The Rise of the Freelance Economy


In 1995, according to the Bureau of Labor Statistics, 93% of the American workforce consisted of full- and part-time employees managed by an HR department. That number stayed relatively the same for the next decade, with only minor fluctuations in staffing needs. But in the past five years, we’ve seen a paradigm shift in the workplace. In the two decades since those numbers were published, the American workplace has gone through a transition so drastically different from its previous incarnation that it’s been called the “Industrial Revolution of our time.”

Those are some serious allegations. As anyone who has taken a high school history class can attest to, the Industrial Revolution was the biggest game-changer to hit the modern world. It literally sent the world into overdrive: increasing productivity growth exponentially, replacing manpower with machinery, and giving birth to the division of labour. Alone, any one of these changes would have been something to write home about. But together, this triumvirate more than earned its descriptive title: it was radical, subversive and disruptive. It was the very essence of a revolutionary.

With that in mind, doesn’t it all seem a bit too Paul Revere of us to be heralding the dawn of another revolution?

Maybe not. The workforce is going through a dramatic change. Twenty years ago, 7% of the American workforce described themselves as freelancers. In 2014, 53 million Americans — that’s 34% of the American workforce — described themselves as freelancers. That number is predicted to increase to 50% by 2020. Let that sink in for a moment.

In less than five years, half of the American workforce will be independent workers.

To clarify, “independent workers” is a more formal term used to describe the colloquial catch-all “freelancers.” It’s loosely defined as individuals who are engaged in supplementary, temporary, or contract-based work, and includes independent contractors, moonlighters, diversified workers, temps and freelance business owners.

While these workers all fall under the freelance umbrella, they have specific differences:

freelancer info

With half of the workforce set to fulfill one of the above five roles within the next five years, let’s talk about some ways in which your business can use the rise of this new economic order to its advantage.

The biggest change we’ve seen is the reinvention of the career path. Rather than existing as a linear point A, point B straightaway, it’s become a winding map with multiple pit-stops. The traditional thinking in business for the past few decades has been to hire the best of the best university graduates, spend the next 25 years grooming them to be the strongest fit for your company, and then promote them to management over time.

While that school of thought isn’t completely dead yet, more often than not, the company you start your career in as a young professional won’t be the one you retire at. Considering that 90% of startups are doomed to fail, coupled with the fact that the average age of a startup employee is below 30, young professionals are will be bouncing around jobs for a while before settling down at one workplace. That’s why it’s more important than ever to stand out as a young professional: visibility equals hire-ability.

Teamwork. Three young architects working on a project

Plus, even if you decide to work at a traditional 9 to 5 workspace with benefits and all, you’ll probably still contribute to the freelance economy in some form. Whether your company outsources its content marketing or you moonlight to supplement your income, freelancing has become an inescapable element of the new work-world order.

Here’s the thing about paradigm shifts: they don’t come knocking on your office doors with how-to manuals and offering baked goods like nice new neighbours. They’re more like the construction crew that shows up outside of your bedroom window at 7 a.m. to rip up the street in front of your driveway. You don’t know when they’re coming; you just know when they’ve come (namely because they’ve completely disrupted your life).

So, rather than getting caught in your PJs and slippers, confused and rubbing your eyes, let’s look at some ways you can be prepared for the incoming disruption:

  1. GET (H)APP(Y)

If you’re considering freelancing (or hiring some freelancers), whether it’s full-time or on the side, you’re going to need to download some apps. The reason that the freelance life has become so feasible is directly related to the increase in connectivity tools and apps that allow freelancers to link in directly with potential employers.

Apps like Uber and Lyft have cut out the middle-man in the taxi equation, allowing customers to connect with drivers without a dispatcher, and in the process, have shifted the power dynamic considerably. Task Rabbit takes that model one step further — becoming the “Uber for everything,” it allows you to outsource chores to freelancers.

Websites like or take the freelance marketplace online, allowing you to join in as either a contractor or a contractee, complete with bargaining tools and bulk orders. On the other hand, took the money out of the equation, offering a place for micro-jobs like business card design, resumé consultation or HTML assistance for a $5 flat-rate, but it can be increased depending on the complexity.

While you’re at it, try moving away from internal emails to chat apps like Slack. Tons of companies like eBay, Sony and Yelp have already made the jump to the platform — why not give it a try?


According to the U.S. Labour Department, between 1996 and 2000, output per hour grew at an annual rate of 2.75%. This was attributed to the introduction of the Internet to the workplace, and these numbers were often cited as proof for the “Internet-productivity miracle.” For comparison, even during the Industrial Revolution, productivity growth in Britain never even reached an annual rate of 1.5%.

Fast forward to today, and now we’re seeing that the opposite is true: in the last quarter of 2014, productivity actually fell 2.4%. Workers were 2.4% less productive than they had been before — and it has only gotten worse. In the first quarter of 2015, productivity fell another 1.3%.

While the Internet may have helped to boost productivity in the workplace at the beginning, the integration of the Internet with personal social networks and click-hole websites like BuzzFeed, Gawker, and Cracked have made it much harder to stay focused. Plus, even when you think you’re being productive by checking your email, you’re actually just getting bogged down — the average employee spends 15 to 20 hours a week checking their email, and nearly 4.5 hours of that time is spent on irrelevant content.

To combat that, think about turning it all off. At least once a day, try to unplug. You might loathe it at first, but by tuning out from the chatter online for even a small amount of time, you’ll notice your productivity levels increase.


We’ve touched on this in-depth with our other post, “The Benefits of a Co-Working Space for Entrepreneurs,” but it’s worth highlighting once again. Whether you’re hiring temps, you’re freelancing full-time, or you’re the owner of a small freelance business, joining a co-working space is a good idea.

Having a place where you can go in a few days a week to focus or a space that can scale up or scale down depending on how many contract workers you’ve got working with you that month is a great way to maintain structure in your ever-changing work environment. The flexibility of the space allows you to change with your workforce and load in a way that the traditional office space isn’t able to. You should jump on any chance to stay ahead of the game!

The workforce is already looking more different than ever. Whether you’re joining in as a freelancer or looking to integrate freelancers into your business, it’s important to remember that this new freelance economy isn’t transitory. While the contracts and projects may be temporary, the doors that they can open to bigger and better opportunities are most definitely not!

The most important tool for a freelancer is his or her own brand. Freelancers are strategic, experienced and professional, and it’s your job to make sure that any potential employers know that. Take a look at our free eBook for some tips on how to leave a powerful lasting impression online.


Mike Valenti

About Mike Valenti

Skiing, content and tomfoolery are my three main ingredients in life.

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