Freelance workers have become increasingly common in today’s economy. For decades, most people worked full-time jobs and remained loyal to one company throughout their careers. However, the optimistic notions of job stability and security are long gone.
Many employers don’t offer pensions or other retirement plans anymore. Not to mention, fierce competition makes it more difficult to get promoted within a company. Without a solid future in a company, many employees don’t see much incentive to stick around.
What Does Freelancing Look Like Today?
Instead of full-time jobs, some workers have opted for freelance or temporary employment. According to McKinsey’s American Opportunity Survey (AOS), around 36% of respondents identified as independent workers. That equates to 58 million Americans when taking estimates from the representative sample.
More Americans perform freelance work today compared to 2016 when just 27% of employed people did independent work. Freelance employees work various jobs, including food delivery, creative writing, computer programming, content creation, and more. They’re self-employed and offer their services to companies as independent contractors. Rather than collecting a paycheck, they usually perform jobs per task.
In the survey, researchers counted all contract, freelance, temporary, or gig workers as independent workers. Some respondents held full-time jobs but also performed gig or freelance tasks on the side.
The survey included 25,062 Americans, of which 5,280 identified as independent workers. Researchers made an interesting observation about this group of employees. They found that freelance workers were more optimistic about the future and economy than traditional-employment workers.
Over a third of independent contractors said they anticipate having more economic opportunities in one year. However, just a fifth of all respondents had a similar opinion. In addition, over 40% of freelance workers said that they believe endless economic growth will be a reality in five years. Only one-third of all respondents said the same.
How Freelance Workers Contribute to Society
In light of freelance workers’ challenges, their resilience is surprising and inspiring. Many have difficulties acquiring basic needs like affordable housing, healthcare, and nutritious food. 54% felt worried about job security in the future, compared to 35% of full-time workers. Nonetheless, more people seem optimistic about taking their chances with freelance work than ever. Luckily, this type of employment offers plenty of benefits to society overall.
The 2022 AOS survey data suggests that Americans’ attitudes toward work have shifted dramatically in the past few years. Many no longer wanted to feel trapped in traditional employment, as evidenced by the rise in independent employees since 2016. The total percentage of freelance workers includes permanently employed people with a side hustle. However, 72% of respondents reported having only one contract or independent job.
The rise in freelance workers allows companies to hire additional employees on an as-needed basis. For instance, when peak demand increases during the holiday season, many retailers employ temporary or seasonal help. Then, they keep a smaller core team around when market conditions return to normal. Freelance workers benefit smaller companies or startups that may not have the resources to hire them full-time. Research shows that freelance labor significantly lowers costs and removes obstacles to starting a business.
Several factors may have contributed to the increase in contract workers recently. The advent of digital platforms such as Uber, Favor, and Upwork provided more flexible employment opportunities for workers. The digital revolution helped remove the rigidity of traditional careers and allowed people more independence. Instead of being tied to one employer, people can now choose from thousands of freelance jobs.
Also, some people had to take any job they could find due to pandemic layoffs. If they couldn’t find permanent employment at another company, temporary or contract work may have been their only option. Or, perhaps, they had a full-time job but needed additional funds because of inflation.
Why People Choose Independent Work
Survey respondents listed a variety of reasons for choosing freelance work:
- Just over 25% of respondents said they worked independently out of necessity to support their families. That represents a dramatic increase from 14% of respondents taking on independent work for the same reason in 2016.
- About 20% of workers said they looked for gigs or freelance work to add discretionary income to their budgets. Around 40% of workers in 2016 cited this reason for engaging in contract work.
- Meanwhile, 25% of independently employed people said they pursued this type of work for enjoyment. Most high earners, or those making above $150,000 annually, responded.
- Finally, about 25% of workers looked for a gig or temporary work because of its flexibility. This response included full-time workers who can work remotely one or more days per week.
The survey also revealed that freelance workers score the highest on the McKinsey Economic Opportunity Index. This scale measures Americans’ opinions on past, present, and future economic opportunities. On a scale from 0 to 200, independently employed people scored 114 compared to 103 for all employed respondents.
Optimism scores were highest for employees engaged in freelance work because of enjoyment or autonomy. Those who performed the work for extra discretionary income reported being the least optimistic.
Many companies have responded positively to workers’ desire for flexible employment. A recent workforce trends survey revealed that about 58% of employees could work remotely at least once weekly. During the pandemic, many businesses had to close their doors to keep the virus from spreading among employees. So, working from home became a necessity rather than a choice, but it seems that trend will continue post-pandemic.
Final Thoughts on Americans Embracing the Gig Economy
Around 36% of workers currently engage in the gig economy, making it a sizable portion of today’s workforce. Workers cited several reasons for choosing this type of work, whether out of necessity or to earn extra income. Some also enjoyed doing freelance work, and others wanted more flexibility in their schedules. Since more people value autonomy in their jobs, companies should consider hiring these optimistic freelance employees in the future.
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