Is freelancing the new black? It certainly seems that way—in fact, you might call this trend the new world of work. A new study by Freelancers Union and Upwork backs this up, finding that more people are freelancing by choice. Today, a little more than one in three workers in the United States are setting their own hours and being their own bosses. The findings of the study were interesting—here are some of the highlights:
“The majority (60 percent) of freelancers who left traditional employment now earn more.” Nearly a quarter of those surveyed said they specifically left an employer in order to start working freelance. And while there’s certainly risk involved in dropping out of the traditional workforce to go solo, most of these new freelancers said that within the first year they were making more money than the more “full time” salaries they left behind. The data doesn’t indicate exactly where people are in their careers when they opt out of traditional employment, but my own anecdotal knowledge of the trend suggests many of these are folks mid-career or later, so it’s hardly surprising that they’re quickly able to maximize their incomes in this way.
“Technology is making it easier to find freelance work.” More than half of the respondents said they’d gotten a project online, which was up from only 42 percent last year. And those who didn’t source work online, and instead credited personal and professional contacts for their work success? Chances are, with social media, many if not most of those “personal” connections were certainly retained, if not gained, through online platforms. I believe the online-only component of this networking will continue to grow in the future, with even some of the most old-fashioned businesses being more open-minded about bringing on all manner of business partners and employees remotely. In the past, a business wouldn’t even consider an agency that didn’t have offices near enough to accommodate fairly regular face time, but in the age of video conferencing and cloud technology that makes connectivity and collaboration a breeze, this need is becoming obsolete. It’s no surprise freelancers are taking advantage of this openness, and it seems likely this trend will continue in the coming years.
“Freelancers, especially Millennials, are optimistic about the outlook for freelancing.” An impressive 83 percent of the freelancers surveyed said they think the best days are ahead for freelancing. And interest is growing even among those who aren’t yet working this way—most non-freelancers said they’d be open to moonlighting if the opportunity was available to them. The fact that Millennials—many of whom are well into their 30s and not exactly workplace newbies anymore—are especially optimistic about freelancing is an indication that employers are going to need to become more open-minded about allowing their employees to start a side hustle. They will need to stop thinking of their employees as property, and start understanding what the modern job economy looks like.
Pros and Cons of a Freelance Economy
Clearly, there are many components of this freelancing boom. One is the popularity of freelancing among workers who are looking for more flexibility, and achieve it through the switch to a freelance career. But there’s also motivation in the growth of freelance from the business side, as well. But there are some downsides to consider as well. Let’s take a look.
The Pros. There are economic factors at work when it comes to outsourcing. Some businesses find it economically smart to blend freelance talent with full time employee talent, thereby reducing costs of benefits that go hand-in-hand with full time employment. Utilizing freelance talent can also make it easier for businesses to adapt and pivot quickly, and allow them to scale up or down quickly. Recruiting and hiring full time employees can be a lengthy process, so keeping a cadre of reliable freelancers in the mix can help ensure you can deliver, in any circumstance. For businesses, that’s a big benefit. Likewise, when work slows down, you know that your freelance team members are already in a good position to step up their work elsewhere, because they’re in no way beholden to you, and have maintained connections and contracts. They generally have multiple revenue streams, so their business model isn’t wholly reliable on you. For businesses, this can be very beneficial.
Another positive, from the business standpoint, is that when you assemble a freelance team to work on a particular client account, you can bring in talent that is ideally suited to the needs of that particular client. When you go the full time employee route, sometimes you’ve got a body on the payroll who might not be the best person for a particular assignment, but it’s a hole you’ve got to fill and it makes sense to fill that with someone already on the payroll. I don’t always think this delivers the best value for clients, but it is the way of the business world. Or at least it has been the way of the business world for a very long time. I’m happy to see that beginning to change.
Realistically, freelance work is like entrepreneurship-lite—or entrepreneurship without all the risk or stress. Freelancers gain the flexibility of not having their fate tied to one single business, one single boss, one single relationship. They get to set their own work hours, choose where they want to work, the clients they want to work with and the kind of work they most want to do—and how hard they want to apply themselves. And while that freedom comes with a certain amount of risk, it’s nowhere near the risk that being involved in a startup business often brings. We all know of the staggering failure rate of startups, and how devastating the failure can be. With freelancing, especially the work-from-home kind, you generally don’t need to invest loads of cash, even worse, go into debt in order to get started.
Cons. Not everyone is wired to be an entrepreneur, and every freelancer is, most definitely an entrepreneur. Some people who opt to work from home quickly find they miss the interaction and sense of community that goes that’s an integral part of an office setting. Some find themselves less motivated when working remotely than in a traditional setting. Some have trouble finding clients and work.
For businesses, relying on freelance talent can be inherently risky. If they aren’t beholden to you by way of full time employment and the agreement of work for wages that’s a part of that arrangement, you might occasionally find your freelance talent less than reliable when you need them most. They might be juggling other jobs and other clients and your work will have to wait its turn, which is only fair.
All in all, there are good and bad things about this trend toward more flexible careers and freelancing, but I think the good far outweigh the bad. What do you think? What’s your experience been with working with freelance talent and/or integrating freelancers into business operations alongside your FTEs? I’d love to hear the challenges you’ve faced and what you think of this trend in general.
Additional Resources on this Topic:
The Business Value of Adopting Live Streaming Video Collaboration
Here’s Why the Freelancer Economy is on the Rise
How Millennials Are Reshaping Work
How the Rising Freelance Economy Will Change Talent Acquisition Strategies