Freelancing to Survive and Thrive in Times of COVID

by Gerry Allan | Aug 31, 2021 | Managing | 0 comments

“Pleasure in the job puts perfection in the work.”
— Aristotle

“Success is no accident. It is hard work, perseverance, learning, studying, sacrifice, and most of all, love of what you are doing or learning to do.”
– Pele

“The best time to plant a tree was 20 years ago. The second best time is now.”
– Chinese Proverb

“Whatever you are, be a good one.”
— Abraham Lincoln

“One day or day one. You decide.”
– Unknown

“You don’t need to see the whole staircase, just take the first step.”
– Martin Luther King Jr.

“Wherever you go, go with all your heart”
– Confucius

“Try not to become a man of success, but rather become a man of value.”
– Albert Einstein

Freelancing is generally understood today to be a type of self-employment that is operated as a real business, unlike “gig work” and “side hustles”. It is a serious work or career choice, typically pursued on a full-time (or even 24/7) basis.

Evolving from a long history of part-time and temporary work, freelancing has been given a huge boost by information and communication technologies of the 2000’s. These have made it practical to carry out a large portion of knowledge and creative work outside a formal office, employee environment.

This is one of the most important trends today in business and for many other types of organizations. Over one-third of U.S. workers are considered independent contractors or self-employed by the IRS. Both the structure and operation of organizations are changing dramatically and permanently as a result.

However defined, “freelancers” now constitute an enormous workforce virtually worldwide. Such workers are increasingly location-independent and technology-based. This is epochal change.

What is freelancing?

According to Wikipedia “… the term freelancer is commonly attributed to Sir Walter Scott (1771–1832) in Ivanhoe (1820) to describe a “medieval mercenary warrior” or “free-lance” (indicating that the lance is not sworn to any lord’s services, not that the lance is available free of charge).”

“Fields, professions, and industries where freelancing is predominant include: music, writing, acting, computer programming, web design, graphic design, translating and illustrating, film and video production and other forms of piece work which some cultural theorists consider as central to the cognitive-cultural economy.”

Most freelancing involves an individual who provides a service for a fee. It is a type of self-employment, or as the IRS terms it, an independent contractor, who receives a tax form 1099 instead of a W-2. A freelance job is one where a person works for themselves, self-employed rather than employed by a company.

Not everyone uses the term “freelance” or “freelancer” when it comes to work that a freelancer may do. In fact, even most freelancers refer to themselves as “self-employed.” A more recent term is “gig-worker”. It does get a bit confusing …

“Is carpentry a freelancer? If you have a passion for carpentry then you may want to consider making a career out of it as this can be work which is rewarding, challenging and lucrative. Many carpenters go down the freelance route because this puts them in complete control of their work and can bring many advantages.”

The on-demand workforce

The Harvard Gazette in late 2020 wrote a short piece on “The gig is up: High skills freelance economy surges as digital talent platforms help build new on-demand workforce”:

“Researchers from Harvard Business School’s Managing the Future of Work Project and Boston Consulting Group’s Henderson Institute today released the report “Building the On-Demand Workforce,” which explores the recent rise of digital talent platforms and how they are creating a new marketplace for high-skill freelance work.”

“Companies that are early adopters of these platforms see a competitive advantage in shifting their workforce model to a blend of full-time and freelance employees, while, at the same time, millions of highly skilled professionals, who seek flexible and remote work, are using these platforms to connect with employers.”

“Researchers surveyed nearly 700 senior business leaders at U.S. companies. The goal of the survey was to understand better the pervasiveness and patterns in use of new talent platforms. The report is based on information from this groundbreaking survey as well as in-depth interviews with representatives from the talent platforms themselves and the companies that use them.”

“Our research showed that many leadership teams have not yet fully grasped the strategic significance of these talent platforms. They are more than a stopgap, they are a means for resolving the chronic problems companies face while filling their talent needs. Business leaders cannot risk missing a critical opportunity to build a more flexible, resilient organization,” said Joseph Fuller, professor of management practice and a co-chair of the Project on Managing the Future of Work at HBS.”

Uncertainty drives workforce flexibility

Many employers are finding that a highly “flexible” workforce – aka variable headcount – is becoming essential to survival in these times. This demand for operating cost flexibility creates a growing opportunity for freelancers.

Freelance work is finding a major, permanent place in organizations of all sizes and types. This is not just a passing state of affairs but a great, long-term restructuring of work and workplaces. The COVID situation is of course a major driver.

Is gig work the same as freelancing in practice?

As Flexjobs notes:

“… Before apps brought the idea of on-demand services and gig work to everybody’s phone, the gig economy was sometimes called the freelance economy, agile workforce, or even temporary work. Though the term “gig economy” is relatively new, these nontraditional work arrangements have been around a long time. A study by the American Staffing Association found that the majority of Americans (78%) see the gig economy as a new way to describe the participation of this longstanding independent workforce.”

“A gig worker might have a day job where they work a traditional 9-to-5 job, and then a second “gig job” from 5-to-9 at night. Or, a gig worker might work multiple “gigs” to create a full-time job, but on a flexible or alternative schedule. Gig workers can also choose to work from 9-to-5.”

My sense here is that gig workers are more likely to be temporary or secondary-job workers, working less formally, than freelancers. Freelancing is generally a real business with one employee, not a side-hustle.

The surprising dimensions of freelancing

Upwork, an American freelancing platform “where enterprises and individuals connect in order to conduct business”, released in late 2020 a study of freelancing in the U.S. that seems truly mind-boggling: “New Upwork Study Finds 36% of the U.S. Workforce Freelance Amid the COVID-19 Pandemic”:

“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. “

“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.”

“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.”

“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.”

“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.”

Freelancing is not remote working (i.e., full-time, for an employer)

The lengthy quote above (see especially the last paragraph) brings up a very important point regarding the real context of freelancing. Remote workers are not freelancers. Freelancers are independent contractors, self-employed. Remote workers are employed but working outside of a regular full-time office employment.

Freelancing is generally a real business with a single self-employed employee. Different from gig work, as noted above. This has major implications both for freelancers and for businesses and organizations who use freelancer services.

Let’s focus on freelancing as a personal business rather than on those who use freelancers.

Why freelancing is attractive

Freelancing provides much flexibility and control because you are your own boss. Many freelancers choose their own hours, the work they do, the clients they work with, and their working location.

A form of entrepreneurship, freelancers control their earning potential. They aren’t locked into a compensation structure, and so can earn as much as they are able to find work and bill their clients.

Very important, freelancing provides great variety in the type of work you can do. You can mix and change types of work as you like (and as you can find buyers). If you have many interests and are drawn to trying new things, freelancing can help you explore all kinds of projects and industries.

Your pace of work can often be self-determined apart from project deadlines. You can take breaks when needed – vital for those with families or care-giving situations.

Is freelancing something people typically do forever? I could not find any data on this but it is likely that turnover is substantial. Freelancers may hire other freelancers or employees to build a full business, or they may build their own set of products that eventually replaces freelance income. They may even go back to working full time as an employee. Freelancing is not easy.

Freelancing risks are significant

One of the biggest advantages of full time employment is access to healthcare and other financial benefits such as a 401K retirement plan or company-provided life insurance. Freelancers are on their own when it comes to planning for their financial futures and enrolling in health insurance coverage. Self-employed individuals must buy a policy for themselves and family only, typically at higher cost. It is easy to set up your own retirement savings account, but there will not be any matching contributions from your employer.

Freelancers are generally responsible for generating all income coming into the business. If you are unable or unwilling to sell more projects and land more clients, your income will begin to dry up.

Freelancing long-term is clearly not for everyone.

Where do freelancers find work?

Website hosting services provider Hostinger has an interesting summary of major talent platforms: “18 Best Freelance Websites to Find Work in 2021”. Below is my summarized summary for a few of these:

Fiverr is a platform that connects freelancers with business owners looking for services in various digital projects, including website design, content writing, and voice-overs.
Freelancing type: digital marketing, web development, social media
Pros: diverse category, free registration, online courses
Cons: high commission charge, long payment process

Upwork is a freelancing website that connects clients and freelancers from across the globe.
Freelancing type: brand marketing, programming, website design
Pros: payment protection, credible clients, budget-based projects
Cons: lengthy selection process, high service fee

Toptal is a freelance website that connects highly qualified freelance industry experts with companies.
Freelancing type: software development, financial consulting, interim management
Pros: top-tier companies and talent, free invoicing and payments
Cons: extensive screening process, big projects only

LinkedIn is one of the most popular job sites providing an easy way to find jobs in various fields. It’s also a social networking platform for professionals to connect and interact with each other.
Freelancing type: copywriting, translation, graphic design
Pros: networking opportunities, recent news updates, cost-effective
Cons: spam content from malicious users

Flexjobs is a website that specializes in flexible and remote job opportunities, including freelance, part-time and full-time jobs. There are broad categories, from education and training to journalism and writing jobs.
Freelancing type: writing, content marketing, transcription
Pros: scam-free, 30-day money-back guarantee, reliable support
Cons: some premium jobs can be found outside the platform

SimplyHired is a job board where companies can post job opportunities for free. It also collects job offers from all over the internet into one page. The site has a clean user interface, making it easy to browse jobs by category.
Freelancing type: human resources, finance, data entry
Pros: email alerts, helpful guides, free job tools
Cons: spam from unreliable third-party websites

Guru is a place for freelancers and companies across the globe to work together. Companies can hire professionals with various skills, such as programmers, graphic designers, and product managers.
Freelancing type: marketing, programming, administration
Pros: secure payment, customized job listings, free membership
Cons: potential fake clients

Freelancer.com is another freelance website where professionals and companies from around the world collaborate on various projects. Thanks to the wide range of expertise, clients can easily find an expert of any type.
Freelancing type: content translation, web development, social media marketing
Pros: progress tracker, live chat, 24/7 customer support
Cons: complex interface, spam applicants, and fake clients

Behance is a social network for creative talents. People worldwide use this website to build portfolios and share their creative work, ranging from animations and illustrations to website and graphic design.
Freelancing type: illustration, photography, web design
Pros: large audience, networking opportunities, personalized content
Cons: competitive environment, limited image file size

99designs is a freelance website specially tailored for designers and businesses to collaborate. There are various design projects available, from logo design and book covers to clothing and merchandise.
Freelancing type: web, logo, and graphic design
Pros: dedicated environment, payment security, active community
Cons: high service fees, the designer level can be limited

For a lot more information, go to the full article using the Hostinger link above.

Workplace uncertainty makes freelancing a good way to survive and thrive

Employers are steadily moving away from full-time workers and toward a much more flexible mix of freelancers and employees. Our new normal of constant change makes this trend likely to continue for the mostly unforeseeable future.

Full-time employment opportunities will be decreasing as a result. Businesses and other organizations will use freelancers wherever possible to handle variable demands and specialized or occasional needs. It seems quite possible that freelancing will grow steadily from its current level of 35% of the U.S. workforce and could reach as high as 50% within a few years.

Bottom line:

One piece of very good news in the endless COVID mess: freelancing as a work choice is exploding. It has already reached 36% of the U.S. workforce – 59 million workers. This excludes employees who do remote work or work from home. Technology and freelance facilitating talent platforms are making this work choice even easier and more attractive as businesses and other organizations move toward a more “flexible” workforce mix of full-time and freelance workers.

Related Reading

Julia Olech writing in WizCase offers a nice overview of freelance skills required today in a wide range of work situations: “Top 30 In-Demand Freelance Skills to Learn in 2021”:

“Freelancing is no longer predominantly seen as a “side hustle” or way to support yourself during unemployment. You can now earn a full-time income from the comfort of your own home! As technology and easy access to the internet are making it easy to find online work, over 57 million workers in the US alone have already switched to self-employment. With the prospects of a better work-life balance, much higher pay, and more job satisfaction, the number of self-employed experts is only going to increase.”

Forbes has another article that describes the growing trend toward freelancing: “Full-time Freelancing Lures More Americans”. You might want to check it out.

FlexJobs, a subscription-based service for job seekers, provides its view on what constitutes a freelance job: “What are Freelance Jobs? A Guide to Freelancing”:

“In 2019, an MBO Partners’ survey found that nearly 41.1 million Americans identified themselves as freelancers, whether it was a few hours a month or a full-time arrangement. To break that down a little further, nearly 15 million workers claimed to be part-time freelancers, and 12.4 million called themselves full-time freelancers!”

“Freelancers are responsible for all sorts of things that traditional employees are not, such as setting their work hours, keeping track of time spent on different projects, billing clients, and paying their own employment and business taxes. Freelancers are not considered “employees” by the companies they work for, but rather ‘contractors’.”

Contract work/job: Jobs where you’re a temporary contract worker, rather than a permanent employee.
Independent contractor: Another common way to say freelancer, but your work terms are specified by a contract with another company or individual.
1099: Refers to the IRS form an independent contractor fills out, form 1099-MISC, and is often used to describe the job (“This is a 1099 contract role”).
Contract consultant: Someone who is hired for temporary consultations for specific issues within a company.
Contract-to-hire: A job that begins as a freelance, independent contractor position but has the potential to become a regular employee position if things go well.”

Flexjobs continues with a useful take on “Traits and Characteristics Needed as a Freelancer”:

“There are a few qualities you should possess to set yourself up for freelance success. While not an all-encompassing list, these essential characteristics will give you an idea of where to focus.”

“Discipline: No boss is watching you out of the corner of their eye and colleagues aren’t there to judge you when you spend an hour online shopping instead of working. Self-discipline is necessary to stay on track.”

“Persistence: Persistence is always important, but even more so when you’re just getting started as a freelancer and trying to track down work.”

“Resilience: There’s one word you’ll hear more than anything as a freelancer: no. Rejection is the name of the game, and you’re going to need to let it roll off your back.”

“Organization: You’re responsible for a lot of different tasks. It’s up to you to keep track of your income and expenses, promptly reply to client emails, stay on top of your deadlines, keep your files sorted, and make sure your workload is streamlined.”

“Proactive: You don’t necessarily need to be outgoing in the traditional sense, but you do need to be a little aggressive to land new clients. If you want to grow your business, you’re going to have to be comfortable networking and approaching strangers, whether you’re doing it in person or digitally.”

“Communicative: Being a freelancer involves a lot of communication. You need to be willing to have the hard conversations—like negotiating a higher rate or breaking up with a client—and handle them tactfully and professionally. There’s no boss or other colleague to take care of that dirty work for you.”

“Cons of Freelancing: With the ultimate in control comes additional responsibilities. As a freelancer, you are a business owner, and you need to stay on top of taxes, invoices, payments received, finding your own health insurance, and buying every piece of software and technology you need to complete your work. Feast or famine syndrome is another real downside to freelancing. Some months you’ll be full to the brim with work, while the next month may be a ghost town. You may be relying on a consistent contract with one client, only to find they suddenly don’t need you anymore. Freelancing requires good money management and constant sourcing of new clients.”