Does the Future Job Market Hinge on Freelancing?
By Lissette Maduro
Freelancing, the practice of passing on permanent employment and working independently, has been on the rise for the past decade and pundits are predicting that freelancers will make up the majority of the U.S. workforce by 2027. Consequently, it’s important for those looking to enter, re-enter or make a lateral move in the workforce to consider how the freelancing trend is shaping the future of the job market.
Like many novel ideas, freelancing gained traction as a result of necessity. According to research of the Bureau of Labor Statistics (BLS) done by Professors Katz and Krueger in 2015, there was a remarkable increase “in the incidence of alternative work arrangements in the U.S. economy,” reportedly from 10.7% in 2005 to 15.8% in 2015. These stats were disputed earlier this year by a Wall Street Journal report, asserting that a shaky labor market due to a decade-long recession may have inflated the numbers.
Although the reports regarding the extent of the freelancing trend may be confusing, there is no doubt, based on recent studies and research, that freelancing has a significant following and is influencing the job market.
A Significant, Sustainable Job Market Increase
Forbes.com contributor Diane Mulcahy noted earlier this year that based on surveys and tax data, the gig economy – a labor market with widespread freelance work – is sizeable and continuously expanding. Her position presumably lends from research done by talent agencies like Upwork, MBO Partners, Accenture, Deloitte and various other entities “that cite a significant and sustainable increase in freelance work”.
Backed by innovative tech advancements facilitating remote work, freelancing is revolutionizing the job market into an ‘on-demand’ (gig) economy. In 2018, a total of 56.7 million Americans were freelancers and 61% of freelancers reported deliberately choosing this working style over permanent employment.
The freelancing expansion is expected to be ongoing mainly due to the explosion of online talent marketplaces: organizations that focus on pairing people with jobs based on their skills. The lowered cost of discovering skilled workers and increased freelance work
opportunities that these online talent platforms offer, grows economies. A recent McKinsey Global Institute report indicated that by 2025 online marketplaces “could add $2.7 trillion to global GDP, and begin to ameliorate many of the persistent problems in the world’s labor markets.”
The Future of the Job Market
Millennials, currently the largest demographic in the American workforce, consider lifestyle a priority over earnings. Fifty three percent of 18-to-22-year-olds now freelance according to the 2019 Freelancing in America report and 50% of freelancers now view freelancing as a long term career.
Freelancing also allows workers with limiting circumstances like health or childcare issues, to re-enter the workforce. Forty-two percent of independent workers note that freelancing gives them necessary flexibility and 71% says freelancing allows them to work remotely. Technology makes it easier for 3 in 4 freelancers to find independent work with 64% of freelancers finding work online.
The freelancing economy is driving a job market that focuses on online recruitment and tech-centric opportunities for workers. It also promotes a future job market that is geared towards flexibility, lifestyle and on-demand skills.
The ongoing developments in freelancing gives the modern workforce the hope of finally realizing a balanced and fulfilling professional career.
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