One in five self-employed workers are economically dependent on another entity

In 2017, in France excluding Mayotte, 3.1 million people, i.e. 11.5% of employed people, regarded themselves as self-employed (chart 1) They stated that they worked on their own account, or as the paid head of a company, managing representative or chairman and Chief Executive Officer (CEO) as their main job. Out of all self-employed people, 920,000, i.e. 30%, stated their business was subject to a relationship of dominance with another economic entity, whether a client, upstream relationship or intermediary. A client or upstream relationship (trading group, purchasing alliance, cooperative, franchise, brand licence, lease-management organisation, etc.) is termed dominant if it represented at least 75% of total revenue over the last 12 months. An intermediary (e.g. a digital platform) is termed dominant if it is named as one of the main methods of making contact with customers.

Out of those self-employed people with a relationship of dominance, 620,000, i.e. 20% of all self-employed, are economically dependent: they anticipate significant difficulties that may threaten the survival of their business if this relationship is broken off (for those with a dominant client or in an upstream relationship of dominance), or do not cite any other access to customers (for those using an intermediary).

Economic dependency only on a client concerns 10% of the self-employed; it is the most frequent form of dependency. 7% of the self-employed depend on an upstream relationship and 4% on an intermediary.

The bigger the share of their revenues the main client represents, the more the self-employed anticipate significant difficulties if they were to lose this client. That is the case with over two thirds of the self-employed whose main client accounts for over 75% of their total revenue, compared with less than half of those whose main client represents between 50% and 75% of total revenue (chart 2). In addition, the higher the main client’s share in the business’ revenues, the more pressure it exerts on work organisation: 19% of self-employed people who worked for a single client over the last 12 months state that the client determines their starting and finishing times for work, compared with 8% of self-employed people whose main client represents less than half their total revenue for the last 12 months.

Economic dependency also goes hand in hand with organisational dependency in the case of upstream relationships. When questioned about the obligations resulting from upstream relationships of dominance, the self-employed people concerned all cited at least one. They highlighted constraints regarding prices or rates (76% of them) more often than choice of suppliers, products or services, or the setting of working hours (56% cite at least one of these three constraints). 68% of self-employed in an upstream relationship of dominance anticipate significant difficulties if this relationship is broken off. This proportion increases to 75% where the upstream relationship imposes price obligations. It rises to 85% where a price obligation is combined with an obligation on the choice of suppliers or products, or working hours.

Economically dependent self-employed people do not have the same type of customer base as other self-employed people. They target companies more (48% versus 32% for self-employed people in total) and are twice as likely to target administrations (11% versus 6%). On the flip side, a smaller proportion of them sell their goods and services to private individuals (41% compared with 61%).

On the other hand, economic dependency as a whole appears to have little connection with business status (incorporated company, sole trader or microenterprise) or with whether or not they employ other people (chart 3). However, a higher proportion of those dependent on either a client or intermediary are classed as a microenterprise (28% and 36% respectively, versus 23% for all self-employed) and fewer of them employ other people. In contrast, upstream relationships of dependency concern self-employed people who have a greater connection with others: a higher proportion are employers (40% versus 35% for the self-employed in total), incorporated companies (52% versus 42%), have business partners (40% versus 25%) and work in a network (38% versus 27%).

Economic dependency is relatively rare among self-employed in trade, construction, household services or administration, teaching and health care (less than 15% of cases; chart 4). It is more frequent, on the other hand, in farming, where it concerns 41% of self-employed.

The three sources of dependency (client, upstream relationship and intermediary) weigh differently depending on the economic activity. Dependency on an intermediary is non-existent in trade, where dependency on an upstream relationship is over-represented (9%). Dependency on an upstream relationship is even higher in farming (26%, notably via cooperatives) and financial services (17%). Use solely of an intermediary to gain access to clients (including digital platforms) is more prevalent in the transport sector (16%), real estate (10%), and information & communications (9%). Dependency on a client is more frequent in the information & communications sector (24%), transport (17%) and business services (15%).

In socio-demographic terms, economically dependent self-employed as a whole are similar to other self-employed and different from employees: they are older than the latter, with higher educational qualifications, are more often men and more likely to live in rural districts (chart 5). These characteristics vary, however, by business sector and by the different forms of dependency. So, those dependent on an upstream relationship, half of whom work in farming, are more likely than self-employed as a whole to live in a rural district, they have lower educational qualifications, are older and three quarters of them are male. In comparison with the self-employed as a whole, a higher proportion of those dependent on a client live in the Paris region (20% versus 14% for all self-employed), are immigrants or descendants of immigrants (23% versus 18%) and have set up or taken over their business more recently: 21% of them have been in this form of self-employment for less than 5 years compared with 17% for all self-employed. This situation of dependency may thus, in certain cases, reflect a lack of clients related with a business being in its early stages. The characteristics of those dependent on an intermediary are even more marked: 22% live in the Paris region, 30% are immigrants or descendants of immigrants and 26% have been in this form of self-employment for less than 5 years. They also have higher educational qualifications: 39% have a degree of higher education, compared with 29% of all self-employed.

Economically dependent self-employed are markedly more autonomous than employees but slightly less so than other self-employed (chart 6). In particular, 19% of those dependent on a client have their working hours determined for them by the client, compared with 9% for all self-employed. People dependent on an upstream relationship suffer more from a lack of influence over prices and rates charged (27% cite this as their main difficulty in the past year, versus 8% for all self-employed), which is a direct consequence of pricing obligations that 83% of them have, due to their upstream relationship.

Self-employed claim their usual working week amounts to 45 hours. This working week is even longer for those dependent on an upstream relationship (54 hours), notably because a higher proportion of them are farmers and employers. It is far shorter for those dependent on a client (39 hours) and those dependent on an intermediary (38 hours), which is close to that of employees (36 hours on average, taking full time and part time workers together). These reduced working hours are not always chosen: 15% of those dependent on a client and 24% of people dependent on an intermediary would like to work more, compared with 13% of all self-employed. Among self-employed who do not have any employees, 39% of those dependent on a client say the main reason for not recruiting anyone is a lack of work, compared with 32% for all self-employed. Self-employed more often have non-standard working hours: 75% worked in the evening, at night or at the weekend in the last three months, versus 42% for employees. This percentage is lower for self-employed people dependent on a client (68%) and those dependent on an intermediary (61%).

When questioned about their main difficulty, 7% of those dependent on an intermediary cited lack of sick pay (versus 4% for all self-employed) and 18% mentioned periods of financial hardship (versus 9%). Moreover, 42% earn less than 10,000 euros a year, compared with an average of 31% of all self-employed, a difference that is at least partly due to the lower number of hours worked. They more often do a second job in addition to their main form of self-employment, with 14% of them wanting another job in addition to or instead of their current one (compared with 7% of all self-employed) and 20% claim they have registered with the Public Employment Service, Pôle Emploi (versus 6% of all self-employed people). This proportion reflects a looser link with employment: 12% say they were unemployed one year earlier, compared with just 3% of all self-employed.