It’s the end of 2019, a momentous decade for the freelance revolution, and a traditional time of year to reflect on events, accomplishment, and expressions of thanks. For this article, I thought it might be interesting to revisit Upwork’s excellent series of surveys: Freelancing in America. More specifically, I wanted to take a five year look back and compare the findings of the study this year with results from 2015. What’s changed, what’s not, and why?
It’s worth noting that 2015 was an important milestone in freelancing: a year that many digital talent marketplaces were birthed. One might say 2015 was a year when freelancing hit a tipping point and started to offer a legitimate, respectable, career alternative to traditional employment.
So, what did we learn about freelancing in 2015, and how does it compare with the more recent report produced this year?
Size of the freelance workforce. In 2015 Upwork determined that 34% of the American workforce had earned income through freelancing. In 2019 the number had not materially changed in percentage terms: 35%. However, 53 million Americans freelanced or gigged in 2015, while 57 million did so in 2019. The growth of four million freelancers is impressive.
Freelance workforce mix. There hasn’t been much change in the mix by percentage. The big shifts are more gigsters and a small shift down in Independent Contractors (freelance professionals). In 2015, participation rates were: Independent Contractors (36%), Gigsters (diversified workers) (26%), Moonlighters (25%), Freelance Business Owners (5%) and Temporary Workers (9%). In 2019, the percentages were as follows: Independent Contractors (33%), Gigsters (30%), Moonlighters (26%), Freelance Business Owners (5%) and Temporary Workers (6%).
Choice v. necessity. In 2015 60% of freelancers were freelancing by choice and not necessity (lost their job, looking for full-time employment). In 2019, it was pretty much the same. Sixty percent also identified themselves as freelancers by choice. However, of those individuals who were free-choice freelancers in 2019, the group split evenly in whether freelancing was a long term career decision or temporary. Fifty percent saw it as long term and 50% described freelancing as temporary.
Diversity. In 2015, slightly more U.S. freelancers were racially or ethnically diverse than in 2019: in 2015, 36% were diverse vs. 32% in the workforce generally. In 2019, 38% were diverse vs. 34% among US workers overall.
Gender. In 2015, 60% of freelancers were male, and 40% were female. In 2019 the gender distribution was virtually the same (59% male, 41% female – reference: Statistica)
Age. The average age of freelancers in shifting downward. In 2015, over half of freelancers were under 40 years old. In 2019, more than half were younger than 38. Older freelancers continue to be a force. In 2015, 19% of freelancers were over 55 years of age. In 2019, it had risen to 20%.
More on age. In 2015, the generations most likely to freelance are the youngest (18-34) and oldest (55+). In 2019, this trend continued for the younger freelancers, with Gen-Z (18-22) as the most engaged generation with 53% of freelancers below 23. The oldest cohort (55+) also grew, with 29% of freelancers in that category.
Commitment to freelancing. In 2015, 50% of freelancers said that no amount of money would encourage them to take a traditional job. Fifty-one percent said so in 2019.
Why they freelance. The top five attractions for freelancing are the same for 2015 and 2019: In order: (1) Schedule Flexibility, (2) Be One’s Own Boss, (3) Location Flexibility, (4) Choice of Work, and (5) Ability to Pursue Other Interests
The range of freelance professions is growing. Freelancing is not reserved for techies; it’s a “big tent” that’s attracting independent professionals in many areas. Top 5 occupations for freelancing according for the 2019 study: Arts and Design (75%), Entertainment (55%), Construction (52%), Architecture and Engineering (42%), Computing and Mathematics (42%).
Where do freelancers find their work. The top five sources of freelance work were interesting. These data point out the growing role of freelance marketplaces as a source of work for freelancers, but by no means the primary source; the percent of work gained through digital talent marketplaces is less than work found through personal contacts: current and previous clients, and professional and personal networks. In 2015, the sources were Friends and Family (36%), Professional Contacts (35%), Social Media (29%), Online Job Boards (29%) and Digital Marketplaces (25%). In 2019, the top five were fairly similar: Previous Clients (41%), Friends and Family (38%), Professional Contacts (37%), Social Media (37%) and Digital Marketplaces (29%).
Finding work through online. In 2015, 73% offered that tech was making it easier to find freelance work. In 2019 that percentage was increased to 77%.
Earnings. In 2015, the majority of freelancers who left traditional employment earned more within the first year of becoming a freelancer. In 2019, freelancers also earned more but most increased their earnings within the first six months.
Freelancers are optimistic about the future. In 2015, nearly half of freelancers believed that their income from freelancing would increase. And 83% of 2015 freelancers asserted that the best days for freelancing were ahead. In 2019 91% of freelancers were optimistic about the future and believed their best days were ahead.
Moreover, in 2019 there were other indicators of freelance optimism: 71% saw perceptions of freelancing as a career becoming more positive, 66% thought there was greater demand for freelancers, 64% said that top professionals are increasingly choosing to freelance, and 63% of respondents thought that the freelance job market had increased significantly vs past
Top concerns shared by freelancers. The top concerns of freelancers in 2015 and 2019 were similar; despite the attractions of freelancing, financial worries were meaningful. In 2015, healthcare costs, the unpredictability of freelancer income, saving for retirement, taxes and finding more clients were top five. In 2019, saving — saving enough and saving for retirement — were on top followed by unpredictable income, being paid fairly, and healthcare costs.
Skill proofing. Although not mentioned in the 2015 survey, the 2019 data brought out some important findings in the area of L&D and skill proofing. 65% of freelancers participated in skill training within the last six months (vs. 40% non-freelancers). Eighty-one percent of freelancers asserted that freelance business and interpersonal/relationship skills are important to their work. Finally, when asked why they invest in training, freelancers explained the following: 46% were focused on staying up to date in their field, 43% were committed to keeping up with changing tech, and 40% sought training that would help them learn higher paying skills.
Well, there you have it. Some areas of considerable change, and others where the change has been small at best. The big message coming from this comparison: the #freelancerevolution continues to be an important and growing factor in organizations, and an increasingly attractive career alternative for individuals. It also suggests some interesting messages as we look to the future:
1. These data suggest three career arcs in future: traditional employee, professional freelancer, and a hybrid category for people who move in and out of freelance roles more than once during their career. I’m an example: I’ve freelanced and taken executive roles in big companies, based on the project, the team, the reward, other demands on my life (aging parents, new child, community commitment, etc), and importantly the economy.
2. Platforms need to step up their game. One of the most interesting findings is the relatively low positioning of digital talent marketplaces and job boards as strong sources of work. The implication, as I’ve written recently, is that platforms need to provide more value to freelance platform members, and those platforms that do so are more likely to thrive. Freelancers are looking for better insight on what’s in demand, access to skill-proof training in hard and soft skill areas, help in building their brand and professional network, and winning more business. But, these data also send a clear message to current and future freelancers: freelancing is a business and needs to be managed – actively, professionally, and personally.
3. Freelancing is a big tent. It’s easy to think of freelancing as Millennial and focused on engineering and tech jobs. The fact is, it’s a big tent in terms of the range of professions, the types of people, and the ages. As we learned, 25% of freelancers are over 55, and creatives outnumber software developers by a significant margin. Are we setting up these cohorts equally, and thinking in terms of the differentiated service that different cohorts will need. As freelancing continues to broaden professionally and demographically, the needs of different populations will require attention.
4. Financial worries are real. Freelancing is a tale of two cities, to borrow from Dickens. One subset of freelancers is in considerable demand, is paid well, usually working on 2-3 projects, able to save for vacation or retirement, works primarily remotely, and is content. But others, many others, are struggling to make the minimum wage, have no buffer, are likely to have dropped healthcare because of expense, and are managing week to week. Like many others, I’m concerned that California’s new “Uber law” (California Assembly Bill 5 (AB5) or the “gig-worker rule”) is overkill, but the financial worries of freelancers are real and need to be addressed by a proper health and financial safety net. Getting the law right in California and elsewhere is part of the challenge.
Viva la revolution!