Why Freelancing Can Be Safer Than a 9-to-5 Job

By all accounts, the way we work is changing. A recent study of workplace trends by work-for-hire site Upwork showed that, over the last two decades, Americans have increasingly transitioned away from the traditional employer-employee workplace toward contract or freelance employment situations.

Of course, part of that trend has been driven by companies trying to shed the costly benefits associated with full-time employees, such as health insurance and retirement plans. But another factor is a growing interest in flexible work arrangements, especially among millennials. Either way, the freelance economy is now made up of 53 million Americans, or 34% of the U.S. workforce, according to the Elance survey — up from 30% in 2006.

In most cases, these workers fall into one of five categories: independent contractors (workers who perform contract work on a project basis); moonlighters (full-time workers who freelance on the side); diversified workers (those who earn a living with a combination of traditional and freelance employment); temporary workers (who complete temporary projects with an end date); and freelance business owners (workers who identify as small business owners and freelancers). Since freelancers and the capacity they work in remain wide and varied, the key to identifying each type of worker is complex.

The Upsides and Downsides of Freelancing in America

Still, freelancers of all types have much in common when it comes to both advantages and disadvantages.

Out of that survey’s 5,000 participants, half complained of a lack of stable income, while 47% complained they had difficulty finding work. Meanwhile, 31% complained about not getting paid on time, 23% said it was difficult to know which skills are in demand, 21% worried about finding affordable benefits, and 13% complained about paperwork and administrative overhead.

But freelancers agreed on the positives as well. Of those surveyed, 77% said the best days of freelancing are still ahead of them, while 65% noted they felt freelancing was respected more than it was three years ago. More than three quarters (77%) said they make as much or more money than they did before they started freelancing.

And when the survey asked individuals to identify why they chose freelancing, the results were telling. Despite the drawbacks, many freelancers embraced their work situations due to one common theme — freedom.

Here’s how a handful of respondents replied when asked why they chose freelancing:

“Freedom to set my schedule and work on opportunities that interest and challenge me.”

“I have more control over where I work, when I work and what I do for my work.”

“I choose to be in freelance because I’m able to work my own hours, determine my own salary, and be creative in my work.”

“I prefer the freedom to choose what sort of work I do without my schedule being controlled and my choices being commanded by someone else. I can express myself and be appreciated for it as well as bring beauty to the world by way of my work. It also is less stressful than an office environment and allows me the time necessary to take care of my farm.”

Why Freelancing May Be Safer Than a 9-to-5 Job

Traditional workers can’t always wrap their heads around why anyone would choose to freelance for a living. Without a steady roster of clients or a guaranteed wage, the idea of freelancing can even seem risky and downright dangerous to some.

But not everyone who works on their own feels that way at all. In fact, many self-employed individuals and freelancers feel that being a freelancer is actually safer than full-time employment. Here’s why:

Freelancers typically have more than one job going at a time.

Part of the beauty of self-employment is being able to work for more than one client. Any experienced freelancer will tell you that having multiple clients makes it easier to stagger work and keep the dollars coming in through multiple income streams.

Traditional workers can lose their entire income with one layoff.

While freelance work comes and goes all the time, losing a freelance assignment isn’t nearly as heart-wrenching or crisis-inducing as getting laid off or fired from a full-time job. Full-time workers who lose their jobs may see their family’s entire income evaporate overnight. Meanwhile, freelancers generally have more than one client (and income stream) at a time, and the chances of getting let go by several clients all at once are slim.

And while freelance work can dry up in a hurry during an economic downturn, there’s no guarantee that a full-time job is safer in such circumstances. During the last recession, more than 3,000 American companies conducted mass layoffs — just in February 2009 alone — according to the Bureau of Labor Statistics.

The sky is the limit.

A reliable salary is undeniably comforting, but freelancers, like all entrepreneurs, have the opportunity to take on as much work (and earn as much extra money) as they possibly can.

Forty-two percent of respondents in the eLance survey said they earn more money freelancing than they did before. Just make sure you have the discipline to save those excess funds to cushion any lean times.

While individual freelance work may not be all that stable, many self-employed workers choose to see their situation as a total package. Jobs will come and go, but most freelancers feel confident in their ability to replace expired work and find new work over time — 65% of the survey’s respondents said the Internet has made it easier to find freelance work. And in the end, the freedom that comes with their work situations appears to make it all worth it.

The Bottom Line

This shift in workplace structures is unlikely to stop any time soon. A recent report from Intuit predicts that freelancers could make up as much as 40% of the workforce by 2020, and that full-time jobs with benefits will be increasingly hard to find. Meanwhile, self-employment, personal, and micro businesses will thrive in the years to come, offering freedom from the chains that normally bind full-time employees, plus the potential for higher incomes and more autonomy.

If you haven’t considered a freelance gig yet, now may be the time to start thinking outside the box. Like it or not, the freelance economy is coming, and those who are ready will flourish.

Do you know someone who freelances for a living? Do you worry about the implications of a freelance economy in the future? 

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Holly Johnson

Contributing Writer

Holly Johnson is a frugality expert and award-winning writer who is obsessed with personal finance and getting the most out of life. A lifelong resident of Indiana, she enjoys gardening, reading, and traveling the world with her husband and two children. In addition to The Simple Dollar, Holly writes for well-known publications such as U.S. News & World Report Travel, PolicyGenius, Travel Pulse, and Frugal Travel Guy. Holly also owns Club Thrifty.