Whether you call it the Freelance Economy, the Gig Economy or the Sharing Economy, the statistics keep piling up as users and businesses embrace the services of temporary contractors over traditional services or salaried workers. This chart tells the story quite succinctly; it shows the growing marketplace for independent work.
The latest report from Spera reveals that previously trending gains are continuing. As they have parsed the data, some of the emergent facts may be surprising.
In the U.S., the freelance economy has been heating up for steadily for years.
- In 2015, nearly 54 million Americans participated in some form of independent work. Spera says this represents over 33 percent of the entire U.S. workforce, and an increase of 700,000 workers year over year.
- Within the next three to five years, about half of the working U.S. population will be taking part in the gig economy for at least some part of their income.
- Over 10 million people -- or about 1 in 12 households — do independent work for more than half of their income.
The Freelance Economy is a worldwide phenomenon.
- Spera cites some estimates that half of workers in the United Kingdom will be self employed within the next five years.
- Within the European Union, there was a 45 percent increase in the number of independent workers from 2012 to 2013.
- Independent workers are the fastest growing labor category in the European Union.
- India’s independent workforce is the second largest in the world at 15 million. These workers fill about 40 percent of the world’s freelance jobs.
Economic Impact of the Freelance Workforce
It's not just the size of the independent workforce that's growing; so is its force in the economy.
Millennials in the Freelance Economy
Although all age groups work in the Freelance Economy, Millennials make up the largest share.
- 2015 was the watershed year in which Millennials became the largest age cohort in the entire workforce, freelance or otherwise.
- More than a third of Millennials are already employed as independent workers.
- 32 percent of Millennials expect to be be working “mainly flexible hours” in the future.
Technology as the Driving Force
Proliferating technologies, devices and channels have enabled the Freelance Economy like never before.
Many people work solely through their mobile devices. Social media connects in new ways and new flavors every day. And online hiring platforms make finding work easier.
- 87 percent of Millennials keep their phones with them at all times, night and day.
- Nearly half (45 percent) use personal smartphones for work .For older generations, that figure is closer to 18 percent.
- 41 percent of workers download applications to use for work purposes.
- 80 percent of workers in the freelance economy use social media as a means of finding work.
Challenges for Freelancers
Some are calling it the “freedom economy,” As appealing as that sounds, there are ancillary needs for marketing, cash flow, business management and healthcare costs.
- 63 percent of those interviewed in Spera's report said marketing was their most significant expense in growing their business.
- 57 percent of freelancers reported experiencing cash flow issues at times during the year.
- 64 percent of freelancers use some form of project management software.
- 70 percent of freelance workers use software to track finances.
- The median income for surveyed freelancers working part time in 2015 was between $10,001 and $20,000.
One problem with surveys of freelancers is that the jobs they perform can encompass a lot of both skilled and unskilled talent. The statistics on median income may be skewed by respondents who work very part time, or in low-skilled endeavors such as one-off errand-type jobs on Fiverr.
Whereas if you surveyed only contract workers with advanced degrees needed for finance or strategy jobs such as the ones we list at Graphite, the part time income figure would be far higher. It all depends on the company you keep.