Today Upwork released its third annual “Freelancing in America” survey results, co-sponsored with Freelancers Union and conducted by research firm Edelman Berland. The survey utilized the same methodology in 2014, 2015, and 2016, thus allowing for some trend information. The survey, which has been the basis of a range of different findings on freelancing and freelancers, indicates that that there has been a (possibly accelerating) trend in the number of people who have done some type of paid freelancing over a prior 12-month period as of July 2014, 2015, and 2016.
In our coverage here, we will focus less on attitudinal findings (which can be reviewed in detail in the report) and more on the freelancer population and participation statistics. Here are some of the key findings:
First, based on the survey, the number of people over 18 years old who have done some sort of freelancing in the previous 12 months of each survey increased from 53M in 2014 to 55M in 2016 (an increase of 2M people freelancing or an increase of nearly 4%).
Most of that increase (1.3M) occurred between 2015 and 2016 (hence, a possibly accelerating upward trend).
It is notable that while the estimated freelancer population grew by about 4% from 2014 to 2016, the US civilian labor workforce grew by only 2%. In effect, this says that the freelancer population has grown at about twice the rate of the total aggregate workforce.
The study breaks down the freelancer population into five categories:
Examining growth rates among the different segments, positive growth has only occurred in two of the segments: “Diversified Workers” and “Freelance Business Owners”:
|Segment||2014-‘16 % increase||Segment Definition|
|Diversified Workers||10%||People with multiple sources of income from a mix of traditional employers and freelance work. For example, someone who works the front desk at a dentist’s office 20 hours a week and fills out the rest of his income driving for Uber and doing freelance writing.|
|Freelance Business Owners||2%||These freelancers have one or more employees and consider themselves both a freelancer and a business owner. For example, a social marketing guru who hires a team of other social marketers to build a small agency, but still identifies as a freelancer.|
It is not clear why the data indicate there have been decreases in some of the other categories (particularly temporary workers). But it is interesting—and full of implications—that the Diversified Worker segment has been the fastest growing, perhaps reflecting the high growth in the gig/on-demand platform segment and the increase in people wanting to or needing to piece together multiple sources of income.
So what does this mean for contingent workforce managers?
One of the key points of interest is whether there is growth in the non-agency temp contingent workforce. From this data, it’s not that clear. Traditional independent contractor populations are shown as declining. And while the Diversified Worker segment is shown as increasing, it’s not clear how this population aligns to enterprise needs for talent and contingent labor. To understand this, it would be necessary to go down a level and look at skills, etc. and see which categories might be growing or declining.
All that said, the survey report does tell us that (1) the number of people doing some sort of “freelancing” is a big number (55M) and (2) some segments of that freelancer population are increasing. Moreover, it appears that within this population, people are increasingly freelancing by choice, technology is an enabler and, further, that the upside is freedom and flexibility, while the main downside is predictability of income. Here again, it would be important to dig deeper and look at differences across sub-categories.
The common wisdom these days is that there is a trend toward more freelancing, independent workers, micro-businesses — if we do dig deeper, we believe we’ll likely find pockets and sources of talent and labor that are growing and of value to enterprises.