They call it the gig economy and its becoming increasingly commonplace; but what exactly is the gig economy? It’s an environment where temporary positions are common and organizations contract with independent workers for short-term engagements.
It’s an economy that 40% of the American workforce will belong to in 2020, according to Intuit. The factors for this shift include digitization, the rise of Millennials in the workforce, a greater work-life balance, and people changing jobs multiple times during their careers.
ReportLinker decided to examine this shift and what it means for freelancers.
ReportLinker asked survey respondents to describe their current working situation. Only 12% of the workforce freelances. The rest work either full, or part time.
When asked how likely they were to freelance at some point during their careers, 68% said it was unlikely. Of the 32% who said it was likely, 47% planned to do so in the next 36 months, when others planned to make the switch in three to five years or said they would become freelancers in more than five years.
Why does freelancing appeal to professionals? The response depends on whether someone is part of the gig economy or is currently an employee.
For those who work for employers, the top reason was to achieve a better work-life balance, followed by the need for freedom and to make better use of job skills, 11%. Those who felt their jobs were unstable were more likely to have an interest in freelance work.
Freelancers listed much different reasons. For this group, the top reason was being their own boss, flexible work hours and better compensation.
Age also played a role in responses. Employees between the ages of 35 and 54 were more likely to consider freelancing. In fact, the majority of freelancers, two-thirds, branched out on their own after learning professional skills in a traditional workplace.
Only a third of Millennials, who have yet to enter the workforce, said they were interested in freelancing, and of those who were interested, 36% felt it had the potential to make them unhappy.
Gender also swayed people’s opinions. Forty percent of men said they liked the option to freelance.
Drawbacks to Freelance Work
As any independent contractor knows, being a member of the gig economy comes with drawbacks.
ReportLinker asked what people disliked the most about freelancing. The top reason cited was the lack of retirement and unemployment benefits and no job security.
These reasons might be what scares a number of people from becoming a freelancer.
Job satisfaction means a lot to Americans and having a purpose in their work, appealed to 73% of survey respondents. Part-time employees were the group most likely to feel unsatisfied as 27% said they somewhat disagreed their job had purpose. Consequently, those who felt dissatisfaction were more likely to enter the gig economy.
Freelancers Are Happier?
ReportLinker sought to learn whether freelancers are happier than their traditionally employed counterparts and the majority of survey respondents, 70%, said they were happy, including 38% of freelancers.
Freelancers may be happier because 84% feel their work gives them a sense of purpose.another reason for this happiness might be the freedom to work wherever they chose as 41% of them work from home.