A new report from Upwork finds that freelancers contributed $1.35 trillion in annual earnings to the U.S. economy in 2022, up $50 billion from the previous year.

Some 60 million Americans performed freelance work in 2022, contributing $1.35 trillion in annual earnings to the U.S. economy — an increase of $50 billion over 2021, according to a new report from Upwork. That represents 39% of the workforce, up 3% from 2021, the freelance work site said.

In terms of specific work, over half of the freelancers provide knowledge services: 51% of all freelancers, or nearly 31 million professionals, provided knowledge services such as computer programming, marketing, IT, and business consulting in 2022, according to the report.

What factors lead to this uptick in freelance work?

In light of economic uncertainty and new perceptions of work due to The Great Resignation and quiet quitting, many professionals have been reassessing their careers.

The Great Resignation was sparked during the COVID-19 pandemic, with some professionals quitting their jobs in search of more flexible and fulfilling work, while others were prioritizing a greater balance between work and life, and still, more were exploring their entrepreneurial side and starting new side businesses.

Regardless of the reason, the COVID-19 pandemic offered professionals a different perspective on work and careers, leading many to pursue freelancing, Upwork said.

“Freelancing continues to gain popularity among skilled professionals as more people evaluate their priorities and values around work,” said Margaret Lilani, vice president of talent solutions at Upwork, in a statement. “The 9-to-5, in-office, single employer model is not what all people want anymore. Instead, freelancing allows professionals to build meaningful careers with the work and clients they choose, and many are taking advantage of this opportunity.”

A more positive perception of freelance work

In addition, perceptions of freelance work have changed — nearly three-quarters of freelancers (73%) reported that freelancing as a career is becoming more positive, up from 68% in 2021, according to Upwork.

Gen Z and Millennials are the most likely to explore freelancing: In 2022, 43% of all Gen Z professionals and 46% of all Millennial professionals performed freelance work.

More diversification among workers’ revenue streams

There has also been an increase in professionals seeking an alternative to a single employer and diversifying their revenue streams. Across the labor market, more people than ever are diversifying their income: In 2022, 37% of all U.S. professionals had more than one employer, job, or contract project.

Diversified workers are those seeking multiple sources of income from a specific mix of traditional employment and freelance work. This segment grew to 17% of the U.S. workforce, up 3% points from 2021, according to the report.

The report also notes a sharp increase in freelancers who hold a postgraduate degree. In 2022, slightly more than one in four (26%) freelancers held a postgraduate degree, up from one in five last year.

While financial gain is a primary motivator for freelancing, flexibility and seeking a better sense of purpose in their careers were other driving factors, the report said. When asked about the reasons for freelancing, respondents cited the ability to earn extra money (83%) and flexibility in their schedule (73%) as the top reasons.

Higher overall work satisfaction

The report found that freelancers are more satisfied with all areas of work compared to non-freelancers. For example, 77% of respondents cited overall job satisfaction compared to 70% of non-freelancers; 71% of freelancers cited satisfaction with work-life balance compared to 65% of non-freelancers, and 74% of freelancers cited satisfaction with their working environment compared to 67% of non-freelancers.

Remote work gained greater acceptance during the pandemic, which has led to 81% of freelancer respondents saying that more people are exploring freelancing as a way to take control of their careers, according to the report.

Mental health and well-being are other significant reasons people opt to freelance, the Upwork report said. Seventy-three percent of respondents said freelancing provides the opportunity to address their personal, mental or physical health needs, while 69% reported having a healthy work-life balance and 57% said their general health has improved since they started freelancing.

Expect freelancing to continue through economic uncertainty

Despite a common misconception that a full-time job is the most stable career option, freelancers prove to be slightly more optimistic even during an economic slowdown, the report noted.

When asked about an economic downturn in the next few years, three-quarters (75%) of all professionals said they were concerned. Freelancers were not immune to this, but many said they feel optimistic about the future despite the concern. Overall, 69% of freelancer respondents expect their income to increase in the coming year, according to the report.

“This optimism may be due to the fact that 68% of freelancers have more than one employer, job, or contract project,’’ the report observed. “With this diversity of income, there is less reliance on a single employer than those with a full-time job feel. Similarly, freelancers see more opportunities available.”

[Source: This article was published in aofirs.org By Esther Shein – Uploaded by the Member of Broadreader]