The freelancing industry is a fascinating one. Its break-neck growth in recent years has been astounding. People from every walk of life are now considering freelancing as a permanent career option. Let’s look at what the sector is currently like and how freelancing will change in the upcoming decade.
Why does the number of freelancers keep growing?
Freelancing is growing because of the seismic changes in the global labor markets. In-house 9-to-5 employment is no longer the only way to earn a good income. Digital work platforms and online talent marketplaces have initially commoditized access to top-caliber talent. Remote work further persuaded both employers and employees that labor can be productively done from anywhere.
This new degree of autonomy and flexibility made workers question their earlier career choices — and employers wonder why they haven’t used freelancers before!
What we see, as a result, are the rising rates of freelancer supply and demand.
- 36% of Americans now identify as independent workers. France, Germany, and Spain now have an estimated 3.27 million freelance knowledge workers.
- 43% of US business owners plan to hire freelancers in 2020 to fill talent gaps. In the MENA region, 7 in 10 employers plan to do the same.
In short, more employees are empowered to work solo and more employers are willing to higher independent talent.
OK, so what is the future of freelancing be like from now on?
That’s a good question, but not an easy one to answer. Because no one can tell the future, only guess it.
At Xolo, we did a fair bit of research to map the global freelancing trends into a visionary picture. We believe the future of freelancing will be defined by four factors:
- Growing preference levels for independents among employers
- Expansion of freelancing into new industries
- Multiplication of purpose-built products for freelancers
- Greater legislative support and social protections
Now, let’s zoom in on each trend.
Change in employer attitudes: From acceptance to preference
These days, companies are more likely to recognize freelance talent as the true powerhouse it has become.
A 2022 survey by MassChallenge, says that 73% of tech companies now operate “blended teams,” made up of full-time employees and freelancers. Among those remote team managers, 71% agree that freelancers and independent contractors have significantly increased their business agility.
Freelancers’ work ethics, market experience, and modern thinking are all assets that companies want to benefit from. According to the “The Future of Workforce” report by Upwork, the sweeping majority of employees agree that:
- 79%: Working with independents promotes innovation within their businesses
- 85%: Partnerships with freelancers enable access to specialized skills or expertise
So unsurprisingly, a sound 66% of employers plan to increase their reliance on freelancers over 2023-2024.
Given the turbulent macroeconomic developments, companies also have to be more flexible – and frugal – in their approaches to talent management.
Globally, 85 million jobs can be left unfilled by 2030 due to ongoing skills shortages.
Yet top-tier, highly-specialized talent is hard to hire and retain. Smaller employers are priced out by Big Tech firms in the ongoing battle for technology specialists, as well as non-technical people required to support software products.
At the same time, not all employees are really keen on accepting full-time office jobs (even amidst a likely recession). On the contrary, 60% believe that fewer people will have stable, long-term employment in the short-term future.
Instead, we’ll be heading into the future of work where according to PwC:
“Big business has been outflanked in a digital-enabled world that’s teeming with small entrepreneurial companies. Digital platforms match workers with employers, skills with demand, capital with innovators, and consumer with suppliers. This allows serial entrepreneurs to reach far beyond their size in terms of influence and scale.”
And the above scenario doesn’t sound as futuristic when you look at it through the context of current benefits freelancers generate for businesses such as:
- Reduction of the amount of capital required for innovation
- Performance maximization across peaks and troughs in demand
- Risk reduction in economically uncertain markets
- Promotion of efficiency-driven economic performance
Or, in the words of Irish researcher Andrew Burke: “Freelancers are unique economic agents in their own right who can add significant value to organizations throughout all the stages of innovation development” — and more and more employers are recognizing this trend.
Diversification of freelance niches
As freelancing becomes more accepted by employers, new well-paid niches will emerge — and more digital freelance platforms will facilitate employment.
We expect a particularly bright future for freelancing in the following industries:
- Healthcare. The rise of telehealth platforms and innovative healthcare apps opens new career possibilities for medical professionals. Dermatologists can freelance with skincare startups (like Curology or Hers) to handle online prescriptions for personalized products. Or explore new opportunities in the booming dermacosmetics market set to smash $25,7 billion by 2032. Mental health counselors have no shortage of online therapy platforms to join now and until 2030 as the market will continue growing at a CAGR of 14.27%.
- Event industry. After a temporary slump, the events industry is back on the growth track. In Europe alone, the events industry is set to generate $123,9 billion by 2030. And where there’s growth, there’s a need for more talent. Photographers, videographers, florists, planners, stage managers, and lighting specialists will likely enjoy a spike in demand for their services. Plus, some new professions will likely come to the fore like AR/VR artists, omnichannel experiences managers, virtual music curators, and perhaps even NFT gallerists.
- Language learning. Foreign language tutoring is already a popular freelance job. But as the online language market continues to evolve digital-savvy bi- and tri-lingual folks would be able to expand their service portfolio. We anticipate an upcoming demand for creating VR/AR language courses, content for voice assistants and chatbots, and other multimedia educational content.
Discover even more in-demand freelance skills and professions!
More tailored products for independent workers
In the early 2010s, freelancers had to get by with resources designed for small businesses or in-house teams. As the freelance economy grew bigger and bolder, better-tailored products started to emerge.
From online freelance marketplaces to freelancer management platforms (like Xolo Teams!), solopreneurs now have an abundance of fantastic support systems for their businesses and lifestyle!
In the second half of the 2020s, we also predict the following global freelancing trends:
- Further proliferation of freelance marketplaces from all-purpose ones like Upwork to highly-specialized talent match-making platforms like MarketerHire or BigCloud.
- Freelancer-friendly insurance deals for professional liability and health with global coverage (for those living the digital nomad lifestyle).
- New remote worker visa programs opening up around the globe to attract location-independent workers (and their families). Countries like Malaysia, Spain, Indonesia, and Italy have announced new remote visa programs at the end of 2022 – and more will likely join soon!
- Co-living spaces as the next step of the earlier coworking boom. Combining leisure and work facilities, coliving spaces keep spurring in digital nomad hotspots, as well as tech hubs with limited rental inventory availability.
- New financial products. The early wave of digital-only business banks like N-26, Revolut, and Shine significantly commoditized the cost of maintaining a multi-currency bank account. In the next five years, we expect bigger banks to join the game with fully digital customer onboarding and solopreneur-friendly financial products. Think more automated cash flow management, robo-investing tools, and more affordable cross-border payment processing.
On our end, we also expect to become an even better partner to our global community of Xolopreneurs — and add new competitive features to Xolo Leap and Xolo Go!
Better protection from exploitation
As more people start freelancing, regulatory bodies around the world are finally issuing some helpful legislation.
For example, the rise of freelancers in the UK has not gone unnoticed by the UK Government. In response to this, it has placed a strong emphasis on self-employment in its ‘Good Work Plan.’ This sets out a package of workplace reforms over the next 20 years to meet the changing world of employment.
The European Commission, in turn, developed a series of proposals for protecting digital platform workers (both engaged in gig-based and regular online work). The upcoming legislature is primarily aimed at improving the working conditions of the digitally employed, clarifying their classification with the employers, and increasing transparency in the usage of platform algorithms.
The Swedish government, in turn, has proposed changes to the Work Environment Act. These are meant to extend the obligation of employers to perform systematic work environment management to freelance, self-employed, and contract-based workers. In simpler words — provide them with better working conditions and extra social protections.
The Philippines parliament also approved a new bill, which better protects freelance workers against poor or unsafe working conditions. Specifically, it now mandates hazard pay and night shift differential pay for independents.
Our hunch is that more modern legislation will become one of the defining freelancing trends in the second part of the 2020s and onward. Perhaps, we’ll see even more governments launching e-Residency programs (like the one in Estonia!) to attract, protect, and empower local and foreign digital workers.
Is remote work the future too?
A resounding “Yes!” Remote work will remain the “norm” and continue to gain popularity. In 2022, 58% of US workers (or 92 million people) already work from home at least once per week. By 2025, an estimated 36 million Americans (approximately 22%) will work remotely full-time.
Another forecast by Global Workplace Analytics, says that 70% of the workforce will work remotely at least five days a month by 2025. An earlier survey from Tata Consultancy Services (TCS) counters that as much as 40% of global workers will work remotely full-time by the same year.
Though the stats differ, the trend is clear: Remote work will remain an option because that’s how most people prefer to work. 75% of Millennial and Gen Z workers name hybrid or remote work as a preferred arrangement. Moreover, with the severe global talent crunch, more employers are willing to hire remote workers and permanently operate as blended teams. Combined, these factors make remote work, not just the “future,” but a “future continuous.”
Why a recession will boost remote work?
Recession often means job cuts — and these will likely happen, but not among remote workers. As remote work leads to cost savings and productivity improvements, even the die-hard opponents start to re-assess their views.
Most are rationalized by the hard numbers about the remote work benefits:
- 3X productivity gains in remote work-friendly industries like IT and finance over the last decade
- Companies with greater worker autonomy and flexibility produce more innovation
- 64% of employees at Big Tech firms are ready to pass on a $30K raise in favor of performant work from home
In other words: Employers can run leaner, more productive, and more cost-effective teams by keeping them remote. And that’s just the kind of combo most need during the recession.
The future of freelancing assumes new workforce market dynamics where:
- Businesses find it more cost-effective to hire freelancers for specific tasks or projects, rather than retain full-time employees
- Employees are increasingly choosing to work remotely or freelance part- or full-time to have greater flexibility and control over their work lives
- Full-time solopreneurs, in turn, enjoy a hired demand for their services and continue to scale their freelance businesses
In response to this new market dynamics, new public and private resources emerge, ranging from favorable legislature and visa policies to extra tools for remote collaboration, finance management, tax reporting, and other business admin tasks.
And what do you think the future of the freelancing industry holds?
Elena Prokopets writes content for tech-led companies & software development businesses, marketing to them. Her empathy for the customer, expertise in SEO, and knack for storytelling help create content that ranks well and drives industry conversations.
Elena uses Xolo Leap so she can focus on her solo B2B content writing business without stressing over the compliance and admin overhead.