The freelance workforce is powerful and growing. According to a yearly study done by Upwork, in 2014, one in every three Americans (53 million workers, or 33% of the total U.S. workforce) had done freelance work within the past year. By 2018, that number rose to 56.7 million workers. A separate 2010 study by Intuit predicted that by 2020, that number will rise to 60 million, or 40% of workers.
These figures represent freelancers defined as independently employed individuals and do not include telecommuters or non-independent contracted businesses that provided a service or product to a business or organization.
To provide a frame of reference for the tremendous growth in the freelance industry, in 2005 there were only 10.3 million freelancers in the US. The demand for freelancers survived the economic crash of 2008, and while the mainstream workforce unemployment rate went up sharply, the income-earning freelancers in the workforce continued to rise.
It is important to clarify that these numbers did not climb simply due to more people being forced to freelance (and therefore, were simply unemployed individuals who called themselves freelancers) but counts those who actually earned some sort of income from freelance work.
Here are a few more impressive statistics:
- In Upwork's 2018 survey, 61% of respondents reported that they began freelancing by choice rather than out of necessity.
- 64% of freelancers reported finding their projects and clients online.
- 77% of full-time freelancers reported that their work-life balance is better thanks to the flexibility of their freelance careers.
Why Freelancers Are So In Demand
The main reason employers use freelancers and contractors for goods or services is money. Freelancers cost businesses less to retain than hiring a full-time employee, and, in most cases, freelancers do not get benefits such as insurance and paid leave. They can be hired on a job-by-job basis and let go without the risk of being hit with a wrongful termination lawsuit. Since freelancers are usually hired for a very specific task, they are already specialists in their fields and do not require training to complete the job.
Freelancers also help small businesses grow before they are fully ready to scale up, and can be let go if a company experiences budget problems without concern for severance pay or benefits payouts.
There are some exceptions regarding benefits if the freelancer is employed under a work for hire agreement or as an independent contractor. In some states, there are certain tests regarding the control a company has over a freelancer as to whether or not they are an independent contractor or a contractor.