Freelance workers embracing the gig economy

Freelance workers could potentially comprise 40 percent of the workforce by 2020.

Intuit predicts freelance workers could potentially comprise 40 percent of the workforce by 2020, up from just 12 percent today, according to Report Linker research. The survey found that, while 74 percent of today’s working population is employed in full-time or permanent roles, more than 10 percent of employees are already a part of what is called the “gig economy.” And that may just be the beginning.

The gig economy is expansive and includes both sharing services like Uber or TaskRabbit, and business and creative freelancers on short-term projects. Increasingly important segments for freelancers include tech talent, IT and network security, and data engineers as demand is quickly outpacing supply in terms of qualified individuals. Many businesses are turning to freelancers to help fill gaps in their tech needs to counter the rising skills gap.

The Intuit study found the on-demand labor market would grow by 18.5 percent over the next five years, and 79 percent of the existing on-demand providers worked part-time. This is likely to shift, however, according to Report Linker which suggests the new gig economy is going to slowly replace segments of the traditional workforce.

“The rapid growth of on-demand marketplaces is reducing the traditional friction of finding customers, enabling a new class of entrepreneurs to find a hungry market for their products and services,” says Alex Chriss, vice president and general manager of Self-Employed Solutions at Intuit. “The rise of the on-demand economy is also forcing policy makers, companies, and concerned citizens to ask important questions about the future of work and how best to create stability for this new breed of entrepreneur.”

ReportLinker’s survey found one-third of respondents would consider exiting the traditional workplace in favor of freelance or independent work, with nearly half saying they would take the leap within the next three years. As ReportLinker concludes, “This suggests there could be a quiet revolution underway.”

Among the reasons freelance work appeals to respondents were: being their own boss, flexible working hours, better compensation per job, better balance of work and personal life, better use and exposure of skills, opportunities for more interesting challenges, and the need for freedom or flexibility.

Interestingly, while age and gender impact the decision to become a freelancer (a quarter of mid-career workers between 35 and 54 considering making the leap), Millennials are far less interested in embracing the gig economy. The survey also revealed individuals rarely begin as freelancers; two-thirds of freelancers say they made the move after some time in the traditional workplace.

Those likely to do best in the gig economy are “workers with specialized skills, deep expertise, or in-demand experience” who “can command attractive compensation, garner challenging and interesting work, and secure the ability to structure their own working lives,” writes Diane Mulcahy, author of The Gig Economy: The Complete Guide to Getting Better Work, Taking More Time Off, and Financing the Life you Want in Harvard Business Review.