As of 2021, there were approximately 58 million freelancers in the U.S., comprising more than 1/3 of the U.S. workforce, and another 10 million professionals are considering entering what has become known as the gig economy.
While this growth in the freelance workforce began before the COVID pandemic, more than ever before, the pandemic allowed people to see that not only is remote work possible, in many cases it is preferable. Working as a consultant, temp worker, freelancer, or contractor offers a great deal of flexibility and freedom. After experiencing the benefits of remote work first-hand, many people don’t want to return to the traditional workforce.
Freelance, temporary, and contract workers are an important part of the workforce. Contract workers offer companies flexibility in staffing and help fill gaps to address seasonal needs, temporary needs related to business growth, or when permanent employees are on leave, sabbatical, or vacation.
Contract and freelance work opportunities are particularly attractive to jobseekers during recessions and economic downturns. For the jobseeker, the interview-to-hire process is often shorter, meaning you can be back to work more quickly. Even companies that have enacted a hiring freeze may still be taking on temporary or contract employees because this money often comes from a different budget than traditional salaries.
Close to 80% of full-time independent workers are independent by choice. More than half say they will not go back to a traditional job. In addition, 53 percent of full-time independent workers report they feel “more secure” working independently. This is perhaps a reflection that even traditional employment has no guarantees of stability.
And a growing number of contract positions are for remote work, removing geographic proximity from the requirements for working these types of positions.
Temporary contract positions — or freelance work opportunities — are an alternative to full-time, permanent work. Contract and temporary work can also be a side hustle to supplement your income.
Contract workers may be self-employed or may be contracted through an agency. Self-employed freelancers are responsible for their own taxes, insurance, and benefits, while agencies often employ contract workers as W-2 employees (handling the billing, paperwork, and taxes for the contract employee).
There is sometimes a perception that contract work is only for low-paying, lower-skill jobs. This isn’t true. There are contract opportunities available for almost any field and industry and for a wide variety of positions — up to, and including C-suite roles. Contract work opportunities are common in creative service professions as well as the information technology, financial services, and healthcare industries.
Jobs may be listed as “contract” or “temporary” — but these are not the same.
Contract positions are for a specified time period. Temporary positions, on the other hand, may not have a defined time period. Temporary workers may be directly employed by an employer, or may be employees of a temporary agency.
Contract workers, aka freelancers, unless hired through an agency or consulting firm, are independent contractors. This means you are responsible for your own taxes, insurance, and benefits. In essence, you are self-employed and the company you’re working for is your client.
One important distinction between permanent and contractor or temporary positions has to do with the Internal Revenue Service. IRS regulations dictate that the employer cannot have as much control over how a contract worker does his or her job as it would with a permanent employee. While the requirements of the position don’t change if it’s permanent or temporary, the employer can’t define how the work is done by a contract worker.
Advantages and Disadvantages of Freelance Work
Because it’s easier to find a job when you have a job, accepting a contracted freelance position makes you more attractive to prospective employers.
In addition, freelance work opportunities can often lead to a full-time, permanent position, especially if the opportunity is advertised as a “temp-to-hire” position. This type of arrangement allows a company to see if the individual has the skills, education, and personality the position requires before committing to a permanent position.
As with any type of position, there are advantages and disadvantages to contract and freelance work opportunities.
Contract work often offers no employment benefits (although limited benefits are sometimes available, especially if working through an agency).
Freelance contract opportunities are perceived to be less stable than permanent jobs.
Because of the risk of being accused of “misclassifying” contractors as employees by the IRS, contract workers may not be invited to participate in employee functions.
Where to Find Contract Work Opportunities
You might be surprised to learn that there is not much difference between pursuing freelance work opportunities and pursuing traditional employment. Freelance work opportunities can be found in many of the same ways as traditional job opportunities are found: networking, online job boards, and direct contact with prospective employers.
Find Freelance Work Online
When searching for contract opportunities online, look to the traditional large job boards such as Indeed.com, SimplyHired.com, CareerBuilder.com, Glassdoor.com, and Monster.com. Use search filters to identify contract and temporary roles (not all job boards offer “contract” or “temporary” as search filters, but many do).
Also consider specialized marketplaces, like FlexJobs.com, Outsourcely, WorkingNomads.co, or industry-specific job sites like Mediabistro, ProBlogger.com, Dribble.com, or Authentic Jobs (for creative and media opportunities) or Dice.com or Stack Overflow (for technology positions).
You can also find online job boards specifically for remote opportunities.
Some of these sites require a subscription to access job opportunities, but may also offer benefits, such as access to education and training.
Not familiar with marketplaces in your target industry? Search Google for “contract work” + your industry or “freelance jobs” + your industry and see what comes up. For example, a search of “contract work” + public relations yielded several online sites, including RemotePRJobs.com (a subscription site) and PeoplePerHour.com.
There are also online marketplaces to match freelancers with opportunities. These include sites like Fiverr.com, Guru.com, Freelancer.com, and Upwork.com. Some of the gigs posted are extremely short-term (a one-time project, or a one-week project), while others are contract opportunities lasting 3 months, 6 months, or longer.
Find Freelance Work Using Social Media
You can also search LinkedIn for contract work opportunities. One of the search criteria is “Job Type” and both contract and temporary positions are available in the search. (If applicable, also choose the “Remote” search criteria to expand beyond your current geographic area.)
You can also check out Company Pages on LinkedIn and see what other companies LinkedIn recommends you connect with or follow.
Word of mouth is consistently reported as one of the top ways to secure contract work. Staying connected with previous co-workers and supervisors on social media ensures you are top-of-mind when a contract opportunity comes about.
If you are unemployed, be sure to let your network know you are open to contract work opportunities.
Find Freelance Opportunities Through Direct Contact
Another source of contract opportunities is previous employers. This is especially relevant if your current position was eliminated due to an economic downturn. Your previous employer may be interested in hiring you as a contract employee. The funding for this work may be available from a different budget line item.
While you may not be able to get as many hours as you would as a full-time employee, you already know the job, and that makes this option attractive to your previous employer too. And you’ll be in a position to be re-hired full-time in the future if the economic situation changes.
Find Freelance Opportunities Through Consulting Companies and Agencies
There are a number of agencies and consulting firms that help connect contract workers with employers. Some of these specialize in particular industries, while others serve a wide variety of independent workers.
Business management firms for contract workers, can not only help facilitate a match between a contract worker and an employer, but also help handle billing and paperwork related to contract employment. Some even offer the opportunity to participate in benefit programs, such as health insurance and retirement plans and/or offer liability insurance.
Some possible sources include:
Other firms act as the “Employer of Record” (EOR) for companies, handling the administrative, compliance, and financial logistics for employing contract workers.
Some of these firms include:
Prepare Your Freelance Resume and Other Marketing Documents
Regardless of how you look for freelance work opportunities, you will need to write a freelance resume. This often requires you to create the resume using a different format than you might if you were looking for a traditional employer. Your focus on finding freelance opportunities should be clear with just a glance at your new resume.
Also, take the time to build out your LinkedIn profile and refocus it to emphasize your focus on freelance work. Other career marketing documents that you might find helpful as you pursue freelance work are a professional biography and a professional references dossier
It is almost always worth the investment in hiring a professional resume writer to help you prepare these documents. If you are at all overwhelmed, reach out to Distinctive Career Services for professional help.
Important Considerations for Contract Workers
As a contract worker, there are some things you may not have had to consider previously but that will now need to be addressed.
Scope of Work Agreement (SWA
One of the most important documents for contract workers is a Scope of Work Agreement (SWA). This written agreement outlines the details of the arrangement between the contract worker and the employer. The agreement should state that the arrangement is one between an independent contractor and the contracting company.
The contract should also specify — in writing — what the specific responsibilities and deliverables are, including deadlines. The SWA may also outline the specific timeframe for the contract arrangement and should detail the amounts and timing of payments, including when payments are due and what happens if payments are not made.
Finally, it should clarify ownership of the work being performed. Does the contract worker or the hiring company own the work? Both parties should sign and retain copies of the SWA.
One of the disadvantages to contract work is a lack of benefits — in particular, retirement and health insurance. In the same way that you should secure your own health insurance, you should fund your own retirement plan.
One of the biggest differences between permanent employment and contract employment is taxes. If you are employed through a staffing agency or Employer of Record, that organization may assist with tax compliance.
If, however, you are self-employed, you are responsible for withholding and submitting your own taxes, including quarterly estimated taxes. You should consult with a qualified tax advisor to ensure you set aside and remit the correct amounts to the state and federal governments.
The Future of Freelance Work
Contracted freelance work is expected to continue to grow in the coming years, especially as remote work opportunities become more available. Technology increases the opportunities to not only perform job responsibilities but also find contract opportunities and handle the billing and paperwork associated with working independently.
Contract work is especially appealing to skilled professionals, aging baby boomers who are looking for more control over their time in their pre-retirement years, and millennials who like the flexibility of contract work.
Employers also find a contract work arrangement to be beneficial, giving them access to skilled workers who want more control over their time and income. And because contract workers can be employed on an as-needed basis, it gives employers the flexibility they need to respond to changing economic situations.
The future of work is likely to be more fluid. Instead of a series of long-term, permanent positions, workers may find themselves shifting between independent work and traditional employment. Some industries, such as the film industry, have provided a model for team- and project-oriented work for many years. Research suggests this is likely to become more common in other industries, such as information technology, healthcare, and government services.
So whether you’re considering contract work as a bridge between permanent positions or a new way of working, you’re part of a trend in the workforce.