How freelancing enables more individuals to take control of their careers
By Upwork’s Chief Economist, Dr. Adam Ozimek
To read stories and insights from Upwork freelancers, check out https://www.upwork.com/research/flexibility-through-freelancing.
Introduction
In recent years, discussions around freelancing have been narrowly focused on a single assumption, that freelancing serves as merely a substitute for so-called “traditional” jobs. The presumption, taken to its extreme, is that everyone would rather have a full-time, 9-to-5 job. At Upwork, however, we know that this criticism fails to grasp the unique value that freelancing provides for those who choose to work this way.
In this analysis, we use a variety of surveys to demonstrate how and why freelancing enables people to take control of their careers in a way that a “traditional” job cannot and what this means for the broader economy. To understand the value, this analysis specifically focuses on the high rates of freelancing among those who have disabilities, have someone with a disability in their household, or are caretakers. While the median worker remains well-served by the “traditional” jobs, this is not true for a significant share of individuals. For some, freelancing is how they want to work, and for others, it is how they need to work. Because of this desire and necessity, this analysis strongly suggests that freelancing expands opportunities for work and increases the overall size of the economy.
Key Findings:
Flexibility and Control
To appreciate the true value that freelancing can offer, it’s important to understand the nature of freelancing and how it’s different from a traditional job. Traditional employment is highly zero or one, meaning you have a job or you don’t. How often you work at that job, in turn, is subject to negotiation with that singular employer, and is dictated by the employers’ business needs. Freelancing, in contrast, allows for far more control over one’s workflow and is not constrained or dictated by the needs of a single business. If a freelancer wants more work, they can take on more projects and clients and if they want less, they can wind down projects and reduce their workload. This provides professionals with a greater ability to determine their workload and schedule based on what their life circumstances allow.
Upwork’s Freelance Forward survey data shows that independent professionals select their number of clients based on desired workload. On average, full-time freelancers have ten clients in a given six month period, and freelancers overall have six. In contrast, traditional employment involves one client, the employer, with whom one must negotiate directly on a specific level of work.
In addition to the number of clients, we also see that there is much higher variation in typical working hours than traditional employees. The standard deviation of typical hours for a freelancer is 18% higher than non-freelancers, meaning that freelancers’ schedules are more likely to look different than a typical 9-5. These trends are also clear in BLS data, where 79.3% of self-employed workers have flexible hours, compared to 31.5% for all other workers.
Furthermore, flexibility and control are not just about how much you work, but when you work. When it comes to determining which hours of the day and which days of the week to work, freelancing also provides a level of freedom that traditional employment would struggle to replicate. While a freelancer may have a timeline for completion and scheduled check-ins with the client, beyond that, they often have complete control over which hours of the day they work. In contrast, even when traditional employment relationships have flexibility, hours will almost always need to be scheduled in advance and are subject to negotiation with management. Flexibility is constrained by the needs of the employer.
Freelancers, in contrast, can often determine when they work without asking what hours are available and without planning with managers in advance. We see that this is a common choice for many independent professionals, because among full-time freelancers 35% work less than daily.
The BLS found that 79.1% of independent contractors prefer that way of working over traditional jobs, while only 8.8% would prefer a traditional job. Additionally, data from an experimental survey on job applicants for a national call center, Mas and Pallais estimate that while the median worker prefers a 9-to-5, 25% of workers were willing to give up 10% of their wage or more in exchange for flexibility in when they work. In addition, 25% of workers are willing to give up 7% to have control over how many hours they work. They were willing to give up 14% to work from home as well. Altogether, for a job that has flexible schedules, flexible hours, and is remote, one quarter of workers are willing to give up 15% of their pay combined.
Why Flexibility and Control Matter
It is clear that freelancing allows for greater control and autonomy, but it is important to recognize why this is valuable to professionals.
To understand the benefit, Freelance Forward asks professionals about the reasons why they freelance. We found that flexibility in their schedule (i.e., what days or times they work), was the second most cited reason for why professionals freelanced. Among full-time freelancers, 48% indicated it was a major reason, and another 27% ranked it four out of five for importance.
Beyond ranking it as important, the reason why flexibility matters is even more telling: for many, their lives require flexibility in order to work. In fact, 50% of freelancers said because of personal circumstances they could not work for a traditional employer, but freelancing gives them the flexibility they need.
There are two major categories of personal circumstances that our data and other’s reveal a greater need for flexibility: disability and caregiving. 76% report that freelancing gives them flexibility needed as a caregiver for their family, and 66% report it gives them flexibility needed for personal mental or physical health needs.
Digging in deeper, we can see that there are a variety of challenges and circumstances that individuals face that fall into these two broad categories. Reasons that individuals gave for why they needed the flexibility of freelancing include hearing impaired, visually impaired, physical disability, learning or intellectual disability, children at home, chronic illness, aging needs, and terminal illness.
A separate survey of 2,817 freelancers who use Upwork also shows high rates of caregiving to children, other family members, and health issues. Altogether, nearly a third of U.S. freelancers have caregiving responsibilities or health issues.
These results are not unique to Upwork data. Looking at Census data, we can see that individuals with disabilities are much more likely to report that they are self-employed.
The connection between these personal circumstances and the need for flexibility and control is clear. For example, an individual with a chronic illness may not know on any given day when they will feel able to work. Chronic illnesses can prove incapacitating and unpredictable, but they do not mean that an individual cannot or does not want to work. It would be difficult to find a traditional employment position where one could show up or not show up without notice on a given day. Freelancing in contrast allows exactly this.
Childcare needs can provide a similar challenge to traditional employment. A parent may have the ability to work some days, but availability varies and is circumstantial to shifting parental responsibilities, sometimes at the last minute.
Remote Freelancing
An additional value of freelancing is that it is disproportionately remote. While remote work has increased rapidly as businesses and individuals adapt to the social distancing rules of the COVID pandemic, freelancers have always been more remote. In 2019, 30% of freelancers did most or all of their work remotely compared to 9% for non-freelancers.
While freelancing provides flexibility in how much and when to work, remote work provides flexibility in where to work. This is useful for those who have disabilities and caretaking needs as well. For those with disabilities, being remote means a lack of commuting. Ambulatory and vision disabilities can make commuting anywhere from difficult to impossible. Being able to work from home reduces the daily stress and difficulty for them. For those with childcare needs, being able to work remote means less time commuting and more time to spend with the family.
When remote work and freelancing combine, the opportunities expand even more for professionals.
The Value of Flexibility to the Economy
The importance of freelancing on an individual level is clear, but at a macro level, freelancing is also important for the economy. The fact that 50% of freelancers say they have flexibility needs that would prevent them from taking a traditional job illustrates the value. In the absence of freelancing, much of the work that these individuals do could not be replaced by traditional employment. It simply would not be done. As a result, freelancing grows the economic pie by creating opportunity.
Although not everyone desires or needs the flexibility that freelancing provides, the research shows that for a subsect of the population it is essential. The labor market should provide opportunities for everyone who wants to work, not everyone who can or wants to work only a 9-to-5 onsite job. People are greatly varied in their needs and abilities and a labor market should accommodate more unique needs in order to spread opportunity more widely. Freelancing is an important tool that allows many professionals the ability to take control of their careers and find success.
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