With telecommuting and online freelancing on the rise, many believe that the disruption would eventually affect the 9-to-5 work setup. As workers prefer flexibility and more time to be with their families, going to and leaving the office at specific times might become a thing of the past.
The rise of freelancing
Upwork’s Freelancing in America 2018 report cites the critical role of freelancers in the evolution of work in America. With a survey population covering more than 6,000 US workers, the independently-conducted study found that around 56.7 million Americans did freelance work in 2018, spending over 1 billion hours freelancing in a week. This number of freelancers in the United States is more than 40% of the full-time worker population of the country (without segregating those who simultaneously hold both traditional and freelance jobs).
Freelancing is particularly preferred by younger generations. In 2018, 42% of freelancers are in the 18-34 age bracket while 35% are 35-44 year-olds. Around 3 in 4 freelancers started working independently in the last five years.
When it comes to income, it wouldn’t be an exaggeration to say that freelancers are earning well. Around 32% of freelancers in 2018 earned more than $75,000, with some 10% reporting that they made $100,000 or more in the past year. A significant 4% belong to the high-income bracket, earning $150,000 or more. While the majority of freelancers earn less than $75,000 annually, the earnings are not that different from what typical workplace-based employees get.
In 2018, more are saying that they turned to freelancing as a preference, not because of a need. According to Upwork’s report, 61% of freelancers do it by choice, an 8-point increase from 53% in 2014. The report also reveals that an overwhelming majority of those who work independently prioritize their lifestyle choices over earnings, as 84% of full-time freelancers say they get the lifestyle they prefer while only 64% of non-freelancers share the same satisfaction.
The freelance setup is far from perfect as it is associated with anxieties among workers. However, 77% of those surveyed claim to have a better work-life balance with the setup while 63% report feeling anxious about everything there is they have to deal with. In case you are confused, these percentages don’t represent a dichotomy of being anxious or having a balance. To clarify, out of the 77% of the freelancers surveyed (in the 6,000 study population), the 63% in it say that they feel the anxiety of coping with the setup, but 77% (including the 63%) claim to be able to achieve balance in their professional and personal lives.
Interestingly, more freelancers in 2018 think that the best for freelancing is yet to come. There’s a 10% jump (87% in 2018 vs 77% in 2014) in the number of independent workers who are optimistic about the future of freelancing. Also, 4 in 10 freelancers say that the setup provides more opportunities and flexibility for them, something they don’t get from being traditional employees.
Why people choose to freelance
Seven reasons stand out in the decision to become a freelancer. They are as follows:
- Employees seeking to become their own boss
- Flexibility in schedule
- Working in a preferable location or setting
- Independence from office dynamics
- Opportunities to pursue personal passions
- Earning extra income
- The ability to choose own projects
Based on data from Upwork’s study, the top reason for full-time freelancers is the desire to become their own boss (81%) followed by the need for schedule flexibility (80%). In contrast, the most popular reason for part-time freelancers is the need to earn extra income (76%). Only 66% of part-time freelancers say that they are doing it to do away with the employee-employer or subordinate-boss setup.
Technology as an enabler
One vital driving force in the growth of independent work is technology, particularly the Internet and easier access to computers. In the study published by Upwork, 76% said that technology made it easier for them to find freelance jobs while 65% agreed (strongly/somewhat agree) that there has been greater demand for independent workers in the past years. More than 6 in 10 freelancers said that they found their jobs online. This is a significant jump from 42% back in 2014. Moreover, an overwhelming 82% of the non-freelancers surveyed expressed interest in being in an alternative job arrangement to make more money in view of technological advancements and innovations that make freelancing easier. On the other hand, 88% of freelancers said that future technological innovations are going to increase their opportunities to get more jobs.
Is freelancing creating a massive shift in the labor market?
Authoritative studies and statistics don’t indicate a big shift. Don’t expect freelancers to outnumber 9-to-5 work setup employees anytime soon. There has been considerable growth in the number of freelancers in the past years, but this does not point to a scenario wherein most people in their working age are no longer tied to an office or fixed working hours.
In reality, the percentage of the gig economy of the United States actually shrunk compared to its 2005 levels. Many may think that the labor market is heading towards freelancing and telecommuting, but it’s not the picture government statistics paint. According to the US Bureau of Labor Statistics, the number of Americans working as independent contractors, temporary agency employees, other alternative work arrangements, was lower in 2017 than it was in 2015.
Some economists and analysts were surprised by the official numbers released by the government, but upon further analysis, it’s not difficult to realize why it is the case. The growth in numbers is there, but because traditional jobs are also growing, freelancing’s uptrend does not seem game-changing. Working as Uber, Grab, or Lyft drivers is considered an alternative work arrangement, and the perception is that many are involved in this gig that challenges the 9-to-5 work setup. At the same time, the increasing ease in doing online freelance jobs is allowing more to work from home and be in alternative employment schemes. Still, the growth in these kinds of jobs or livelihood is not enough for them to appear like they are transforming the labor landscape.
It’s also worth noting that many freelancers have traditional (main) jobs, and they refuse to abandon these to do full-time freelancing. While the majority of those who left a job to become full-time freelancers (60%), many are still holding back mainly because of the following:
- Income unpredictability
- Uncertainty in succeeding as an independent worker
- Company benefits such as paid vacations and health/life insurance
- Worries over not finding enough work to sustain
- Difficulty in finding freelance jobs
Nevertheless, according to the same Upwork study, 77% of the independent workers who quit their main jobs said that they started earning more than what they were getting from the 9-to-5 work setup jobs they left in less than a year. A significant percentage, at 38%, even claimed that they earned more immediately after moving to full-time freelancing.
Freelancing and the economy
People prefer traditional jobs when the economic situation is doing well. Credit goes to the healthy US economy that the percentage of freelancers in the labor market dipped compared to how it was in the 1990s. Again, there’s real growth in the number of gig-type jobs in the past years, but it has not outpaced the increase in traditional 9-to-5 work setup. The US economy continued adding payroll jobs for 93 consecutive months, resulting in a 4% unemployment rate and 6.7 million available jobs.
The takeaway
MBO Partners has its own report for the “State of Independence (freelancing) in America.” Its numbers are lower than those presented in Upwork’s study, but many of the trends and general facts are similar:
- Freelancing is on the rise, but traditional jobs are not going away.
- Full-time independent work is viable and attractive for many workers.
- Demand for and interest in freelance work continue to grow in relation to economic factors and technological advancements.
- There is no massive shift in the labor market. People have been doing a mix of traditional and freelance work.
Independent workers, freelancers, and those in alternative work arrangements have contributed more than a trillion dollars to the US economy annually in the past few years. It wouldn’t be right to downplay the rise of freelancing, but it would be a stretch to claim that it is significantly changing the labor market soon. More people may take on extra jobs under alternative work schemes, but traditional jobs will continue to be relevant and prominent.
The 9-to-5 work setup is unlikely headed for extinction in the perceivable future. It may become less preferable, but it will remain as one of the standard schemes by which offices operate. It’s natural for businesses or corporate settings to seek order and predictability. The typical work hours that start from eight or nine o’clock in the morning and ends at five in the afternoon is what most workers, businesses, and governments have become accustomed to, so don’t expect it to be supplanted by something less familiar.
Image Copyright: Elnur Amikishiyev / 123RF Stock Photo
