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New Upwork Study Finds 36% of the U.S. Workforce Freelance Amid the COVID-19 Pandemic

New Upwork Study Finds 36% of the U.S. Workforce Freelance Amid the COVID-19 Pandemic

COVID-19 pandemic drives influx of young, highly-skilled, first time freelancers seeking alternate career opportunities  

SANTA CLARA, Calif. - September 15, 2020- Upwork (UPWK), the leading online talent solution, today released the results of “Freelance Forward: 2020”, the most comprehensive study of the U.S. independent workforce, which found that a significant number of Americans freelanced even amid the COVID-19 pandemic, contributing $1.2 trillion to the economy. This increase was fueled in part by an influx of younger, highly-skilled professionals seeking flexible alternatives to traditional employment.

Upwork’s seventh annual study surveyed more than 6,000 U.S. workers over the age of 18 and found that 59 million Americans performed freelance work in the past 12 months, representing 36% of the U.S. workforce, an increase of 2 million freelancers since 2019.

This year’s research revealed how the COVID-19 pandemic has impacted the composition and demographics of the freelance workforce. For the full study results, view the deck here and to view analysis by Upwork’s Chief Economist Adam Ozimek, read his report here

Key findings reveal:

  • Amid a global recession, the freelance workforce remains an essential pillar of the U.S. economy: Freelancers contributed $1.2 trillion dollars to the U.S. economy in annual earnings – a 22% increase since 2019.
  • More professionals are freelancing full-time: The share of independent professionals  who earn a living freelancing full time has increased 8 percentage points to 36% since 2019. 
  • Freelancing increases earning potential: Of those who quit their full-time job in order to freelance, 75% say they earn the same or more in pay than when they had a traditional employer.
  • Young adults are turning to freelancing for economic opportunity: Amid a tough job market for recent college graduates, half of the Gen Z workforce (age 18-22) have freelanced in the past year, and of those, more than a third (36%) started since the onset of COVID-19.
  • Freelancers are increasingly high-skilled: 50% of freelancers provide skilled services such as computer programming, marketing, IT, and business consulting, up from 45% in 2019. 
  • Professionals are likely to consider freelance work in the future: 58% of non-freelancers who are new to remote work due to the pandemic are now considering freelancing in the future.

“It’s no surprise that freelancing is on the rise, especially now that we have fully disentangled ‘where’ we work from ‘what’ we work on,” said Hayden Brown, President and CEO of Upwork. “Amid all of the uncertainty brought about by COVID-19, the data shows that independent professionals are benefiting from income diversification, schedule flexibility, and increased productivity. At the same time, companies are finding that these professionals can quickly inject new skills and capabilities into an organization and strategically flex capacity up and down along with changes in demand and workloads. We expect this trend to continue as companies increasingly rely on freelancers as essential contributors to their own operations.”

"Amidst the economic challenges in 2020, freelancing continues to be an important part of the economy," said Adam Ozimek, Upwork Chief Economist. "To adapt to the changes and uncertainty of COVID-19, we saw many professionals enter the freelance workforce for the first time. At the same time, the shift towards greater workforce flexibility coupled with the necessity to maintain continuity brought new demand for independent professionals from businesses. The changing dynamics to the workforce that has occurred during the crisis demonstrate the value that freelancing provides to both businesses and workers.”

Additional findings include:

Freelancing Increases Opportunities

  • For those age 55+, freelancing helps to address financial needs as they grow older. 65% of Boomers who freelance say that independent work is a good way to transition into retirement.
  • Among the 48% of freelancers who are caregivers, more than two-thirds say that freelancing provides them an alternative that can allow one to support a family without a traditional job.
  • Two-thirds of non-freelancers say they would consider freelancing as a career option to take care of a family member.

The State of the Freelance Workforce

  • The composition of the freelance workforce is getting younger: 50% of Gen Z workers (age 18-22), 44% of Millennials (age 23-38), 30% of Gen X (age 39-54), and 26% of Boomers (age 55+) freelanced.
  • 58% of freelancers have had more than 5 clients in the past 6 months, up 3 percentage points from 2019.

The Changing Freelance Workforce Due to COVID-19

  • Despite the overall increase in freelancing, COVID-19 has impacted all areas of the economy and as result, 10% of the US workforce has paused freelancing. These freelancers were typically working in occupations most impacted by social distancing and were in non-remote working situations. Of those that paused:
  • 88% say they are likely to return to freelancing in the future.
  • Conversely, 12% of the US workforce began freelancing during the pandemic for the first time. Of those that started:
  • 48% already see it as both a full time and long-term career opportunity
  • 60% say that there is no amount of money that would convince them to take a traditional job
  • 67% of full-time freelancers say that freelancing has prepared them to cope with the uncertainty of the coronavirus pandemic better than those in traditional jobs.
  • 65% of skilled freelancers say their hours have either stayed the same or increased since the pandemic hit.

Freelancers’ Perspectives on Skills and Training

  • 59% of freelancers have participated in skills training in the last 6 months vs. 36% of non-freelancers.
  • 54% of freelancers say soft skills like communication and people skills are very important to their work.
  • Although 81% of freelancers say their college education is useful to the work they do now, of those with a 4-year college education, 65% wish they had instead obtained a 2-year degree and supplemented their education with online training.

The Future of Freelancing

  • Non-freelancers new to remote work say they are considering freelancing in the future because it has made them a more productive worker (73%), they'd prefer working remotely over returning to a traditional office (74%), and to earn extra income to cope with the impact of the pandemic on their personal finances (85%).
  • 86% of freelancers say that the best days are ahead for freelancing.
  • 71% of freelancers say perceptions of freelancing as a career are becoming more positive.

About Freelance Forward: 2020

To see further insights, please visit https://www.upwork.com/i/freelance-forward for access to the full results deck and other materials. The study is conducted by independent research firm Edelman Intelligence. 6,001 U.S. working adults over the age of 18 were surveyed for it online between June 15, 2020 – July 7, 2020. Of those, 2,132 were freelancers and 3,869 were non-freelancers. Results were weighted to ensure demographic representation in line with the United States Bureau of Labor Statistics’ 2019 Labor Force Statistics from the Current Population Survey and the American Community Survey. The study has an overall margin of error of ±1.2% at the 95% level of confidence.

About Upwork

Upwork is the leading online talent solution transforming traditional staffing. We empower businesses with more flexible access to quality talent, on demand. Through Upwork’s matching technology and services, companies have access to a global pool of proven professionals so they can scale their teams dynamically to meet business needs. Upwork also provides skilled professionals access to more opportunities. 

Upwork’s mission is to create economic opportunities so people have better lives. The community of independent professionals working via Upwork spans many categories including software development, creative & design, finance & accounting, consulting, operations, and customer support—over 8,000 skills are represented.

More than thirty percent of the Fortune 500 use Upwork. Clients include Airbnb, Automattic, BISSELL, GE, and Microsoft. 

Upwork is headquartered in Santa Clara, Calif., with an office in Chicago as well as team members in more than 800 cities worldwide. For more information, visit Upwork’s website at www.upwork.com and join us on LinkedIn, Twitter, and Facebook.