Are you an independent contractor, sole proprietor or freelancer? Then you’re part of a growing movement, according to a recent study conducted by Edelman Intelligence.
By 2027, the study predicts freelancers will account for the majority of the American workforce.
In fact, as millennials and Generation Z start to make up a larger percentage of the workforce, the report theorizes, this milestone might arrive even faster. Forty-seven percent of millennials already freelance, more than any other generation.
Some 57.3 million Americans currently freelance, according to Freelancing in America: 2017 (FIA). All told, freelancers account for 36 percent of the U.S. workforce, and the $1.4 trillion they contribute to the U.S. economy each year represents an increase of nearly 30 percent since last year. Since 2014, the freelance workforce grew by 8.1 percent—faster than the U.S. workforce overall, which grew by 2.6 percent over the same period.
Here’s what else the study uncovered about freelancers:
Most are freelancers by choice, not necessity. After the 2008 recession, many Americans were forced into freelancing because they couldn’t find full-time jobs. But when the economy recovered, those freelancers didn’t flock back to the old 9-to-5. Almost two-thirds (63 percent) of freelancers in the survey say they started freelancing by choice, an increase of 10 percentage points since 2014. Some 59 percent of those in the survey started freelancing within the last three years.
The image of freelancing is changing for the better. In fact, 69 percent of survey respondents believe freelancing has become more respected in recent years, and 67 percent say the top professionals in their industries are increasingly choosing to freelance.
Freelancers are redefining what it means to have financial stability. In a post-recession economy, freelancers increasingly believe it’s more secure to have a diverse roster of clients than to rely on one employer for your income. Some 63 percent of survey respondents agree with this assessment.
The average freelancer isn’t short of clientele. On average, freelancers in the survey report having 27 different clients in the past 6 months. More than three-fourths of those clients are small businesses (with under 100 employees). Some 52 percent of freelancers say they consistently work with the same clients.
Nor are they short of income. Nearly two in three survey respondents who left a full-time job to freelance say they now make more money than they did as employees—and 75 percent reached that milestone within just one year. Thirty-six percent of freelancers earn more than $75K annually, and 12 percent earn more than $100K.
No wonder more freelancers are going full time. Since 2014, the number of full-time freelancers has increased from 17 percent to 29 percent. Just 16 percent of freelancers moonlight while holding down a full-time job, while 53 percent freelance part-time.
Are freelancers better prepared for the future than traditional, full-time employees? They’re certainly more proactive about planning for change. Overall, 54 percent of the U.S. workforce says they’re not very confident their jobs will still exist in 20 years. However, in the last six months, 55 percent of freelancers took part in job education to learn a new skill, compared to just 29 percent of non-freelancers. Perhaps that's because almost half of full-time freelancers say some aspect of their work has already been affected by robotics or artificial intelligence, compared to just 18 percent of non-freelancers.
Are you looking to find clients (or to hire a freelancer)? Start networking: The number-one way clients find freelancers is through:
- Friends and family (43 percent)
- Professional contacts (38 percent)
- Social media (37 percent)
- Online ads (27 percent)
- Online job boards (23 percent)
- Online freelance marketplaces (22 percent)
What’s the downside of being a freelancer? As you might expect, income unpredictability is the number-one factor that scares people away from going freelance full-time, followed by worries about the difficulty of finding work and not having benefits.
On the upside, people start freelancing to be their own bosses; choose when they work, where they work and what they work on; and to make extra money. It seems to be paying off: 50 percent of freelancers say no amount of money could convince them to take a traditional job.
Almost 5 million of America’s 13 million moonlighters are considering going freelance full time, according to the survey. If you’re one of them, SCORE can help you weigh the pros and cons, make the right decision and prepare for success. Work with a SCORE mentor, and start your journey to working for yourself today.