Momentum Behind Wave of Independent Workers Is Growing Despite Challenges, With 27 Million Expected to Enter Self-Employed Workforce by 2020
FreshBooks, the #1 accounting and invoicing software in the cloud designed exclusively for self-employed professionals and their teams, today announced results from its 2nd annual “Self-Employment Report”. The data suggest a dramatic shift in the American workforce, whereby the number of Americans working for themselves could triple, bringing the total population of self-employed professionals to 42 million by 2020. For this year’s report FreshBooks, in conjunction with Research Now, surveyed more than 2,700 people in the U.S. who work full time – either as traditional employees, independent professionals, or small business owners.
A Paradigm Shift in Real Time
“The data suggest that over the next two years, the number of self-employed professionals in the U.S. could triple,” said Mike McDerment, co-founder and CEO at FreshBooks. “Whether or not change occurs at this pace, it’s clear the mindset of the American worker has shifted. With significantly more people aspiring to work for themselves versus holding a traditional job, it’s critical that we build a world to support them. To do that well we need all the data we can get.”
Dan Loeb's Third Point returned 11% in its flagship Offshore Fund and 13.2% in its Ultra Fund for the first quarter. For April, the Offshore Fund was up 1.7%, while the Ultra Fund gained 2.3%. The S&P 500 was up 6.2% for the first quarter, while the MSCI World Index gained 5%. Q1 2021 hedge Read More
Millennials Continue to Change Everything
Now the largest generational cohort in the United States, it’s no wonder millennials are setting and bucking trends with every activity they do and every philosophy they subscribe to en masse. Their opinions about workplace culture are no different.
- Of the next 27 million independent workers, 42 percent will be millennials. This finding bucks Bureau of Labor Statistics figures that suggest most self-employed workers of the past have been older. This number also represents growth upon the current self-employed population, of which just 18 percent are millennials.
- The next wave of independent workers will also be more ethnically diverse than the existing contingent of self-employed professionals. The 27 million new independent workers will exhibit a higher percentage of African American, Asian, and Hispanic workers than that of the existing independent cohort.
- Newcomers to the independent workforce are also slightly more educated than the existing self-employed group. The next 27 million will have a slightly higher rate of bachelor’s degrees and master’s degrees, while the rate of self-employed professionals with no college will fall.
Autonomy Is the Greatest Motivator
Americans are choosing to move away from traditional 9-to-5 jobs because they feel independent employment allows for more freedom.
- Twenty percent of those entering the independent workforce plan to change their careers once they begin working for themselves, suggesting the ability to change their career trajectory is a strong motivator.
- Forty-three percent of respondents feel becoming self-employed will give them more control over their career. Nearly one-third of respondents also selected “Family reasons” as a motivating factor, while 55 percent expect to have better health after becoming self-employed, lending credence to the idea a stronger work/life balance is part of gaining more control over their careers.
Incoming Independent Workers Are Preparing for Satisfying, Yet Difficult Work
While increased freedom is a major benefit of self-employment, most who are either currently self-employed or plan to be soon understand with great freedom comes great responsibility.
- Fifty-nine percent of professionals who plan to switch to self-employment expect they will have to work harder once they move to independent work.
- A higher proportion (71 percent) of existing self-employed professionals report enjoying overall career satisfaction, compared to 61 percent of traditionally employed individuals.
- Nearly 65 percent of currently self-employed professionals between the ages of 50 and 65 report wanting to work longer, as opposed to retiring. Millennials seem to understand this is now commonplace behavior, as 62 percent of self-employed people in that generational cohort plan to work beyond the age of 65.
Despite Increased Control, Self-Employed Professionals Still Have Needs
Self-employment may offer greater autonomy over one’s life and work, but independent workers must still contend with challenges as they start and build their new careers.
- Ninety-seven percent — up 10 percent from 2016 — of current self-employed professionals have no desire to return to traditional work, and 70 percent are actively trying to grow their businesses. This growth does not come without challenges.
- Self-employed professionals report that finding talented staff or contractors and acquiring new customers are the most difficult challenges they face as they attempt to grow their businesses (27 percent and 23 percent respectively).
- Just nine percent of self-employed individuals feel the federal government represents their business needs well, down from 17 percent in 2016.
- Very few (10 percent) of independent workers “strongly agree” they take advantage of data to make business decisions, and 20 percent either disagree or strongly disagree they leverage data to help their businesses.
FreshBooks conducted this study in collaboration with Research Now. More than 2,700 people who work full time – either as traditional employees, independent professionals, or small business owners – were surveyed online in November of 2017. Samples have been weighted (as required) to reflect various characteristics of their target populations (e.g., age, gender and industry) leveraging data from the U.S. Census, U.S. Small Business Administration, the NAICS Association and other sources. The study’s margin of error is +/- 2.3% at 95% confidence.
FreshBooks is the #1 accounting software in the cloud designed exclusively for self-employed professionals and their teams. The company has helped more than 10 million people worldwide process billions of dollars with its ridiculously easy-to-use invoicing, time tracking, online payments and expense management features. Recognized with eight Stevie awards for best customer service in the world, the company’s mantra is to “execute extraordinary experiences everyday.” Based in Toronto, Canada, FreshBooks serves paying customers in 160 countries. www.FreshBooks.com