Even during a turbulent labor market, freelancers contributed $1.3 trillion to the U.S. economy in annual earnings, up $100 million from 2020, according to new research from Upwork, a work marketplace that connects businesses with independent talent.
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This growth was driven by an increase in the number of highly skilled, remote freelancers who left full time employment for flexible work alternatives, according to Upwork’s Freelance Forward: 2021 study of the U.S. independent workforce. At the same time, there was a notable decline in temporary workers and a rise in all other types of freelancing, combined, Upwork said.
There is “a very wide range of activities that count as freelancing,” compared with traditional employment, according to Upwork. “Freelance work can vary from selling goods online a few times a year to delivering groceries a few times a month to working as a full-time programmer or accountant.”
The study also found that 59 million Americans performed freelance work in the past 12 months, representing 36%—or more than one-third—of the entire U.S. workforce.
The share of non-temporary freelancers rose from 33.8% to 35% from 2020 to 2021, according to the report.
More highly educated, highly skilled workers are freelancing
One of the interesting findings is that freelancing is growing among highly educated workers. Some 51% of post-grad workers did freelancing work, up 6% since 2020, while the share of high school graduates or less freelancing has declined from 37% in 2020 to 31% this year, the report said.
Skilled remote freelancing also continued to grow in 2021. The research found that 53% of all freelancers provided skilled services such as computer programming, marketing, IT and business consulting in 2021, up from 50% in 2020, Upwork said.
“Freelancing has remained a stable part of the economy and less of a temporary option for many highly skilled professionals,” said Upwork Chief Economist Adam Ozimek.
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In terms of other demographics, new freelancers are largely more full-time, more remote, younger, in hard-hit occupations and more likely to be male, urban and caregivers.
Not surprisingly, flexibility and freedom are key motivators for new and existing freelancers. The report found that:
- 68% of new freelancer respondents said that career ownership is a top draw, followed by the ability to work remotely at 54%.
- 78% of skilled remote freelancers cited schedule flexibility as a key reason for freelancing, 73% cite location flexibility and 73% said freelancing allows them to pursue work they find meaningful.
Another big impetus for freelancing is that 44% of freelancer respondents said they earned more freelancing than with a traditional job in 2021—up from 39% in 2020 and 32% in 2019.
The ability to work remotely is another key draw. While 36% of the overall workforce does freelancing, 47% of those working remotely freelance, according to the report. Additionally, 31% of freelancer respondents reported they are working entirely remotely.
In terms of earning potential, 44% of freelancers said they make more money than they would working for a traditional employer, while 18% said they make the same and 38% said they make less.
The future of freelance work is bright
Upwork’s research also found that amid the so-called Great Resignation, 56% of non-freelancer professionals said they are considering freelance work in the future.
Nine in 10 freelancers believe that the “best days are ahead” for freelancing: Two-thirds (66%) said they are optimistic about their careers in 2022, compared with 53% non-freelancers, according to the report.
Ozimek also expressed optimism about the future of freelancing, saying that the traditional expectations of in-office, 9-to-5 workplaces have been tested, and many professionals opted for change.
“We have seen more interest since the pandemic in this way of working, and I believe that we will continue to see elevated levels of freelancing into 2022 and beyond,” Ozimek said. “Where I anticipate growth will be more on an occupational basis than an industry basis.”
For example, Upwork sees a lot of remote freelancing in the areas of web, mobile and software development across industries, Ozimek said. “Those skills are in demand in manufacturing, retail, healthcare and beyond.”
A key strategy for success in freelancing is to tap into freelance websites, the report said. Prior to the pandemic, one in four skilled freelancers said they typically found work through freelance websites.
Ninety-one percent of respondent freelancers who have used freelance websites before and during the pandemic said they would recommend them because they can find meaningful work, they can find trustworthy clients and they can gain access to tools and resources that help with project management and efficiency, according to the report.
Upwork said its eighth annual study surveyed more than 6,000 U.S. workers over 18 online between Aug. 27 and Sept. 29, 2021. Of those, 2,156 were freelancers, and 3,844 were non-freelancers.