Recent data from Fiverr uncovers increased growth in the drive to freelance.
In 2023, 73% of US workers say that they plan to either start or continue to work in a freelance capacity, prompting many to call 2023 the year of the side hustle.
What’s the psychology behind the move to freelance work, and how does this shift help us understand an ongoing power struggle between employers and employees?
Understanding a Power Shift that’s Happened Over Time
Remember the Great Resignation? It feels like only yesterday that employees were voluntarily leaving positions in their droves. In 2021, over 47 million Americans chose to leave their jobs, with many people citing the pandemic as a trigger. Harvard Business Review described 5 R’s which were impacted by COVID-19, retirement, relocation, reconsideration, reshuffling, and reluctance.
According to HBR, while during 2020 many held onto their jobs due to uncertainty, in 2021 – the tide turned. Workers who wanted to get more out of life retired in greater numbers, did not want to relocate, reconsidered the role that work played in their life, or decided to reshuffle to similar roles in their industry in search of higher wages or better working conditions. Altogether, workers demonstrated a reluctance to return to in-person roles post-pandemic, once they had experienced the work/life balance of losing the office and the commute.
However, as we entered 2022, employers began to fight back. Skills shortages may have led to workers holding much of the power, but the cost-of-living crisis and looming recession gave employee confidence quite a knock. Suddenly employees need to hold onto their jobs (and their paychecks) more than ever. This employee fear has been exacerbated by heavy layoffs, especially in the tech industry. These layoffs have impacted close to 100,000 jobs so far in 2023, with many analysts and experts describing tech workers as previously spoiled with perks and high salaries, and firings representing a fall down to earth.
As the economic downturn has hit the headlines, reality has set in. Employers are taking back control.
How Can Employees Hold onto Their Leverage?
If employers demand that employees need to return to the office 3, 4 or even 5 days a week – how can they refuse when so many people are losing their jobs and looking to take their place?
This shift in the power balance has many employees feeling mutinous. They’ve gone from calling all the shots and having their pick of high salaries and great perks, to feeling trapped into returning to the office and feeling demoralized in the workplace.
Instead of caving into employer demands, employees are looking for a new approach to work altogether. Some have attempted viral trends such as “quiet quitting”, where employees do the bare minimum and refuse to go above and beyond for their employers. However, most people want to feel passionate and dedicated to their work, and so quiet quitting is a poor solution to combat low morale.
In contrast, many people are finding meaning by turning to freelance life, supporting workers in gaining back the lost power, and relieving much of the anxiety around the uncertain working landscape. After all, it’s not like employees feel confident with the current status quo. Compared to a year ago, 53% of workers feel less or the same level of security about their income, and 33% say that if they were laid off, it would take them more than a month to find a job that could match their current income.
The data from Fiverr on the growth of freelancing represents an image of workers who won’t take losing their autonomy and control lying down. Freelancing has become a lucrative alternative to the insecurity of full-time work, with 31% of freelancers saying they make $75,000 or more each year. Instead of waiting around in a full-time position worrying about being let go in the next round of layoffs, or clocking in and out each day with a dejected state of mind, skilled workers can focus on multiple high-worth projects where their expertise is highly valued. By spreading their worth across multiple clients, any one lost client opportunity has far less of an impact.
The benefits don’t stop there. For employees turning to freelance life, they can expect:
- Professional experience: Employees work for a single company for multiple years, while freelancers can add a stack of impressive logos to their CVs whenever they choose, and work for them all simultaneously. Apple, Meta, Amazon, and many other big names all rely heavily on freelance talent. Hey, Google employs more freelancers than full time employees!
- Choice over how they work: Many employees are turning to freelance life as a result of demanding return to office mandates. If you don’t want to be told where and when to work – become a freelancer! One of the top perks is choosing your own hours and location, which means you can freelance around care commitments, hobbies, or just a penchant for lie-ins.
- More freedom of downtime: Freelancers are often experts in efficiency, as they can get paid per project. That means once they get the job done, they can move onto something else. This could be spending more time with family or friends, or for those with a workhorse mentality – it could be picking up more client work with that business or elsewhere. Either way, you’re being rewarded for your efforts, which is more than many employees can say they feel right now.
To Retain Top Talent, it’s Time to Accept the Inevitability of Freelance Workers
You need to accept that the tide has turned. Workers have experienced the flexibility and control of working from home and enjoying more freedom in their professional lives, and for many – there is no going back.
While certain employees will accept return to office mandates, and settle down to work according to traditional norms, many skilled employees will be looking to shift their working paradigm. It’s clear that a significant percentage will embrace freelance life. Having a strategy for working with freelance talent is no longer a “nice to have.”
Businesses who fail to prepare for a hybrid workforce will quickly fall behind.
Ready to discuss a freelance management solution for your business?