Why 2021 Is The Year To Start Your Freelancing Business
Living in the COVID-era where many employees were forced to work from home for safety precautions, today’s workforce is seeing that not only is working from home a necessity, but it’s also effective.
So why is now the best time to start your freelancing business? Because more and more businesses are seeing freelancers as a viable option and the world of internet marketing and online business is growing exponentially, opening up the market for freelancers everywhere.
If you’re still not convinced that freelancing is for you, or that you can make a decent income with it, read on to see some statistics that will help you make your decision to either become a freelancer or start hiring one.
Why freelancing is the future
Freelancing isn’t just a temporary gig thanks to COVID. It’s actually been around for years but has gained even more popularity recently.
According to one study done by Upwork, the growth rate of freelancers between 2014 to 2017 was 3x faster than that of the non-freelance workforce. If that growth rate continues, it is expected that freelancers will make up the majority of the U.S. workforce by 2027.
In fact, Upwork’s recent Future Workforce Pulse Report revealed that by 2025, an estimated 36.2 million Americans will be working remotely, which is an 87% increase from pre-COVID levels. The same report showed that 73% of hiring managers see the value in remote work and are engaging with independent (freelance) professionals.
The current job market
It’s no surprise that the freelancing job market has increased during the pandemic. With many employees being laid off from their traditional jobs and unable to go out and look for new jobs, the number of full-time freelancers increased by 36% in 2020.
Businesses are becoming more comfortable with remote workers, with several businesses now using a completely remote staff. These businesses include Edgar, Basecamp, Zapier, Trello, Buffer, Toggl, and others.
One study found that freelancers who offer skilled services (IT, web design, marketing, etc) earn a median rate of $28/hour which is more per hour than 70% of U.S. workers in the traditional workforce. 3 in 10 freelancers report leaving their current employer to start freelancing and 57% reported earning more money as a freelancer within the first 6 months.
The table below shows the average freelance earnings by gender:
Image source: https://www.websiteplanet.com/blog/freelance-stats/
The life of a freelancer
One of the key reasons that people choose to become a freelancer is for the lifestyle that it affords. Many freelancers choose this career path for the freedom and flexibility, plus the bonus of being your own boss. Because you have complete control over how many clients you want to work with and what you charge, you have a higher earning potential.
This study showed that there are 4.1 million digital nomads traveling around the world. Many people who were unable to work a traditional job due to health or personal circumstances have said that freelancing has given them the opportunity to work and earn a decent income.
Freelancers have also reported an improvement in their work-life balance and health since going independent. 68% of freelancers in this study claimed that their quality of life had improved, and nearly two-thirds saw an improvement in their sleep and overall health. Speaking from personal experience myself, no amount of money could get me to return to a traditional position.
Should your business hire a freelancer?
Now let’s switch sides and talk about business owners. Why should your business hire a freelancer? According to the latest release of Employer Costs for Employee Compensation by the U.S. Bureau of Labor Statistics, employers were paying civilian workers an average of $38.26/hr. Wages and salaries averaged $26.25 while benefits averaged $12.01. As we noted earlier, the average skilled freelancer earns an average of $28/hr, saving employers $10/hr right off the top. Add to that the fact that employers don’t pay freelancers for downtime, only for the actual skills and services provided, and the saved money on overhead costs (workspace equipment).
Business owners are also able to broaden their talent pool by not being limited to local workers. When you work with freelancers, you could be working with someone from the same town or someone halfway across the world. You are also able to hire out for specific projects and find freelancers who specialize in your project needs, versus having to train someone in office to learn these special skills.
Key takeaways
Freelancers will make up the majority of the U.S. workforce by 2027
The number of full-time freelancers increased by 36% in 2020
Freelancers with specialized skills earn a median rate of $28/hour which is more per hour than 70% of U.S. workers in the traditional workforce
Freelancers reported an improvement in their work-life balance and health, with 68% of freelancers claiming that their quality of life had improved
Business owners actually save more money by hiring freelancers and are able to broaden their talent pool
