6 Advantages of Independence

Independence Benefits by Eliza Evans 1

Appearances can be deceiving. Are full-time employees really any more protected than freelancers when it comes to pay cuts, furloughs and layoffs -- with an almost certain recession on the horizon as a result of the COVID-19 pandemic?

The St. Louis Federal Reserve district estimates that “as many as 47 million people” could become unemployed during the lockdown in the U.S. “Job losses of that magnitude would bring the country’s unemployment rate to about 32%, a figure higher than what was seen during the Great Depression,” says CNBC’s Kevin Stankiewicz. Those lost jobs come with other casualties as well. Benefits, especially healthcare, are also gone in former employees’ greatest hour of need.

The Shape of the Independence Economy

The independence economy has been growing at a staggering rate. In the five years from 2014 to 2019, freelance employment grew by almost a million people per year, with contract employment now reaching 35% of the U.S. workforce, according to the annual Freelancing in America survey commissioned by Freelancers Union and Upwork.

Compensation in the independence economy accounts for over $1 trillion a year, or more than 5% of GDP -- that’s on par with the U.S. construction industry. More than half of Generation Z work in the gig economy, compared with just over a quarter of Baby Boomers. According to a study by digital payments provider Mastercard, global gig economy payments reached $204 billion in 2018 and are expected to more than double to over $450 billion by 2023.

Based on the Freelancing in America survey, along with a variety of supporting research, here are the top six advantages of independence.

Reason #1: Multiple Streams of Income

In many ways, there’s less risk in the independence economy. The average freelancer has worked for five different clients in the last six months, according to the Freelancing in America survey. Workers in the independence economy rely on multiple streams of revenue. If one job ends, another may persist. One type of work dries up as another avenue opens up. Imagine your boss laying you off -- but you have four other employers who still need your help.

These multiple streams of income provide tremendous flexibility and longevity for contract workers. Freelancers are constantly upgrading their portfolio of clients, dropping those that aren’t as profitable for ever-better gigs. Ninety-three percent of contract workers say they can increase their income at will by working more hours. And freelance gigs are more likely than standard employment to continue generating income into retirement years.

Reason #2: Control Over Your Schedule

Independent contractors love their schedules and their freedom to work from anywhere. These are the highest-rated benefits of being in the independence economy. Parents can schedule their work around their family obligations, not the other way around. In the 2019 Self-Employment in America Report, 70% of those surveyed say they have a better work/life balance than they did working a full-time job.

Independent workers have more time to take advantage of virtual professional opportunities. Those who enjoy control over their schedule can choose to prioritize professional development. Instead of a staff meeting, they attend a new online course. A Zoom happy hour consists not of people they work with every day, but new connections built over common bonds in specialized networking groups.

Reason #3: Better Networking

Freelancers have an enviable professional network. As an independent consultant, it’s critical to stay in touch with your colleagues and maintain contact with potential clients. Even though coffee chats, networking events and seminars are usually virtual, they’re still an ingrained part of our daily professional practice.

When the lockdown orders started flowing and workers were forced to work from home, they suddenly needed to develop the kind of skills freelancers have honed for years. Three out of four freelancers work remotely, according to Freelancing in America.

Nearly all freelancers are good at virtual meetings. They have an established place for meetings with an appropriate background and good lighting. They usually have five ways of connecting with a client so they can use the method each client prefers.

Freelancers are also more likely to be members of professional organizations than employees. For contract workers, these associations provide most of their prospects, along with opportunities for continuing education.

Reason #4: More Time to Give Back or Pay Forward

If you are working independently, consider using this downtime to give back to the next generation of our community. There are many mentorship opportunities to help those facing graduation in an unpredictable job market. There are also ways to reach out to those who have been laid off. Give support to those in your network who are now entering unemployment, and pass along full-time jobs you come across.

More than half of freelance workers are likely to be involved in political movements, as compared with only a third of W-2 employees. Freelancers have banded together for mutual support during COVID-19, creating some of the best resources for people looking for assistance of any kind.

Reason #5: Better Professional Development

Freelancers believe in training. The Freelancing in America survey shows that 54% of freelancers participated in training programs in the previous year -- that’s 75% more than employees. At the time of the Freelancing in America survey, 71% of contract workers were engaged in skill-building programs as opposed to 57% of conventional employees.

Freelancers look at training as a way of protecting against downturns in the economy. They are always looking to shift to more higher-paying assignments that often require new skills.

Reason #6: Less Career Risk

The COVID-19 pandemic is bad news for all workers, but especially for conventional employees. The labor market is all-or-nothing for employees: either you have a job or you don’t. And with millions of Americans suddenly out of work, the competition for jobs is going to be fierce and wages are likely to be suppressed. By comparison, freelancers are looking at reduced incomes, not a complete bottoming out. They may find new clients before their unemployed neighbors find new jobs.

When the economy grows, the first people added back are often freelancers, since they can perform services before there is a compelling need to add to payroll. When the economy shrinks, employers also turn to freelancers to fill skill gaps rather than hire full-time employees. The flexibility of freelancers helps them find work in both boom and bust. Some are predicting that these and other economic tendencies will result in a call for broad and lasting shifts in the “gig” economy, particularly with regard to the protections and benefits accorded contract workers.

Matt Williams, Managing Partner at Brand Federation, which provides contract talent in brand strategy and aligned professions, writes:

“The good news? In the gig economy, ‘I’m a freelancer’ is no longer code for, ‘I’m between jobs.’ Today it means, ‘I’m good enough to work on my own terms.’ There’s a growing pool of freelance strategists in every specialty, with experience in every category. And they’re really, really talented.”

The changing shift in risk in our workplaces will continue to drive employees to the freelance market -- by choice or by force. We at Brand Federation believe the independence economy helps both workers and businesses. Using contract services, we are better able to manage our resources to stay specialized and nimble.

Online Resources for Freelance Strategists

Eliza Winston Evans is a senior brand strategist with Brand Federation specializing in finance and technology accounts. You can follow her on Twitter @ElizaWinston.

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