I’m happy to share highlights from the 4th annual Freelancing in America report, produced jointly and published in October 2017 by the Freelancer’s Union and Upwork, the freelance job site. The online survey queried 6002 U.S. adults who had performed full or part-time Freelance work between August 2016 – July 2017. Freelancing was defined as temporary, project-based, or contract work performed at a for-profit or not-for-profit organization or government agency. There are gradations of Freelancing, described as follows:
Independent Contractors 35% exclusively Freelancing, f/t or p/t
Freelance Business Owners 7% exclusive Freelancers who’ve hired employees
Diversified Workers 28% working a mix of p/t traditional jobs + Freelancing
Moonlighters 25% f/t or p/t traditional employees who take side projects
Temporary Workers 7%
See the full report here Freelancing in America
There are now 57.3 million Freelance workers in the U.S., representing 36% of the nation’s workforce and a 30% increase over 2016, and we contributed about $1.4 trillion to the U.S. economy in 2017. Since 2014, the Freelance workforce has grown three times faster than the traditional workforce. At that rate of growth, most U.S. workers will be Freelancers by 2027. The Millennial generation is leading the way, with an astonishing 47% participation rate in the Freelance workforce.
Demographically, slightly more men (54%) than women (46%) are Freelancers. There is great diversity in educational background, with 32% having earned a high school diploma or less; 24% have earned a bachelor’s degree; and 19% have an advanced degree (those statistics are nearly identical to members of traditional employees). Most live in the South (40%) and in the suburbs (47%); 65% are white, 11% are black, 5% are Asian and those statistics also closely mirror the traditional workforce.
The majority of Freelancers report that they chose self-employment (63%) and 79% assert that Freelancing is preferable to traditional employment; 50% say they would not accept an offer of full-time traditional employment, at any salary. Freelancers feel respected, empowered and engaged in their work, excited to start each day.
On average, the full-time Freelancer bills 36 work hours a week. Freelancers seek to diversify the clients with whom they work and the services they provide; 63% feel that this strategy holds more advantages than working with one (presumably steady provider of adequate billable hours) client only. In 2017, the average full-time Freelancer worked with 4.5 clients per month and repeat clients comprise 52% of their work. Economically, some Freelancers did rather well in 2017: 36% earned more than $75,000, with 19% who earned $75,000 – $99,999; 12% earned $100,000 – $149, 999; and 5% earned more than $150,000.
Presumably to enhance their value to prospective employers, Freelancers are noticeably more likely than their traditionally employed counterparts to upgrade their skills in response to an evolving job market, 65% to 45%. Virtual-reality related skills, natural language processing and econometrics are among the fastest-growing skill sets for Freelancers. More than 50% of Freelancers are concerned about the potential impact of Artificial Intelligence and automation on their future income, as compared to 19% of full-time traditional employees.
Cash-flow and getting paid weighs heavily on the minds of Freelancers. Among those who participate full-time, being paid at what is perceived as fair value (52%), income unpredictability (46%) and debt (46%) are concerns. Among part-time Freelancers, difficulty in finding work (47%) and debt (56%) are primary concerns. Sadly, 20% of full-time Freelancers lack health insurance; affordability is an issue for those with or without health coverage.
No doubt about it, there is greater economic instability in the life of a Freelancer as compared to the traditionally employed, the result of gaps in billable hours and checks that do not arrive within 30 (or even 45) days. 63% of full-time Freelancers report that they must tap into their savings one or more times a month, while only 20% of the traditional full-time employees feel the need to do so. 56% of Freelancers have less than $5000 in savings, compared to 49% of traditional employees who have such small savings. Perhaps in response to this harsh reality, 46% of full-time participants raised their hourly rates/project fees in 2017 and 54% plan to raise their rates in 2018.
Freelancing continues to have a significant impact on working and living in the U.S. and the expansion is expected to continue. Those who Freelance full or part-time report that they’re quite satisfied with the arrangement and a chosen few are doing well financially, at least at this time.
But the spectre of debt and an inability to amass savings loom large. The Freelancer Survey reported that in 2017, 20% of Freelancers lacked health insurance and as reported in Forbes Magazine in November 2017, 40% lack retirement savings. Yet, traditional employment continues to hemorrhage advantages. That promotion may come with a fancy title, but no raise to acknowledge the additional responsibilities. The health insurance plan costs more and covers less. Rumors of approaching lay-offs keep people awake at night. Getting, or holding on to, your piece of the American Dream has become more difficult.
How can you cope? Remember that the best defense is a good offense. Identify skills that can be expected to bring value-added to you and do what you can to obtain, package, promote and leverage them, whether as a traditional employee or a Freelancer.
Thanks for reading,
Photograph: Lewis Hine (1908) courtesy of the National Archives Girls at weaving machines in Evansville, IN