Covid amplifies existing trends that accelerate the already growing freelance economy. We all know the freelance economy isn’t a fad – if you want to be wow-ed by stats pre-pandemic, here’s a sample from Upwork’s 2019 Freelancing in America Study:
- “Freelancing income exceeds GDP of some major industries – At nearly $1 trillion (approaching 5% of U.S. GDP), freelance income contributes more to the economy than industries such as construction and transportation and is on par with the information sector.”
- “As many view freelancing as a long-term career choice as they do a temporary way to make money, at 50% each. Since 2014, the number of those saying they’re freelancing long-term increased from 18.5M to 28.5M—up 10M in only 6 years.”
- “The largest type of freelance work is skilled services (like computer programming, marketing, IT, business consulting, etc.) at 45% of freelancers.”
But deeper than the numbers, Covid simply amplifies the four trends below that have already been driving this shift (there’s more, but these are the four most relevant to Covid).
Trend 1: The New American Dream represents a forever-changed workforce.
Ownership of independent, remote work is replacing the traditional path, and Covid accelerates this crossroads of opportunity in several ways.
First, it exposes the weakness of having one income stream. As independent content marketer Ana Gotter said in a post:
- “I’ve lost 60% of my income temporarily with clients needing to pause contracts. I still have 40% leftover, because all my eggs weren’t in one basket, and it’s easier for me to wrangle up a few extra projects than a whole new full-time job right now. Freelancing isn’t for everybody, but I’m grateful for it, even right now when things are particularly hard.”
This isn’t brand new. Pre-Covid, over half of freelancers said no amount of money could convince them to go back to a full-time job. Post-Covid, top talent in the “traditional” workforce will realize that unlike what they’ve been told, freelancing is actually the most stable path.
Second, it proves that remote is here to stay.
After this massive workforce experiment, we can finally stop saying “my job/my team can’t be remote.”
It’s clear from successful companies such as these that a remote operation not only works, it’s scalable – and the general workforce will be demanding more flexibility after tasting the WFH lifestyle these past few months.
*As a caveat, it’s worth noting that freelance and remote are different – remote is incremental, while freelance is a fundamental shift in how we work. Keep that in mind in your “future of work” conversations moving forward.
Ownership of independent, remote work is replacing the traditional path
Trend 2: Companies need freelancers to be lean and survive in the new economy.
‘Lean’ is a confusing buzzword that most leadership teams have been told about but not necessarily experienced. For example, while most organizations say they’re lean, the incentives were to never go ‘under budget.’
Covid shatters this pretty picture.
Right now, leadership teams have three hair-on-fire questions:
- What needs to get done
- How do we re-scale
- How do we do this on a shoestring budget
McKinsey has a great framework to understand this (shoutout to Nile founder Sarah Ronald for insight on this).
No matter the stage, hiring freelancers is the ‘lean’ way to survive and thrive in post-Covid. Using the McKinsey framework, hiring freelancers unlocks the speed and cost required to be resilient, then return, reimagine and reform their business:
- Cost: 50-90% savings
- Speed: From ~30 days to ~2 to find & hire the right person
Covid brings hiring freelancers from nice to have to a necessity
Trend 3: Shattering the ‘gig’ economy
There’s been a shift from the ‘gig’ economy to the expert economy. Today’s freelancers do NOT look like they did yesterday.
There’s a couple major differences.
- The best talent is leaving full-time employment to work for themselves. They aren’t jumping from job to job. Or looking to work at the beach. On the contrary – they are so good that they are willing to work on a project-by-project contract.
- They don’t look like individuals, they look and operate like businesses. This isn’t new to most freelancers. When I freelanced full time, clients engaged with InnoGeek Group – not Matt.
- They are extremely technologically savvy.
Covid kicks this into hyperdrive because while companies are turning to freelancers instead of agencies, their expectations haven’t changed, and only this new wave of freelancers can exceed these expectations.
What’s the difference between a freelancer and an agency?
- Agencies can do it all (or so they say)
- An agency has dedicated client support
- No one gets fired for using the agency their boss would have also used
This means in order to exceed expectations for these new buyers, freelancers must increase their scope of work (going from delivering an article to a full ad campaign), provide relationship management, and consistently deliver scalable outcomes.
Which, as we’ll learn in the next bullet, is driving what we call the ‘job creators of tomorrow.’
Today’s client expectations are accelerating a new type of freelancer
Trend 4: We have a new wave of job creators
Today’s freelancers are the job creators of tomorrow. They’re creating consistent jobs and taking ownership over fellow freelancers’ growth.
Like any business, freelancers prioritize scale. They know they can’t do it all and that there are only so many hours in the day. Yet they remain a one-person business – so how in the world do they scale?
By working with other freelancers in what’s commonly called the ‘Hollywood model.’
Experts step in for what’s needed then leave. There’s still collaboration. But instead of one 50-person, full-time team, there’s an elastic network flowing in line with what’s needed.
This controlled chaos is generally organized by two types of freelancers: the CEO and the Subject Matter Expert (SME). Out of 10 freelancers, 3 are the CEO. The CEO owns the client relationship, strategy, project management, and curation of the network. The SME owns the outcome. On average, the CEO does 25% of the work then subcontracts 75% of the work from a network of 20-50 other freelancers.
On the surface this sounds transactional, yet freelancer networks are arguably more aligned with what’s best for the individual. Think about it – as we discussed in Trend 1, Covid has exposed the lack of security in full-time employment. Yet in order for the CEO-type freelancer to have a healthy group of freelancers to collaborate with, they MUST treat them right.
- We provide the agency without politics.
- Our freelancers aren’t in it alone.
- We handle the client admin work.
- We fight for fair fees.
- Our freelancers have the opportunity to grow their copywriting career.
Freelancers are the job creators of tomorrow. They’ll increasingly provide consistent jobs and growth trajectory.
Future Trend: What happens next?
There’s a reason we call the freelance economy a radical redistribution of opportunity.
For individuals, it enables the New American Dream by replacing one risky salary with a portfolio of clients, along with the freedom and flexibility to form work in accordance with their unique situation. Which is why over half of freelancers said no amount of money could convince them to go back to a full-time job.
For companies, it enables agility through cost efficiency. Covid accelerates this by exposing the normalcy of remote and the necessity of being lean.
But as an industry we’re not ready for a world where individuals need the scope and scale to replace an agency.
Which is where we come in at Venture L.
Ultimate Guide to Freelancing Course
For many of you, in January you didn’t expect to be a freelancer. You were a general manager, or a director on track for that next promotion.
We want you to know that you can thrive in the freelance economy. Freelancing is different. You don’t have a salary. But your expertise is extremely valuable, and instead of ‘changing’ to be a freelancer, it’s about adjusting the way you deliver that expertise.
In order to help kickstart this, we’re offering free access to our Ultimate Guide to Freelancing Course. In week 1, you’ll learn the basics. In week 2, you’ll create your unique positioning. In week 3, you’ll be ready to start taking projects. Also by completion of the course, you’ll have acess to the Venture L community, where you can meet other freelancers who are building their network and looking to collaborator with experts like yourself.
We’d love to highlight YOU!
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