How Freelancers and Small Businesses Are Helping One Another Thrive
Not only are freelancers making enough to earn a good salary, they’re also helping small businesses grow.
PHOTO CREDIT: Getty Images
You can't read an economic report these days without some mention of the gig economy or the "side hustle." While for many people a traditional job provides their primary income, more and more of us have a freelance gig--using sites like Upwork, Guru, and PeoplePerHour to find work.
According to new data from a report by my company Fundera, a marketplace for small business financial solutions, hundreds of thousands of people have freelance jobs in fields varying from design and writing to accounting and data science--adding up to millions of freelancers, some of whom make over $60 an hour for their services. In fact, a large chunk in particularly lucrative fields make over six figures.
Not bad for a side hustle.
The most surprising part of the data isn't that some very talented people can make a good deal of money working in a field they're skilled in. It's that many of these freelancers make their living working with small businesses.
We often think of small businesses as teetering on the brink of failure. Many of them don't make it past a few years in business; they are being crowded out by mega-businesses like Amazon.
Yet there may be something of a symbiotic relationship between this emerging freelancer class--many of whom skew young--and small businesses that wouldn't otherwise be able to afford the kind of work these side hustlers do.
Take the number one gig on the report's list: Web and software development. Small businesses these days know they need a mobile-responsive, beautiful, fast website to keep pace in the increasingly digital economy. Their web design needs won't typically go much further than that. So, as the report notes, they hire freelancers:
Hiring an in-house developer or web designer is not a possibility for most small businesses, with the average developer making an annual salary of $104,300. Plus, most small businesses have a need for software development on a one-off basis. That kind of irregularity fits nicely into the workflow of a freelancer with multiple clients.
Sometimes the issue isn't cost as much as fit. The number two gig on the list with over 600,000 freelancers--creative and design--is an urgent need for small businesses as well, but not so much that they need to hire a team.
For big businesses, hiring a creative agency to handle their design and branding needs is just the cost of doing business. And while a small business might also enjoy having an entire agency at their disposal, their needs more often call for a targeted approach, where they can pivot and move nimbly as new projects arise.
In fact, nearly every gig on the list made it there due to being able to strike a balance between cost-effective and more targeted. I.T. and networking freelancers (the highest paid group of freelancers on the list) can "provide highly specialized services for businesses that aren't tech savvy." Writers can create affordable blog content for small companies looking to ramp up their digital marketing campaigns. And small businesses have long relied on freelance accountants and bookkeepers, especially during tax season.
Meanwhile, there is upside for freelancers beyond the money. Whether they're just starting out on a new career path or taking on additional gigs in addition to their full-time job, freelancers working with small businesses gain more experience, broaden their expertise, and create new connections they can leverage later in their careers.
The fit isn't perfect, of course. While freelancing is popular, many rightfully worry that it lacks the security and benefits of a full-time role. Also, small businesses may increasingly find themselves priced out of high-quality work and be forced to use inexperienced freelancers who enter the workforce looking for a quick gig.
Some freelancers strike it big and get a cushy gig with a large corporation looking for an outside perspective (which they can quickly move on from if things don't work out), particularly in fields like design and data science.
For the vast majority of the gig economy, however, it appears that it's little guys--individuals and small ventures-- banding together and keeping each other in business. As the economy hums along and more people bring their skills to this expanding marketplace, both sides of that equation will continue to benefit.