Freelancing in America: A National Survey of the New Workforce

© Copyright 2014 Daniel J Edelman Inc.1

Intelligent Engagement

Freelancing in America Study

Results DeckSeptember 2014

For more details go to:https://www.freelancersunion.org/53Million

https://www.freelancersunion.org/53Million



Intelligent Engagement 2© Copyright 2014 Daniel J Edelman Inc.

• An online survey of 5,052 US adults who have done paid work in the past 12 months

• Data collected July 19 - July 31, 2014 by independent research firm Edelman Berland

• Results are weighted to ensure demographic representation in line with the United States Bureau of Labor Statistics 2013 Labor Force Statistics from the Current Population Survey

• Overall margin of error of ±1.38% at the 95% level of confidence

Research methodology

NON-FREELANCERS

Definition:- Individuals who earned

income through work but have not engaged in supplemental, temporary, project- or contract-based work, within the past 12 months.

Sample n=3,332

FREELANCERS

Definition:- Individuals who have

engaged in supplemental, temporary, project- or contract-based work, within the past 12 months.

Sample n=1,720


Freelancers Union and Elance-oDesk commissioned Edelman Berland, an independent research firm, to conduct a study of the freelance workforce within the US with the following objectives:

1. Quantify the number of people freelancing in the US and their economic impact

2. Assess the state of freelancing, especially current demand for freelance services

3. Gather insights into drivers and barriers impacting freelancing 4. Gauge the outlook for freelancing, especially among

millennials as they become the majority of our workforce

This results deck is organized in sections to detail results on each of these objectives.

Study objectives


1. Freelancing quantified

• There are 53 million people doing freelance work in the US – 34% of our national workforce

• People who freelance contribute an estimated $715 billion in freelance earnings to our economy.

2. The state of freelancing

• Freelancers see growing demand. Twice as many have seen an increase in demand in the past year as have seen a decrease (32% experienced an increase versus 15% who have seen a decrease).

Key findings (by objective)


3. Insights into barriers and drivers

• 80% of non-freelancers say they would be willing to do work outside their primary job to make more money.

• Earning extra money (but not financial necessity) and schedule flexibility are the top drivers of freelancing.

• Finding work and, correspondingly, income stability are the top barriers to doing more freelancing work.

• 69% of freelancers said technology has made it easier to find freelance work.

4. The outlook for freelancing

• 77% of freelancers say the best days are yet ahead for freelancing and 65% said freelancing as a career path is more respected today than it was three years ago.

• Millennials are freelancing more than any other age group. Over a third (38%) of Millennials are freelancers. They’re also most optimistic about freelancing – 82% say that the best days of freelancing are yet ahead.

• 36% of moonlighters who have a primary job have thought about quitting to work completely independently – this represents 5.1 million people.

Key findings (cont.)

© Copyright 2014 Daniel J Edelman Inc.Intelligent

Engagement 6

Quantifying the Freelance Workforce


• Our survey of over 5,000 U.S. workforce members rigorously screened respondents to determine the percent who earned freelance income in the past year. Results showed that 34% of the U.S. workforce is doing freelance activity.

• Based on the Bureau of Labor Statistics July 2014 estimate of the civilian labor force at 156 million, we estimate that the U.S. workforce currently includes 53 million people who are freelancing.

• A 2006 study by the U.S. Government Accountability Office found there were 42.6 million “contingent workers” – for nearly a decade that was the best guess we’ve had.

• These freelancers contribute an estimated $715 billion annually in freelance earnings to our economy.

There are 53 million people freelancing in the U.S.

http://www.bls.gov/news.release/pdf/empsit.pdf

http://www.bls.gov/news.release/pdf/empsit.pdf


The freelance workforce:5 freelancer segments

40%

27%18%

10%

5%Independent Contractors

Moonlighters

Diversified Workers

Temporary Workers

Freelance Business Owners

21.1M

14.3M9.3M

5.5M

2.8M


Starting with the general U.S. workforce, each respondent ran through a series of questions that carefully qualified their employment status and income in order to detect freelancing that might otherwise go unrecorded. The following definitions and examples explain 5 segments of freelancers captured:

1. Independent Contractors (40% of the independent workforce / 21.1 million professionals) – These “traditional” freelancers don't have an employer and instead do freelance, temporary, or supplemental work on a project-to-project basis.

2. Moonlighters (27% / 14.3 million) - Professionals with a primary, traditional job who also moonlight doing freelance work. For example, a corporate-employed web developer who does projects for non-profits in the evening.

3. Diversified Workers (18% / 9.3 million) – 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.

How did we quantify freelancers?


4. Temporary Workers (10% / 5.5 million) - Individuals with a single employer, client, job, or contract project where their employment status is temporary. For example, a business strategy consultant working for one startup client on a contract basis for a months-long project.

5. Freelance Business Owners (5% / 2.8 million) – These freelancers have between one and five 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.

In order to qualify, freelancers had to have earned freelance income within the past 12 months. The following slide demonstrates how freelancers were screened through the survey questionnaire.

How did we quantify freelancers? (cont.)


Freelancer Identification: Flowchart of screening questions


Engagement 12

The State of Freelancing: Detailing Increasing Demand


Nearly one-third of freelancers report increased demand for their services in the past year

Q44. In the past year, have you seen the demand for your freelance services change? n = 1,720

32%

53%

15%

In the past year, have you seen the demand for your free-lance services change?

Increased Demand No Change


Education matters: Tech education, college, and post-grad degrees see greater demand than freelancers with only high school or some college

Q43. How much demand is there for your freelance services? n = 1,720

Some High School or Less High School Graduate Vocational or Technical College

Graduated College Post-Graduate Degree

2% 4% 2% 3%

25% 19%15%

20% 12%

56% 59%60%

57%64%

17% 18%25% 21% 22%

How much demand is there for your freelance services?(by educational attainment)

None Very Little Some

Education

De

ma

nd


Experience matters: More experienced freelancers see the greatest demand

Q43. How much demand is there for your freelance services? n = 1,720

<6 months 6 months - 1 year

1-2 years 2-3 years 3-4 years 5-10 years 10-20 years 20+ years

8% 5% 1% 1% 3% 5%

22%18%

19% 23% 13%21%

19%20%

50% 60% 64% 57% 72% 58%55% 47%

21% 18% 17% 20%14% 19%

26% 28%

How much demand is there for your freelance services?(by length of experience as a freelancer)

None Very Little Some

Experience

De

ma

nd


2% 13% 19% 18%20%

57%50%

46%60%

58%

41% 37% 35%23% 19%

3%

How much demand is there for your freelance services?(freelancers by industry)

None Very little SomeIndustry

De

ma

nd

The STEM skills gap shows: Freelancers in STEM fields see greater demand than other industries

Q6. Please select the industry in which you currently work. n = 1,720Q43. How much demand is there for your freelance services? n = 1,720


Freelancers provide difficult-to-find skills

Q57. For each of the statements below, select the option that best describes your views on how the perception of freelancing as a career has changed compared to 3 years ago. n = 1,720

65%

7%

28%

Select the option that best describes your views on how the perception of freelancing as a career has changed compared to

3 years ago


Engagement 18

Insights into Freelancing Drivers and Barriers


Most non-freelancers are open to freelancing

Yes80%

No20%

Would you be willing to do additional work outside of your primary job if it was available and enabled you to make

more money?(Non-Freelancers)

Q21. Would you be willing to do additional work outside your primary job(s) if it was available and enabled you to make more money? n = 3,332


More than half of freelancers began freelancing by choice, not necessity

Choice53%

Necessity47%

Which is closer to the reason you originally started freelancing?

Q48. Which is closer to the reason you originally started freelancing? n = 1,720Q51. Please explain why you choose to freelance. n=868

“I had the degree and loved the work. Held down one career while building this one. Retired from first career and now, after 39 years, I only want to freelance part time and I do not know when I will give it up.”

“I put myself through college, investing on my own, so having enough money to live on was not a huge factor, so after a few years I decided that pursuing a writing career was a 'now or never' venture, and I've been doing it ever since.”

“I am very passionate about what I do, but I have a large family. This allows me to be both a stay home parent and have a small career. I like what I do, and I want to do it my way is another big reason.”

“I don't have to worry about losing my job. I don't have bosses dangling pink slips over my face and constantly threatening to fire me.”

“I am learning more effectively how to make money by several different sources so if one source slows down, I can rely on other sources instead of just an employment income.”


Earning extra money is the primary reason for freelancing, but schedule flexibility is also a top motivator

Q34. What are your personal motivations for freelancing? Please select all that apply. n = 1,720

68%

42%37%

33% 31% 30% 30% 29% 27%22%

Top 10 Personal Motivations for Freelancing


Fair compensation is important to all, but freelancers place greater importance on controlling their destiny, interesting work and flexibility, and less importance on high pay

Q22. How important to you are each of the following work characteristics. n = 5,052

78%73%

67% 66% 65% 64% 64% 63%59%

53%

81%

68%64%

61%57%

64%

71%

57% 55%52%

Importance of Work Characteristics(Freelancers vs Non-Freelancers – Very/Extremely Important)

Freelancers


Finding work and income stability arethe biggest barriers to freelancing more

More stable income from freelancing

Easier to find freelance work

A more reliable way to ensure you receive the pay you're due

Knowing which skills are in demand (so that you can offer them)

Better availability of affordable benefits

Less administrative work required (help with taxes, timekeeping, compliance, invoicing,

etc.)

None

Other

50%

47%

31%

23%

21%

13%

9%

2%

Q32. Which of the following factors would lead you to do more freelancing work? Please select up to three. n=1,344

Top Barriers to Freelancing More(Self-Identified Part-Time Freelancers and Moonlighters)


But technology is making it easier to find work

“There are more avenues available to find work, to make contacts, to connect with others, etc. thanks to technology and its

ability to network.”

“The world is a big place. The internet has made the world flat, essentially. There are

billions of people on this planet with access to everything by everyone. If you create

something that no one else creates, or you create it in a manner better than others, you

will succeed.”

“With the advent of the internet and social networks, you can contact and learn about

other companies and people faster than ever before.”

“10 years ago I would not as easily have gotten business from clients across the

country let alone across the world.”Q53_5. What do you think is different about the freelance job market today compared to 3 years ago? Please indicate your level of agreement with the following statements: Technology has made it easier to find freelance work

69%Agree that technology has

made it easier to find freelance work


More than two-thirds of freelancers also said social networking is changing the dynamics of networking

69%

23%

8%

What do you think is different about the freelance job market today com-pared to 3 years ago?

(Agree/Disagree - Social media is drastically changing the dynamics of networking)

Agree Neither Agree nor Disagree Disagree

Q53. What do you think is different about the freelance job market today compared to 3 years ago? n = 1,720


Two in five freelancers have worked online

Q59. Have you done a freelance project online – meaning work that you found and performed via the Internet? n = 1,720

No58%

Yes42%

Have you done a freelance project online – meaning work that you found and per-

formed via the Internet?


One in four find projects online in 24 hours; more than half (57%) find projects online in 3 days

Q59. Have you done a freelance project online – meaning work that you found and performed via the Internet? n = 1,720Q60. How long on average does it take you to find freelance projects that you look for online? (i.e. between looking for an opportunity and starting work of it) n = 714

Less than 24 hours 1-3 days 4-6 days 1-2 weeks 3-4 weeks

31%

26%

18%

11%

5%

How long on average does it take you to find freelance projects that you look for online?


Engagement 28

The Outlook for Freelancing


The majority of freelancers feel that respect has grown for freelancing as a career choice

Q57. Select the option that best describes your views on how the perception of freelancing as a career has changed compared to 3 years ago. n = 1,720

65%

7%

28%

Select the option that best describes your views on how the perception of freelancing as a career has changed compared to

3 years ago


More than one-third of freelancers expect to increase the amount of time they spend freelancing in the coming year

97% freelancers who consider the increase in hours a

good thing

Q45. In the coming year, how do you expect the total number of hours you

spend freelancing in a typical week to change? n = 1,720

Q25. How many hours in a typical week do you do freelance work? n = 1,720Increase Stay the same Decrease

38%

50%

12%

In the coming year, how do you expect the total number of hours you spend

freelancing in a typical week to change?


Additionally, nearly half expect their income from freelancing to increase in the coming year

Q42. In the coming year, how do you expect your income from freelancing to change? n = 1,720

Increase Stay the same Decrease

43%46%

11%

In the coming year, how do you expect your income from freelancing to change?


Most of us at traditional jobs probably have coworkers who are moonlighting…

16%Of all workers with a

primary employer have done work outside of their

main job in the past year to earn additional money

14.3MMoonlighters

Q11. Do you have an employer (i.e. company you work for)? If you are self-employed or freelance for clients, please select no. n= 5,052Q12. Do you have more than one employer, job, or contract project? n = 3,492Q13. Do you do any work outside of your primary position to supplement your income or earn additional money? n=2,898


One-third of moonlighters considered quitting their job – that would be 5.1M new independent professionals

5.1MPotential New Independent Contractors

Q37. Have you ever considered quitting your primary job in order to work completely independently? n = 464Q40. How likely are you to quit your primary job in the next two years in order to work entirely independently? n = 464

Have you considered quitting your job in order to work completely in-

dependently?

Yes36%

No64%

How likely are you to quit your pri-mary job in the next two years in order to work entirely indepen-

dently?

Somewhat/ Very

Likely33%

Not Very/Not at

All Likely67%


More millennials freelance than any other age group

Q2. What is your current age? n = 5,052

18-34 35-44 45-54 55+

62% 66% 69% 68%

38% 34% 31% 32%

Freelance Participation by Age

Non-Freelancers


Additionally, millennials are looking for fulfilling and exciting work more so than other generations

Q22. How important to you are each of the following work characteristics. n = 5,052

80%

71%69% 69%

64%62% 62% 62%

59% 59%

80%

67%69%

64%62%

65%

54%

47%

60% 58%

Importance of Work Characteristics(Millennials vs Adults 35+– Very/Extremely Important)

Adults 18-34 Adults 35+


And millennials are most optimistic about the future of the freelance job market

Q56. How do you see the future of the freelancing job market? n = 1,720

Best days are ahead Best days are behind

82%

18%

74%

26%

How do you see the future of the freelancing job market?(Millennials vs Adults 35+)

Adults 18-34 Adults 35+


Engagement 37

Appendix


Freelancers Union

Freelancers Union’s 250,000 members believe all workers should have the freedom to build meaningful, connected, and independent lives – backed by a system of mutual and public support. More than one in three working Americans is an independent worker. That's 53 million people – and growing. They are lawyers and nannies, graphic designers and temps. Freelancers Union serves the needs of this growing independent sector.

Elance-oDesk

Elance-oDesk is the world’s largest online workplace. More than 2.5 million businesses and 8 million freelancers tap into www.Elance.com and www.oDesk.com to work together via the Internet. As our increasingly connected and independent workforce goes online, talent—like software, shopping and communications before it—is shifting to the cloud. This shift is freeing professionals from set-time-and-place work, while also making it faster and easier for businesses to hire. Elance-oDesk is headquartered in Mountain View, California, with offices in San Francisco, California, and Oslo, Norway.

For more details, go to https://www.freelancersunion.org/53Million

This study commissioned by:

http://www.elance-odesk.com/

https://www.elance.com/

https://www.odesk.com/




Career

Freelancing in America: A National Survey of the New Workforce