I wrote the text at the end of this post in 2015. I thought it was time I updated it, because some things have changed since then – and some things haven’t.
First of all, to be clear, a “gig” refers to any transient or contingent work arrangement, such as freelancing, independent consulting, temporary work, and so on. It’s not just Uber drivers and Fiverr workers. Over 200 million people around the world now earn their income this way, either as a side-hustle or as their main source of income.
Research by Mastercard has shown that the digital gig economy (alone) generated $204 billion in gross volume in 2018. 58% was generated by transportation-based services (like Uber). Gig economy transactions are projected to reach $455 billion by 2023. At the current rate of growth, more than 50% of the US workforce will be freelancing by 2027. And the Guardian reports that the gig economy in the UK doubled in size between 2016 and 2019, and now comprises 4.7 million workers.
We’re seeing a huge shift from traditional, full-time employment to freelancing – and this is happening all over the world.
What Has Changed
- Technology has made it even easier to find freelance work
- COVID-19 has forced a lot of people to look elsewhere for their work and income, and many are turning to freelancing
What Has Stayed the Same
- Flexibility is still the main reason for freelancing
- Freelancing is still growing
The main concern for people considering freelancing is still the (perceived) lack of job security. That was never a strong argument, and with COVID-19, that argument doesn’t stack up at all any more. In fact, I think it’s easier to find freelance work than a regular job. According to MBO Partners, more than 50% of full-time freelancers feel more financially secure than those in traditional employment. Gig economy research by McKinsey shows that 78% of freelancers say they’re happier than those working traditional jobs, while 68% say they’re healthier. And those who freelance by choice are the most satisfied group within the workforce.
Are You Ready?
If all of that isn’t enough to make you consider freelancing, consider this: if current trends continue, freelancing will just keep growing, and could even overtake traditional jobs. Are you ready for that?
Think you don’t need to think about freelancing, or your place in the gig economy? Think again.
In 2015 almost one third of workers in Australia engaged in freelance work, according to this Upwork survey. That’s 4.1 million people, up from 3.7 million in 2014. In the U.K. there are 1.4 million freelancers (Professional Contractors Group estimate), up 14% in the past decade. Another report from Intuit predicts that over the next decade the number of contingent employees will increase worldwide. In the U.S. alone, contingent workers will exceed 40% of the workforce by 2020.
Importantly, traditional, full-time, full-benefit jobs will be harder to find. And according to a recent Brookings Institution report, the gig economy is growing at a rate 27% higher than that of full-time jobs.
So unless you’re planning to retire in the very near future, you will almost certainly be affected by the gig economy – whether you like it or not. The world of work is changing. Demand for freelancers will continue to increase, with startups and progressive companies embracing the new workforce, so even if you could find a ‘traditional’ job, would you want it?
This represents a major change in the way work is performed – a shift from having a job to working for clients. You need to be ready for the gig economy.
The most common question I get asked about making the switch to freelance consulting is “how do I manage all the non-consulting stuff?” And that makes sense, because consultants are used to consulting. In the freelance world, you need to do more than just consult. You need to treat your work as a business – doing the things your employer does now. That means marketing and sales, finding work, accounts (invoicing, cash flow management, taxes), project management, and so on.
That is what I’ll be covering in more detail over the next couple of months – how to manage all the non-consulting stuff, with the least amount of time and effort, so that you can focus on what you do best.
What do you find most challenging when it comes to freelancing? Let me know in the comments.