5 Economic Trends that Affect Freelancers

If you’re like me, you’re probably watching the news about the economy. Unfortunately, a lot of that news is bad (at least recently). You’re probably hearing about layoffs, companies in trouble, people losing their jobs, and to top it all off–prices going up.

As a freelancer, such news probably makes you nervous. You may be wondering if it’s really a good time to be a freelancer. You may even be thinking about returning to traditional employment.

Let’s face it, it’s normal to be a little nervous about the economy right now. This economy has a lot of people concerned…even nonfreelancers.

In this post, I’ll list five economic trends as they relate to your freelancing business.

Trend #1: More Freelancing Gigs

Companies are laying people off, but they still have work that needs to be done. So, how are they going to get that work done?

There are basically two ways a company can redistribute its workload after a layoff:

  1. Assign more work to existing employees
  2. Outsource to temporary workers (including freelancers)

While many traditional employees will see their workloads increase as a result of the economy, there’s a limit to how much more work an employee can take on and still remain effective. That’s actually good news for freelancers.

While corporations may not be willing to commit to hiring a permanent employee, many will turn to freelancers (and other temporary help) to complete their current and new projects. In fact, in many cases a company can actually afford to pay a freelancer more money than they would have paid to an employee.

Trend #2: More Freelancers

Another trend I’ve noticed is that the number of freelancers seems to be increasing quickly. The increase in freelancers is coming largely from three sources:

  1. People losing jobs and jumping into freelancing
  2. New graduates who give up on finding traditional employment
  3. Increased press coverage of freelancing

Naturally, some of these new freelancers are quite talented and well-prepared. Those individuals will likely succeed in their freelancing business.

However, due to the economy, a large number of new freelancers are driven by desperation. They aren’t really well prepared to freelance, but turn to it because they believe that it is their only option. They aren’t likely to be happy as freelancers.

When the economy improves, many of the unprepared freelancers will ultimately return to the traditional workplace.

Trend #3: Prepared Freelancers Win

The good news for me and you (and I put you in the prepared category because you obviously want to learn more about freelancing–you’re reading this blog) is that those who are prepared to freelance and who have a strong desire to freelance are likely to succeed.

Sure, some of the other freelancers may get a few gigs. But if those freelancers don’t deliver, they won’t be hired again.

A good, reliable freelancer, on the other hand, has a high value to the companies that they work for. They are likely to find themselves in demand–now, more than ever.

Trend #4: Keep Your Rate Up-to-date

As I noted earlier, consumer prices are rising. That means that it costs more for you to pay your bills.

What it also means, is that it’s very important for you to keep your rates up-to-date. Now is not the time to become the bargain freelancer.

If you haven’t raised your rates in a while, consider raising them as soon as it becomes practical. If you don’t you may find yourself worker harder and harder just to maintain your existing standard of living.

In fact, charging a living rate is one way to distinguish yourself from the freelancing short-timers. Charging a living rate is professional. It means you’re in freelancing for the long haul. The short-timers, on the other hand, are desperate. They may accept gigs for less than it costs them to live, but they won’t be able to keep that up.

Trend #5: There Are No Guarantees

The final point here is an important one. If the economy is scaring you, good. Everyone in business needs to be aware of the economic factors that might impact them.

However, the economy is not a reason to panic.

While you may think that returning to a traditional job is more “secure,” remember that there are no guarantees. Even traditional employees are losing their positions.

In my experience, owning a freelance business is more secure than traditional employment because you’re not tied to a single entity to earn your livelihood. If one of your clients goes out of business, it’s sad and may have a short-term impact on you. But in the long run, you’ll replace that client.

Your Turn

How do you think the economy is impacting freelancers? How has the economy impacted you?

Leave your answers in the comments.

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Comments

  1. says

    I think it’s a great time for freelancers, for a couple reasons you pointed out. There’s a lot more work out there for us because of the economy and if we can deliver/produce solid results, we will have no shortage of work. In a way, I think the economy has helped freelancers and other self-employed people.

  2. says

    Great points, Laura. Especially about the sole source of income. I started freelancing after being laid off twice in a 7-month period. I will never put all my eggs in one basket again!

  3. says

    Very positive post- I think this economy is full of opportunities for those of us who want to do things slightly differently. As well as the fact that communication in business has also changed and we’re (in Europe) finally moving away from the Industrial mindset of one person = one skill, with the right level of professionalism and commitment freelancers can set the pace these days…..would you all agree?

  4. says

    Great feedback!

    Catena Creations–With freelancing you definitely don’t have your eggs in one basket. :)

    Sinead Rafferty, There are a lot of opportunities out there.

  5. says

    To add to your Trend #1 – There are more freelancing gigs. You now have freelancers hiring freelancers. I’ve hired three writers in the last few months to help with my own in-house work so that I could focus on client work, etc.

  6. says

    DesignFacet–Is this a good thing or a bad thing?

    Stacey, I do think that freelancers are getting so busy that they need to hire others to help with their work. Thanks for sharing your experience on the matter.

  7. says

    It is really hard to get up and running as a freelancer and even current freelancers find it hard to continue the work and get the money to pay the bills. This is sad to think about but even with there been more competition you just have to be better and contact your target audience. Big freelancers tend to give up promoting there business and sometimes have to turn down jobs because they do not have enough time to continue this whilst completing current work so this is where you should try and take this opportunity and get work for yourselves. The way I look at it, freelancing is a one person job where you can be yourself and take your business the way you want to. Start it off as part time and get it up and running along with your current job and then move into doing it full time if you have the following. Freelancing gives you a lot of freedom with what you do in the job which is why I like it.

  8. says

    @Laura, It is a bad thing. Because majority of prospects no matter how much you educated them, their decision boils that to one thing ‘cost”. I do not compete on cost but neither do I want to loose an opportunity of acquiring a new client. This is were sales and marketing skills come in before design skills. We are in the business of service, then design. Clients are now educated and informed as to where they can get the same service at a cheaper price. Lowering the deliverables/scope of the project to fit prospect budget has no validity these days.

  9. keith says

    Do you still provide customer support for the Client Machine? I’ve e-mailed and Tweeted but received no reply.

  10. kookee01 says

    A marriage between Intel and Nokia could be just the move that the chipmaker needs to help it make an impact on the mobile market that has so far eluded it.-FXDD

  11. says

    Keith,

    I have nothing to do with the Client Machine–I’m just a freelance blogger here, not the owner of the blog.

    I believe the new owner may be able to answer your question. I’m not sure if he’s on Twitter. Here is a contact form: http://freelancefolder.com/contact/

    I’ll also try to alert him for you.

    Thanks for your comment.

  12. says

    I’m finding a lot of mixed news for freelancing in the editing and writing field. Yes, there are more jobs, but I find myself competing for those jobs against people who aren’t in U.S. or Europe and so need far less an hour than I do to make a living wage.

  13. says

    I completely agree on points one and two for sure – my leads have increased dramatically, but so too has the bidding war that follows. That said, it’s absolutely vital not to undervalue yourself. I did that back in 2008 when the first major layoffs started to come through and I was stuck in a hole for months trying to raise my rates with clients that had gotten used to the bargain basement offers.

  14. says

    This is a great list. I think one of the advantages I’ve actually seen with some of these trends is that good freelance writers who are willing to push forward and stand by their talent are more likely to find employers willing to pay a very impressive per page wage in today’s market. If you’re working for a serious client and you can provide good quality work on time it’s actually easier than I’ve seen it in years to build a strong clientele.

  15. Jessie says

    I fall under the category of “desperate freelancer,” but I’ve never been happier. I worked all kinds of jobs during college trying to stay above water.

    For all of fall 2011, I would go to work as a bartender from 5 pm – 2 am, bike a mile home, wake up to be at a second job from 7-10 am, with a class 10-11, then go home and sleep some more. It was miserable, the bartending part paid less than minimum wage, and I thought myself lucky because at least I had a job, unlike a lot of my peers.

    After the bar went under I turned to writing and editing to try and defray some of my living costs. Turns out, I don’t mind being up at 5 am working, and hustling to find clients, if I can stay home and work in my pajamas, or travel and work on a beach somewhere. To my surprise, I’m making a good living, and I’m never going back!

  16. says

    I’ve been seeing increased competition in my field of freelancing and unfortunately that means there’s been a war waged on rates as well. There are lots of overqualified people that are doing gigs for much less than they should be charging and it’s been driving me insane. Other than the loyal clients that want to work with me no matter what, it’s been challenging to retain and get new clients this year.

  17. Nabankita says

    Hey Laura.. Thanks for sharing the the trends. Being a writer in India, the rates are not very appreciating. I have been working as a freelance writer from past 5 months. I am a dental student by profession. I would like to seek some worthful advice from you to improve my freelance writing income. Thanks in advance! :)

  18. says

    Good clients will respect your rate and value you for your quality of work and service. Clients that are likely to not be worth your time are the ones who want ‘cheap’ services.

    A good client understands the term ‘you get what you pay for.’ Present yourself, your best work, and let it speak for you (testimonials/portfolio). As long as you deliver great work and good customer service, you will succeed, even in hard times.

    I plan to be a pro software engineer after I get my degrees, but already working on my website.

  19. says

    This design is steller! You definitely know how to keep a reader entertained.
    Between your wit and your videos, I was almost moved to start my own blog (well, almost.

    ..HaHa!) Wonderful job. I really enjoyed what you had to say, and more than that, how you presented it.
    Too cool!

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  1. [...] If you’re like me, you’re probably watching the news about the economy. Unfortunately, a lot of that news is bad (at least recently). You’re probably hearing about layoffs, companies in trouble, people losing their jobs, and to top it all off–prices going up. As a freelancer, such news probably makes you nervous Direct Link [...]

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