Freelance work remains an important part of the US economy
According to a new study by Upwork, 2 million more Americans have joined the ranks of freelancers in the past 12 months. The pandemic caused a pause for some.
Around 59 million Americans have freelanced in the past 12 months, representing 36% of the US workforce – an increase of 2 million freelancers since 2019, according to a new study by Upwork.
This increase was driven in part by the influx of younger, highly skilled workers looking for flexible alternatives to traditional employment. This was the result of the study “Freelance Forward: 2020” of the independent US workforce.
Even amid the COVID-19 pandemic, freelancers contributed $ 1.2 trillion to annual income – a 22% increase since 2019, according to the study of more than 6,000 U.S. workers over 18 years of age.
SEE: How the gig economy is changing the IT company (TechRepublic)
The main results:
Young adults are turning to freelance work to take advantage of economic opportunities: In the midst of a tough graduate job market, half of the Gen Z workforce (ages 18-22) have freelanced in the past year, and of those, more than a third (36%) have started since the onset of COVID-19 .
Professionals are likely to consider freelance work in the future: 58% of non-freelancers who have no remote working experience due to the pandemic are now considering becoming a freelancer in the future.
“It’s no surprise that freelance work is on the rise, especially now that we are completely separated from what we are working on from what we are working on,” said Hayden Brown, President and CEO of Upwork, in an explanation. “The data shows that independent professionals benefit from income diversification, schedule flexibility and increased productivity.”
On the employer side, companies are finding that these professionals can quickly bring new skills and abilities to a company and strategically bend capacity up and down along with changes in demand and workload, Brown said.
“We expect this trend to continue as companies increasingly rely on freelancers as essential contributors to their own activities,” she said.
Many professionals were joining the freelance workforce for the first time to adapt to the changes and uncertainties of COVID-19, said Adam Ozimek, chief economist at Upwork.
“At the same time, the shift towards more flexibility in the workforce, coupled with the need to maintain continuity, has created a new demand for independent corporate professionals,” Ozimek said in a statement. “The changing dynamics for the workforce during the crisis shows the value that freelance work offers to both businesses and employees.”
Freelance work increases the chances
Respondents 55 and older said freelance work helps meet financial needs as they age, while 65% of freelance boomers said self-employment is a great way to transition into retirement.
The state of the freelance workforce
The study also found that:
The composition of the freelance workforce is getting younger: 50% of Generation Z employees (18 to 22 years old), 44% of Millennials (23 to 38 years old), 30% of Generation X employees (39 to 54 years old) and 26% the worker boomer (55 years and over) freelance.
58% of freelancers had more than five clients in the last six months, an increase of 3 percentage points compared to 2019.
The changing freelance workforce due to COVID-19
Despite the general surge in freelance work, COVID-19 has impacted all areas of the economy, and as a result, 10% of the U.S. workforce has stopped freelance work. These freelancers typically worked in professions most affected by social distancing and found themselves in non-distant work situations. Of those who took a break, 88% said they are likely to return to freelancing in the future.
On the other hand, 12% of the U.S. workforce started freelancing for the first time during the pandemic. From those who started:
o 48% already see this as a full-time and a long-term career opportunity
o 60% said there was no amount of money that would convince them to take a traditional job.
In addition, 67% of full-time freelancers said they were better prepared for the uncertainty of the coronavirus pandemic by doing freelance work than in traditional professions.
Working hours have either stayed the same or increased for 65% of skilled freelancers since the outbreak of the pandemic.
Freelance perspectives on skills and training
59% of freelancers have taken part in qualification training in the last six months, compared to 36% of employees.
54% of freelancers stated that soft skills such as communication and people skills are very important for their work.
Although 81% of freelancers said their college education was useful for the work they are doing now, 65% of those with a four-year college education wish they’d gotten a two-year degree instead and complemented their education with online training.
The future of freelancers
Non-freelancers who are new to remote work are considering freelancing in the future as it will make them more productive (73%). Respondents also said they would prefer to work remotely rather than return to a traditional office (74%). and earn extra income to manage the impact of the pandemic on their personal finances (85%).
A lot of optimism has been expressed: 86% of freelancers said the best days for freelancers are coming, while 71% of freelancers said the perception of freelancers as a career is becoming more positive.
Expect more young adults to become freelancers to take advantage of economic opportunities. In the midst of a tough college graduate job market, half of the Gen Z workforce (18-22 years old) were freelancers last year, and of those, more than a third (36%) started out since the onset of COVID-19.
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