According to the 2012 Freelance Industry Report compiled primarily about North America freelancing, nearly half of freelancers do writing work, with 18% of freelancers listing writing as a primary skill, 10% editing/copy-editing, and 10% as copy-writing. 20% of freelancers listed their primary skills as design. Next on the list was translating (8%), web development (5.5%), and marketing (4%). Elance, a web platform that connects freelancers with contractors, surveyed its members and 39% listed writing and editing as their main skill set.
Depending on the industry, freelance work practices vary and have changed over time. In some industries such as consulting, freelancers may require clients to sign written contracts. While in journalism or writing, freelancers may work for free or do work "on spec" to build their reputations or a relationship with a publication. Some freelancers may provide written estimates of work and request deposits from clients.
Payment for freelance work also depends on industry, skills, and experience. Freelancers may charge by the day, hour, a piece rate, or on a per-project basis. Instead of a flat rate or fee, some freelancers have adopted a value-based pricing method based on the perceived value of the results to the client. By custom, payment arrangements may be upfront, percentage upfront, or upon completion. For more complex projects, a contract may set a payment schedule based on milestones or outcomes. One of the drawbacks of freelancing is that there is no guaranteed payment, and the work can be highly precarious.
In writing and other artistic fields, "freelance" and its derivative terms are often reserved for workers who create works on their own initiative and then seek a publisher. They typically retain the copyright to their works and sell the rights to publishers in time-limited contracts. Traditionally, works would be submitted to publishers, where they would become part of the slushpile, and would either elicit an offer to buy (an "acceptance letter") or a rejection slip.
People who create intellectual property under a work for hire situation (according to the publishers' or other customers' specifications) are sometimes referred to as "independent contractors" or other similar terms. Creators give up their rights to their works in a "works made for hire" situation, a category of intellectual property defined in U.S. copyright law — Section 101, Copyright Act of 1976 (17 USC §101). The protection of the intellectual property rights that give the creator of the work are considered to have been sold into a work for hire agreement. of employees, however in a contractual rather than employment relationship.
The total number of freelancers in USA is inexact, as the most recent governmental report on independent contractors was published in 2005 by the U.S. Department of Labor Bureau of Labor Statistics. At that time, there were approximately 10.3 million United States workers (7.4% of the workforce) employed as independent contractors of all sorts. In 2011, Jeffrey Eisenach, an economist at George Mason University, estimated that number of freelancers had grown by one million. While in 2012, the Aberdeen Group, a private research company, estimated that 26% (approx. 81 million) of the United States population was is a part of the contingent workforce, a category of casual labor that includes freelancing.
In 2013, the Freelancers Union estimated that 1 in 3 workers in the United States were self-employed (approximately 42 million), with more than four million (43%) of those self-employed workers members of the creative class, a stratum of work specifically associated with freelance industries, such as knowledge workers, technologists, professional writers, artists, entertainers, and media workers.
The total number of freelancers in UK is also inexact; however, figures from the Office of National Statistics show that people working mainly at or from home rose from 9.2% in 2001 to 10.7% in 2011. It has been estimated that there are approximately 1.7 million freelancers in the UK, however.
Freelancing is a gendered form of work. The 2012 Freelance Industry Report estimates that more than 71% of freelancers are women between the ages of 30 and 50. Surveys of other specific areas of freelancing have similar trends. Demographic research on Amazon Mechanical Turk reveals that the majority of North American Mechanical Turk workers are women. Catherine McKercher's research on journalism as a profession has showcased that while media organizations are still male-dominated, the reverse is true for freelance journalists and editors, whose ranks are mainly women.
Freelancers have a variety of reasons for freelancing, the perceived benefits differ by gender, industry, and lifestyle. For instance, the 2012 Freelance Industry Report reported that men and women freelance for different reasons. Female survey respondents indicated that they prefer the scheduling freedom and flexibility that freelancing offers, while male survey respondents indicated they freelance to follow or pursue personal passions. Freelancing also enables people to obtain higher levels of employment in isolated communities.
Freelancing is also taken up by workers who have been laid-off, who cannot find full-time employment, or for those industries such as journalism which are relying increasingly on contingent labor rather than full-time staff. Freelancers also consist of students trying to make ends meet during the semester. In interviews and on blogs about freelancing, freelancers list choice and flexibility as a benefit.
Freelancing, like other forms of casual labor, can be precarious work. Websites, books, portals and organizations for freelancers often feature advice on getting and keeping a steady work stream. Beside the lack of job security, many freelancers also report the ongoing hassle of dealing with employers who don't pay on time and the possibility of long periods without work. Additionally, freelancers do not receive employment benefits such as a pension, sick leave, paid holidays, bonuses or health insurance, which can be a serious hardship for freelancers residing in countries such as the US without universal health care.
Freelancers often earn less than their employed counterparts. While most freelancers have at least ten years of experience prior to working independently, experienced freelancers do not always earn an income equal to that of full-time employment. Based on feedback from members, it soon becomes apparent that web portals such as Freelancer.com tend to attract low paying clients that, although demanding very high standards, pay ~$10 per hour or less. Low-cost suppliers frequently offer to work at rates as low as $1–$2 per hour. Because most projects require bidding, professionals will not bid because they refuse to work at such rates. This has the effect of reducing the overall quality of the services provided.
According to research conducted in 2005 by the Professional Writers Association of Canada on Canadian journalists and editors, there is a wage gap between staff and freelance journalists. While the typical Canadian full-time freelancer is female, between 35-55, holding a college diploma and often a graduate degree, she typically earns about $29,999 Canadian dollars before taxes. Meanwhile, a staff journalist of similar age and experience level working full-time at outlets such as the Ottawa Citizen or Montreal Gazette newspapers, earned at least $63,500 Canadian dollars that year, the top scale rate negotiated by the union, The Newspaper Guild-Communications Workers of America. Given the gendered stratification of journalism, with more women working as freelancers than men, this disparity in income can be interpreted as a form of gender pay gap. The Professional Writers Association of Canada report showed no significant difference between the earnings of male and female freelancers, though part-time freelancers generally earned less than full-time freelancers.
Working from home is often cited as an attractive feature of freelancing, yet research suggests working from home introduces new sets of constraints for the process of doing work, particularly for married women with families, who continue to bear the brunt of household chores and child care despite increases in their paid work time. For instance, three years of ethnographic research about teleworkers in Australia conducted by Melissa Gregg, a Principal Engineer and Researcher in Residence for the Intel Science and Technology Center for Social Computing at UC Irvine, raises concerns over how both physical isolation and continuous access enabled with networked digital media puts pressure on homeworkers to demonstrate their commitments through continual responses by email and to conceal their family or home life.
The Internet has opened up many freelance opportunities, expanded available markets, and has contributed to service sector growth in many economies. Offshore outsourcing, online outsourcing and crowdsourcing are heavily reliant on the Internet to provide economical access to remote workers, and frequently leverage technology to manage workflow to and from the employer. Much computer freelance work is being outsourced to developing countries outside the United States and Europe.
Online freelance marketplaces are websites that match buyers and sellers of services provided via the internet. Buyers bid on services at a fixed price or at an hourly rate. These marketplaces allow people to sign up remotely for freelance assignments and get paid through a merchant account.
The Internet also enables many freelancers to be interviewed and hired without actually meeting an employer in person. This facilitates long distance business relationships all over the world, but can provide a challenge in screening applicants. Hiring more than one applicant for a short test assignment after the interview is now a common extra step in the hiring process.
Freelance employment has been common in the areas of writing, editing, translation, indexing, software development, website design, advertising, open innovations, information technology, and business process outsourcing. Freelance journalists, for example, may find it easier to start their own or shared news blogs, with many blogs growing into highly trafficked and competitive news sites capable of hiring dedicated staff and other talent.
Changes to the publishing industry since the 1980s have resulted in an increase in copy editing of book and journal manuscripts and proofreading of typeset manuscripts being outsourced to freelance copy editors and proofreaders.
Online activists, defending different social and political causes, are also referred to as political freelancers or freelance politicians.
Many periodicals and newspapers offer the option of ghost signing, when a freelance writer signs with an editor but their name is not listed on the byline of their article(s). This allows the writer to receive benefits while still being classified as a freelancer, and independent of any set organization. In some countries this can lead to taxation issues (e.g., so-called IR35 violations in the UK). Ghost signing has little bearing on whether a writer is a freelancer or employee in the US.
Freelancers often must handle contracts, legal issues, accounting, marketing, and other business functions by themselves. If they do choose to pay for professional services, they can sometimes turn into significant out-of-pocket expenses. Working hours can extend beyond the standard working day and working week.
The European Commission does not define “freelancers” in any legislative text. However, the European Commission defines a self-employed person as someone: “pursuing a gainful activity for their own account, under the conditions laid down by national law”. In the exercise of such an activity, the personal element is of special importance and such exercise always involves a large measure of independence in the accomplishment of the professional activities. This definition comes from Directive (2010/41/EU) on the application of the principle of equal treatment between men and women engaged in an activity in a self-employed capacity.
The European Forum of Independent Professionals defines freelancers as: “a highly-skilled subset of self-employed workers, without employers nor employees, offering specialised services of an intellectual and knowledge-based nature”. Independent professionals work on a flexible basis in a range of creative, managerial, scientific and technical occupations; they are not a homogeneous group and as such, they cannot be considered or investigated as a whole. They are generally characterised by a large portion of autonomy, a high labour productivity, knowledge intensive performance, social commitment and a large dose of entrepreneurship and specialisation.
In Europe, the perceived disadvantages of being freelance have led the European Union to research the area, producing draft papers that would, if enforced, make it illegal for companies or organizations to employ freelancers directly, unless the freelancer was entitled to benefits such as pension contributions and holiday pay. In the UK, where the terms of integration into the EU have and are being hotly debated, this would lead to a significant reshaping of the way freelance work is dealt with and have a major impact on industry; employers would be required either to give freelancers the contractual rights of employees or employ only freelancers already being employed by agencies or other organizations granting them these rights. However, the White Papers that recommend such moves have not yet been adopted in the EU, and the potential impact on UK employment laws is being opposed by key UK organizations lobbying the government to negotiate over the acceptance of EU legislation in such areas. The legal definition of a sole trader requires that he/she must have more than one client or customer which promotes the freelancing ethos.
In the U.S. in 2009, federal and state agencies began increasing their oversight of freelancers and other workers whom employers classify as independent contractors. The U.S. Government Accountability Office (GAO) recommended that the Secretary of Labor have its Wage and Hour Division "focus on misclassification of employees as independent contractors during targeted investigations." The increased regulation is meant to ensure workers are treated fairly and that companies are not misclassifying workers as independent contractors to avoid paying appropriate employment taxes and contributions to workers’ compensation and unemployment compensation.
At the same time, this increased enforcement is affecting companies whose business models are based on using non-employee workers, as well as independent professionals who have chosen to work as independent contractors. For example, book publishing companies have traditionally outsourced certain tasks like indexing and proofreading to individuals working as independent contractors. Self-employed accountants and attorneys have traditionally hired out their services to accounting and law firms needing assistance. The U.S. Internal Revenue Service offers some guidance on what constitutes self-employment, but states have enacted stricter laws to address how independent contractors should be defined. For example, a Massachusetts law states that companies can hire independent contractors only to perform work that is "outside the usual course of business of the employer," meaning workers working on the company's core business must be classified as employees. According to this statute, a software engineering firm cannot outsource work to a software engineering consultant, without hiring the consultant as an employee. The firm could, however, hire an independent contractor working as an electrician, interior decorator, or painter. This raises questions about the common practice of consulting, because a company would typically hire a management consulting firm or self-employed consultant to address business-specific needs that are not "outside the usual course of business of the employer."
Although it is commonly attributed to Sir Walter Scott (1771–1832) in Ivanhoe (1820) to describe a "medieval mercenary warrior" or "free-lance" (indicating that the lance is not sworn to any lord's services, not that the lance is available free of charge), a previous appearance occurs in Thomas N. Brown in The Life and Times of Hugh Miller (1809)., p 185. It changed to a figurative noun around the 1860s and was recognized as a verb in 1903 by authorities in etymology such as the Oxford English Dictionary. Only in modern times has the term morphed from a noun (a freelance) into an adjective (a freelance journalist), a verb (a journalist who freelances) and an adverb (she worked freelance), as well as into the noun "freelancer".