According to a new report from Upwork, nearly 60 million Americans contributed $1.35 trillion annually to the U.S. economy by freelancing in 2022—a $50 billion increase over 2021. The freelance site said this represented 39% of its workforce, up 3% from 2021.
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In terms of specific business, more than half of freelancers provide information services: According to the report, 51% of all freelancers, or about 31 million professionals, provided information services such as computer programming, marketing, IT and business consulting in 2022.
What factors are driving this increase in freelancing?
In light of new job perceptions and silence due to economic uncertainty and the Great Resignation, many professionals are reevaluating their careers.
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The Great Resignation was sparked by the start of a new business during the COVID-19 pandemic, with some professionals leaving their jobs in search of a more flexible and fulfilling job, others prioritizing a greater balance between work and life, and even more exploring their entrepreneurial side. subsidiary businesses.
Whatever the cause, Upwork said the COVID-19 pandemic has given professionals a different perspective on work and career, leading many to pursue freelancing.
“Freelancing continues to gain popularity among talented professionals as more people evaluate their priorities and values in the business environment,” said Margaret Lilani, Upwork’s vice president of talent solutions. “The 9-to-5, in-office, single employer model is no longer what all people want. Instead, freelancing allows professionals to build meaningful careers with the jobs and clients they choose, and many are taking advantage of this opportunity.”
More positive perception of freelancing
Also, perceptions of freelancing have changed — According to Upwork, nearly three-quarters (73%) of freelancers reported that freelancing as a career has become more positive (from 68% in 2021).
Gen Z and millennials are the most likely to discover freelancing: 43% of all Gen Z professionals and 46% of all millennials were freelancing in 2022.
Greater diversification across employee income streams
There has also been an increase in professionals seeking alternatives to a single employer and diversifying their income streams. More people in the labor market are diversifying their incomes than ever before: In 2022, 37% of all US professionals had more than one employer, job or contracted project.
Diversified workers are those who seek multiple sources of income from a particular mix of traditional employment and self-employment. According to the report, this segment reached 17% of the US workforce, up 3% from 2021.
The report also highlights a sharp increase among freelancers with graduate degrees. In 2022, more than one in four (26%) freelancers hold a master’s degree, up from one in five last year.
The report noted that while financial gain is the primary motivator for freelancing, flexibility and seeking a better sense of purpose in their careers are other driving factors. When asked about the reasons for self-employment, respondents cited the ability to earn extra money (83%) and having flexibility in their schedule (73%) as the top reasons.
Higher overall job satisfaction
The report revealed that freelancers are more satisfied with all areas of work compared to non-freelancers. For example, 77% of respondents mentioned overall job satisfaction, compared to 70% of non-freelancers; 71% of freelancers said they were satisfied with their work-life balance, compared to 65% of freelancers, and 74% of freelancers said they were satisfied with their work environment, compared to 67% of freelancers.
Remote work was more accepted during the pandemic, with 81% of self-employed respondents saying they’re exploring freelancing as a way to take control of their careers, according to the report.
According to the Upwork report, mental health and well-being are other important reasons why people choose to freelance. Seventy-three percent of respondents said self-employment provides the opportunity to meet their personal, mental or physical health needs, while 69% said they have a healthy work-life balance and 57% said their overall health has improved since they started self-employment.
Expect freelancing to continue amid economic uncertainty
Despite a common misconception that a full-time job is the most stable career option, freelancers seem a little more optimistic even during the economic slowdown, according to the report.
When asked about the economic downturn over the next few years, three-quarters of all professionals (75%) said they were worried. Freelancers were not exempt from this, but many said they felt optimistic about the future despite the concerns. Overall, 69% of freelance respondents expect their income to increase in the next year, according to the report.
“This optimism may be due to the fact that 68% of freelancers have more than one employer, job or contracted project,” the report states. “With this diversity of income, there is less trust in a single employer than those who feel a full-time job. Similarly, freelancers see more opportunities available.”
What tech leaders need to know about hiring freelancers
TechRepublic Premium’s contract work policy is important if your company hires a contractor. Also, read these tips on how to hire the best freelancers for your company.