Thanks to shifting economic conditions, corporate downsizing and employee dissatisfaction, the freelance economy is on the rise. According to the Bureau of Labor Statistics, there were 15.5 million self-employed people in the United States in 2015. That’s one million more people than just the previous year, and all indications are that number will continue to rise. In fact, according to an intuit study, by the year 2020, more than 40% of the workforce in this country – or 60 million people – will be independent workers.
This pool of 60 million will include some of the best and the brightest, positions you may not necessarily think of when contemplating freelancing. Harvard Business Review calls this phenomenon “The Rise of the Supertemp.” These days, professionals like CMOs and attorneys are choosing to work independently rather than be hired into salaried positions.
The freelance economy is steadily growing. If you haven’t been affected by it yet, chances are you soon will be. Here is everything you need to know about the freelance economy.
The Economy Runs on Relationships
There is a bit of a paradox in this new economy. While freelancers choose to go it alone, they also thrive on relationships. Research indicates that the average age of freelancers in this country is between 35 and 55. These people come to the table with professional networks that extend through college and previous employment and projects. What does this mean for hiring and project managers? It means if you want to establish your business in the freelance economy, understand that word travels fast. While freelancers may not be full-time employees, they still want and deserve respect. Mistreat them and risk a poor reputation that is known globally.
Incomes Will Rise with Freelancer Demand
A survey by Contently found that the biggest challenge for freelancers today is landing more gigs. The median income for full-time freelancers who responded to the survey was between just $20,000 and $30,000. In contrast, the annual mean wage in the U.S. a year ago was $47, 230, according to the Bureau of Labor Statistics.
But, as demand for top freelancers goes up, they will begin to charge higher rates and live a better quality of life.
Experienced Freelancers are a Startup’s Dream
Today’s startups recognize the key to success in a crowded market is to remain agile. Hiring experienced freelancers allows these businesses to test different processes across departments to determine what will help them grow the fastest, but on a project-by-project basis where no long-term commitment is necessary.
And, seeing as most start-ups are on shoestring budgets, working with freelancers saves them money because they do not have to pay employee benefits.
Freelancers benefit from working with small startups because they can build their professional network while gaining new skills.
Working Remotely Will Become Commonplace
It is commonplace, and will become even more so, for freelancers to work remotely. A New York Times article reported that as of 2014, there were 3.2 million remote workers in the United States, and that remote working rose 79% between 2005 and 2012.
As more companies enter the freelance economies, more workplaces will “go remote.” This allows freelancers to live flexible lives, spending less time driving to and from work, and more time with their families. It also saves companies costs. A win/win.
The Rise of Co-Working Spaces in Major Urban Settings
Many independent workers feel isolated. But that’s changing thanks to the rise of co-working spaces popping up in major cities around the country. These spaces offer freelancers much-needed support and resources.
Companies like WeWork not only offer a sense of community and collaborative common spaces, they also partner with accountants, human resource professionals and web consultants. When you consider that WeWork was recently valued at $10 billion, you recognize this is not a passing trend.
New Markets Will Cater to Freelancers
A brief Google search will turn up a growing list of platforms, software and other tools designed to make freelances workflows more efficient and lives simply better. In the coming years, we can expect to see more companies offering solutions that will allow people to pursue full-time freelance careers.
And, if companies like Freelancers Union and Oscar are any indication, it’s only a matter of time before big-name insurance providers and even the government begin to cater to the needs of this growing workforce.
The freelance economy is growing in strength and numbers. In the coming years, it will be exciting to see services and policies created to support freelancers and those who employ them. Fostering a culture that is conducive to creating success will take hard work and determination by all who earn revenue within this new economy, but in the end, it will be worth it.