20 January 2017

BUSINESS - Growth of the Freelance Economy

According to recent research commissioned by Upwork, 35% of the current US workforce is made up of freelancers, and that number is expected to grow.

This includes both traditional service and creative industry freelancers like writers, editors, photographers and graphic designers, and the new “gig” positions such as Uber drivers and Task Rabbits.

But it’s hard to get a handle on the accuracy of these numbers.

There is other research by the National Bureau of Economic Research indicating that freelancers make up a much smaller percentage of the workforce, and a report by PayChex that shows as many as 1 in 3 workers are freelancers in some form.

Even conservative estimates, that disagree with the 35% figure, show that alternative work arrangements (including freelancers, gig workers, and other contract workers) have more than doubled in the last decade.

Many freelancers feel that their work is seen as less valuable than traditional work, and there are concerns that freelancers are at higher risk than their traditionally employed colleagues – risks that have not yet been addressed by legislation or collective action.

And, at the same time, many freelancers express high levels of job satisfaction, and per UpWork’s report, 79% of freelancers say they are happier than they would be in a traditional job.

But PayChex’s survey of 400,000 resumes found that nearly 50% of freelancers have been in their position for less than 3 years, and that many people only freelance for a year before returning to traditional work.

There’s also a perception that freelancers are millennials who aren’t a good fit for traditional work arrangements.

This is exemplified by frequent think pieces about the challenges of millennials in the workforce, though these have been strongly disavowed by millennials.

This perception also doesn’t necessarily match the reality, but again different research shows different numbers.

Stephane Kasriel, CEO of Upwork, told Forbes that “the younger part of the workforce is much more likely to be freelancing than the older part,” citing 47% of millennials as freelancing either part-time or full-time, compared to 28% of baby boomers.

Other research shows that nearly two thirds of professional freelancers are older men.

Leslie Dyson, president of the Canadian Freelance Union, told the Globe and Mail that, “We have members from across the country, all ages, all levels of education, all income levels, some who can make a really decent living and others who are just scraping by.”

One reason that the research is so inconclusive at this point is because the definition of freelancing is in flux, and many participants in the freelance and gig economies work part-time, and often work multiple positions.

It is challenging to find these workers and understand the complexities of their work lives, because the system is changing even as the research happens.

Even industries that were previously unavailable to freelancers, such as medicine and education, are opening up to independent contract and other alternative work arrangements.

Both the research and the reality agree – the freelance economy is diverse and complex, and will provide both new opportunities and new risks to industries and individuals.

About Tiffany Sostar
Tiffany is a writer, editor, academic, and animal lover who came late to her appreciation of pets. At 18, a rescue pup named Tasha saved her from a depression and she hasn't looked back. She has worked as the canine behaviour program coordinator for the Calgary Humane Society, and was a dog trainer specializing in working with fearful and reactive dogs for many years. She doesn't have any pets right now, but makes up for it by giving her petsitting clients (and any dogs she comes across on her frequent coffee shop adventures) extra snuggles.

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