At Transitions to Freedom, we monitor and evaluate technological, social, and economic trends. Our goal is to spot opportunities for greater personal and financial freedom, and to tell anyone that will listen what we’re seeing.
The rate of change in nearly every sector we monitor is increasing. That makes is hard to peer very far into the future, because rapid changes leave an element of chaos in their wake.
Nonetheless, some trends are emerging so distinctly that their trajectories appear to be clear. The new reliance on outsourced labor is one of those trends.
According to Score.org, freelancers now make up a whopping 34% of the US work force, which accounts for some 54 million people. There are many reasons for this, some of them are good.
The good reasons are that flexible work schedules and work-from-anywhere lifestyles are giving people more freedom than ever to choose how and where they work. The ability to compete and set prices also appeals to many freelancers.
The bulk of freelancers are millennials. They credit social media and internet connectedness for the rise in freelance opportunities.
According to MBO Partners, the number of young freelancers has grown 1.9 million in 2011 to about 5.4 million in 2015, an increase of nearly 300%. That’s a steep trend.
Other demographics are rapidly joining the ranks of freelancers as well. The growth of this industry suggests a few underlying trends:
- The days of a “golden handcuffs,” pension and benefit plans that become more valuable the longer your tenure with an employer, are over. Thanks to changes in regulations, including the cynically named “Affordable Care Act”, employers are reducing their costs by outsourcing.
- Loyalty between employers and employees, if it ever existed, is gone. Disney’s recent decision to layoff a few hundred employees who were expected to train their cheaper immigrant replacements is but one example that many employers place their bottom line far above their human resources. The message to employees is clear: if you don’t place your own bottom line above loyalty to your employer, you may find yourself with no line at all.
- The skills and educational requirements that are in demand are in flux. Your ability to stay current and development new skills as the market demands them is an important part of maintaining and expanding your earning potential. This means investing time in yourself, which can include taking courses, reading, and networking. Massive Open Online Courses (MOOCs) like Udemy and iTunesU are trending. These sites may well be the future of higher education.
Successful freelancers have some pressures that employees don’t, including the burden of a much more complicated income tax reporting requirements. It can also be challenging to keep a steady work load, especially as you’re starting out.
But the overall level of satisfaction that freelancers have in their work and lifestyles is considerably higher than it is for employees. Couple this with the fact that your income is not fixed, but can be increased when you have specific needs by accepting more jobs or adding skill sets, and it’s easy to see why freelancers tend to be very satisfied with their work.
If you haven’t considered freelancing, give it a hard look this week. It’s not a passive income, which should be your highest goal, but freelancing does offer much more flexibility than a 9 to 5 routine.