While the current economic recovery in the United States may be a little less robust than was first envisioned, it has at least been sustained during the first two financial quarters of 2013. This sluggish period of growth is a consequence of the Great Recession, as consumer confidence continues to fluctuate wildly and the U.S. employment market experiences its weakest recovery since World War II.
While the global economic recession may have triggered long-term stagnation, it has also impacted heavily on behavioral trends in the U.S. This is most noticeable in the changing nature of business start-ups and the entrepreneurs who operate in the U.S. A growing number of individuals have been forced to work independently out of necessity rather than a deep-rooted desire or long-term aspiration.
The Rise of the Freelancer: Does it Represent a Good Career Move for You?
This trend is reflected in the rising number of freelancers in the U.S., which reached an estimated 42 million during 2012. Including temporary workers and self-employed individuals, this demographic now accounts for approximately 33% of the U.S. employment market and is set to grow even further over the next decade. As recently as 2010, technology giant Intuit predicted that freelancers would make up 40% of the total workforce by the year 2020, and while this may have a positive impact on lowering the national unemployment rate, it raises other issues concerning long-term job security, pension plans and the average citizen's ability to save.
With these points in mind, you will need to give careful thought to your next career move as you consider the alternative benefits of freelancing and traditional employment. Keep the following factors in mind as you appraise each individual option:
Industry Growth and its Compatibility with Remote Working
The industry in which you work has a key influence in determining your preferred method of working, especially if you are to maximize your earning potential and achieve career advancement. A survey conducted by freelance giant Elance in September 2012 revealed that businesses across numerous industries are posting a record number of fractional and project-oriented jobs, with 42% of employers also confirming that they anticipate hiring more independent workers in 2013 than the previous year. While this reflects the widespread and diverse growth that defines the market, it is important to remember that the remote nature of freelancing remains more compatible with some sectors and job types than others.
Further evaluation of this report suggests that creative and technical jobs are the fastest growing in the freelance market, as the vast majority of work can be assigned and completed online. Individuals with IT, multimedia and software programming skills can therefore expect to find well-paid and continuous work while freelancing, while 2012 also saw a significant rise in the demand for mobile application developers and accountants. While the market is constantly evolving to include new sectors and job types, it is important to evaluate your own specific niche and skill set prior to forging a career as a freelancer.
Time Vs. Money and Your Earning Potential as a Freelancer
When it comes to evaluating the viability of freelancing, it is important to calculate your earning potential and the number of hours that you will need to work in order to achieve your financial goals. This conundrum of time versus money is crucial to determining the precise value that you place on your marketable skills, and whether or not making the transition from traditional employment would be worthwhile. To begin with, it is worth noting that the typical U.S. citizen worked a total of 1,776 hours during 2011, which means that the average working week consisted of just over 34 hours.
In contrast, U.S. freelancers worked an average of 39 hours each week during 2011, which represents a considerable difference over the course of a single year. Despite this trend being prominent across several continents, a global study of freelancers revealed that 48.7% earned less that they had anticipated despite their increased output. An even greater concern is the issue that freelancers have had with regards to acquiring payment for completed work, with 40% of the global talent pool claiming that they struggled to claim the wages that they were owed. It is important to keep this in mind, as you must consider which method of working affords you the best financial rewards for your effort.
Your Personal Circumstances and Long-Term Goals
Although freelancing continues to gain in popularity, it is important to remember that there are disadvantages associated with this method of working. The most prominent disadvantage is a lack of benefits, as freelancers cannot access employment contract staples such as statutory sick pay and healthcare coverage. When you consider that the primary motivation to work remains financial remuneration and the compensation that is offered in exchange for your services, the lack of a detailed contract means that freelancers are often at a significant disadvantage within the existing employment market.
Freelancers must also cope without a long-term pension plan, which can seriously impinge upon their ability to save and secure financial independence. Given that U.S. workers are already held in the grip of a pension crisis and facing the prospect of exhausting their funds just 14 years into retirement, those who operate as freelancers appear to be facing an even more uncertain future. While there are personal and retirement account options that can help you to save towards your future as an independent contractor, you must also factor in the lack of employer contributions and your specific retirement goals before establishing yourself as a freelancer.
The Bottom Line
By giving careful consideration to these factors and your long-term goals as an individual, it is possible to gain an insight into the reality of freelancing and whether it is viable for your specific circumstances. Although the increasing accessibility of independent contracting has undoubtedly created vital opportunities within a struggling job market, it is important to remember that this method of working also has considerable disadvantages in comparison with traditional employment. If you are considering going it alone as a freelancer, you must make a balanced decision and ensure that you are not swayed by popular opinion or sheer volume of freelancing growth statistics.