance.

According to the Malt and BCG study, 68% of freelancers regularly work in teams with other freelancers. Sometimes this organization comes from the client, who builds a team of individual freelancers to collaborate on their project. But other times, a group of freelancers has already banded together and approaches clients offering to put their various expertises to work, solving multiple problems for the same client. This is what’s known as a freelance collective.

It’s crucial to note that the freelancers in a collective aren’t necessarily partners in the same business. Instead, collectives come in various shapes and sizes, and each one works in its own unique way.

Philipp Hentschel co-founded Welance back in 2011 as a GbR (a German “civil law partnership”), but later swapped structures to be able to bring onboard core members of the collective as shareholders. “Existing company infrastructure is not designed for the collective model, it’s too rigid,” notes Philipp. Alongside the group of shareholders and collective contributors, Welance also works with a “core team” of solid, loyal freelancers who are “aligned with the independent mindset and a mutual creation of value”.

Freelance collectives have been popping up in Europe for well over two decades, but in recent years, this way of working has boomed. And no industry attracts more groups of self-employed professionals than the digital sector,* in roles as diverse as app development, marketing, and consulting.

Freelance collectives tend to specialize. Take, for example, the large-scale Copywriter Collective, or the France-based La Collab.

*(Source: “There are 6 million highly-skilled freelancers in Europe, 3.4 million of whom work on digital projects.” - Malt’s estimation based on data from Eurostats)

There’s no simple answer to that question. Freelance collectives don’t fall under any existing legal company status or fixed structure. Every team of professionals makes their own rules. La Collab is “kind of a unique hybrid model, with participative governance and a horizontal management structure”, whereby project leaders interface with clients and match freelancers to projects. Then, city leaders for each of its “quarters” in Toulouse, Paris, Lyon, Nantes, Marseille, and even Brussels, are “in charge of their community and the development of the collective locally,” says Joanna. “For us, this is a great way to offer local and hyper-personalized services, in line with the potential specificities of a region or country.”

But when collectives like Welance typically call on the services of 60 to 70 different freelancers every year, it’s reasonable to wonder how they maintain consistency and quality for their clients.

“Well, we have our internal standards and guidelines,” Welance CTO and principal engineer Enrico Icardi tells us. And while most companies guarantee smooth project management with SaaS productivity tools on a pay-per-employee basis, these pricing structures can often leave freelancers in a state of limbo. Collectives have managed to solve this problem by leveraging their internal talents.

Over at La Collab, client satisfaction is the remit of project leaders, who systematically send a satisfaction survey at the end of a project. And the collective has implemented other stringent measures to guarantee quality.

So, why are freelancers so taken with the idea of working as part of a collective? Well, there are multiple factors at play.

On a personal level:

1. It helps freelancers tackle feelings of isolation. As Joanne puts it: “with a collective, you gain colleagues, friends with whom you can share your successes but also your doubts”. We all have a natural need for interaction, which is difficult to fulfill when working for clients remotely from home. Beyond simply collaborating on projects, being part of a collective enables you to build relationships and spark up conversations with like-minded people that understand where you’re coming from.
2. It gives freelancers the possibility to learn and improve their skills. Working with experts whose skill sets complement your own strengthens your understanding of the different stages of the business cycle. La Collab “encourages freelancers to stay at the cutting edge of their business”, while Welance recognizes the power of moving away from a theoretical learning model to “training and building trust in the context of servicing a new client”.
3. It allows freelancers to remain independent. Despite being part of a larger network, in some cases, members of freelance collectives are afforded even more valuable flexibility and autonomy than if they were going it alone. “It’s almost a ‘corporate’ structure, but at its core is freedom,” Enrico tells us. “Solopreneurs can get stuck working on a big project over a long period of time. With the collective model, they just need to let us know if they need some time off and someone else can take over.”

Professionally speaking, freelancers benefit from working with a collective in many ways:

1. Pooling contacts allows members of a collective to grow their own networks and find work opportunities. For Welance, “it can become interesting to build contacts around collective co-workers, teaming up with other freelancers and micro companies to offer collective services from IT to illustration”.
2. A solopreneur may struggle to get their foot in the door on large-scale projects that require multiple skill sets and time-intensive scheduling. “When you’re in a collective, you suddenly have the same striking power as an agency.” La Collab is a large collective, with over 160 core members and 1,500 freelancers. “We can meet the same requirements as big, traditional organizations,” notes Joanne. Harnessing collective intelligence and complementary competencies boosts freelancers’ potential to get involved in bigger projects – and bigger clients and projects usually increase potential for higher prices, too.

Initially, freelance collectives can look similar to traditional agencies. But when you scratch the surface, you realize they actually work very differently, and startups and small businesses are increasingly interested in benefiting from this way of working.

Collectives are capable of meeting two of their clients’ needs:

1. “Recruiting” for a specific job role: companies that are looking to fill a gap (temporary or otherwise) in their team can turn to a collective to help them find the best person for the job.
2. Building a team of freelancers: for larger-scale projects, collectives can offer a ready-made team of experts geared towards shared intelligence and complementing each other’s skill sets.

This new way of working interests companies for three reasons:

1. Adaptability: unlike some traditional agencies, the freelance collective business model is flexible by design. Both for the client and the freelancer. For Joanne, “[clients] can hire us for a specific mission, short or long term. We can work on a one-off project or fill the role of an external marketing team, almost like a fully-fledged part of their company. With such a big community, we can offer the perfect match for every project, industry, budget, level of expertise, and personality”.
2. Access to expert profiles: in many lines of work, the best talents are freelance. Companies get this. So, freelance collectives facilitate access to the best talent on the market.
3. Sharing common values: businesses that choose to work with a freelance collective rather than an agency are attracted to this more agile way of working. They want to work with a group of people who are happy to do what they’re doing and who share common values. In many ways, it’s a cultural choice, too.

Freelance collectives are certainly on the rise across Europe. Does this mean they’re the natural next step in the freelance landscape?

Being your own boss, without having to go it alone. That’s what freelance collectives offer self-employed professionals. This promise has enticed thousands of freelancers into a more fulfilled professional life, and companies into more easily working with experts.

La Collab would tend to agree: