Fiverr International Ltd. (NYSE: FVRR), the company that is changing how the world works together, today revealed the findings of its annual Freelance Economic Impact Report, a comprehensive study that identifies and profiles the largest markets in the United States for skilled freelance workers. The report analyzes secondary data sources, including the U.S. Census Bureau, to determine the size and revenues of U.S.-based skilled freelancers. The Nonemployer Statistics series, based on a review of over 20 million tax returns, reveals there are nearly 6 million skilled freelancers working in creative, technical or professional positions in the United States.
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Six in ten (62%) freelancers are more fearful than hopeful about the future of independent work in light of the pandemic, but at the same time, six in ten (59%) expect to make more or about the same revenue in 2020 as they did in 2019. (Graphic: Business Wire)
“Understanding the growth and impact of this sector of the workforce has never been more important than it is in this current environment,” said Micha Kaufman, CEO and Cofounder of Fiverr. “As the COVID-19 pandemic has forced employers and workers to reexamine all aspects of the modern workplace and adopt new technologies to maintain pace from the comfort of home, skilled freelancers are at the forefront of this adoption curve. My belief is that, coming out of all this, we’ll begin to see a digital transformation in the labor market, meaning a shift to more digital, independent work.”
Looking at skilled freelancers across the United States
An interesting peek at some of the trends impacting skilled freelancers across the country.
- Freelancers are concerned about the effects of the COVID-19 pandemic, though appear confident about their financial future. Six in ten (62%) are more fearful than hopeful about the future of independent work in light of the pandemic, but at the same time, six in ten (59%) expect to make more or about the same revenue in 2020 as they did in 2019.
- Skilled freelancers are highly satisfied with their work. Seven in ten freelancers across the U.S. said they were highly satisfied with their work as compared to just over half of all U.S. workers. Top benefits of their work include the flexibility of their work schedule, the ability to work from home if needed, and the interesting nature of their work.
- Freelancers providing creative services are growing faster than those providing technical and professional services. While their population is not as large, the population of freelancers that provide creative services, such as graphic designers and videographers, grew by 20%. Their revenues also grew by 25% during that same time period.
- Freelancers are finding their clients through a variety of different means. The most common is through word of mouth (67%), followed by social media (23%), and online marketplaces such as Fiverr (18%).
- Both men and women are finding success as skilled freelancers. Skilled freelancers across the U.S. and on Fiverr’s platform are equally represented by males (47% across the U.S. and 56% on Fiverr’s platform) and females (52% across the U.S. and 44% on Fiverr’s platform).
- They recognize the drawbacks that can come along with freelancing. Top drawbacks among skilled freelancers in the U.S. include irregular income (72%), lack of access to benefits like health insurance (61%) and having to provide their own equipment and tools (35%).
Emerging Hotbeds for Skilled Freelancers
Though not widely considered hubs for economic activity, these cities are thriving due to increases in skilled freelance activity.
- Nashville and Austin continue to grow faster in both population and revenue than all other cities. In Nashville and Austin, the population of skilled freelancers grew by 26% and 27% respectively from 2012-2017. In terms of revenue, Nashville has exploded at 37% revenue growth, with Austin behind it at 29%.
- Miami’s skilled freelance workforce contributes the most to the overall GDP of the city. Skilled freelancers in Miami contributed 2.3% to the overall GDP of the city, followed by Austin, Los Angeles, and Nashville. Revenues from skilled freelancers across the U.S. represent 1.1% of total U.S. GDP.
- Skilled freelancers in Las Vegas, Nashville and Boston all earn more than freelancers in New York. Freelancers in San Francisco, San Jose, Las Vegas, Los Angeles, Nashville, D.C. and Boston all rank above New York on a per person pay basis. For instance, skilled freelancers in Vegas are earning, on average, almost $49K annually. Skilled freelancers in New York are averaging $44.5K annually. However, this type of work is not necessarily full time for these workers. On average, they spend 25 hours a week at their work. Forty percent work fewer than 20 hours per week and just 6 percent work more than 50 hours per week.
- All three cities in Florida (Orlando, Tampa and Miami) are among the fastest growing cities for skilled freelancing in the nation. While Nashville and Austin lead the pack, all three cities in Florida have seen over 20% growth in both revenue and population. Additionally, all three markets are among the fastest growing for freelancers providing professional services like accounting, management consulting, and legal services. This makes sense given 41% of these workers are older than 65 and we know Florida has an older population.
- California is also a hotbed for skilled freelancing. Six out of the top 30 cities for skilled freelancing are located in California: Los Angeles, San Francisco, San Diego, Riverside, San Jose and Sacramento. That could change in 2020 and beyond given the recent passing of Assembly Bill 5 in the state.
- Freelancers providing technical services are more concentrated on the west coast but are seeing fast growth throughout the country. San Jose, San Diego, San Francisco, Seattle and Portland are the top hubs for freelance technical services, but Miami, Austin and Nashville are all showing significant growth. Interestingly enough, Baltimore, one of the cities at the bottom of the list for share of workers, ranks in the top five for share of revenue.
Major Markets Rely Heavily on Skilled Freelancers
The largest skilled freelance workforces are found in the top three population centers: New York, Los Angeles and Chicago.
- The New York metropolitan area is the largest market for skilled freelancers by both total population and total revenue. In 2019, it is estimated that there were nearly 600,000 of these workers in the area who brought in $26 billion in revenue. That said, skilled freelancers in New York tend to be less satisfied with their jobs – 58% said they were highly satisfied with their work as compared to 72% of those outside the area.
- Los Angeles is the second largest market for skilled freelancers, with an estimated 430,000 workers and $20 billion in earnings in 2019. Los Angeles is the only market behind Nashville where creative freelancers outnumber technical freelancers. These workers believe that L.A. is desirable because of its internet infrastructure, the professional network it offers, and its general attractiveness when not working. That said, they also said it was less desirable because of the laws and regulations that make it difficult – possibly the new Assembly Bill 5?
- Chicago is the third largest market for skilled freelancers with an estimated 200,000 workers who earned $6.8 billion in 2019. Freelancers in Chicago are significantly more likely to work with clients who are from the Chicago metro area. Of their total earnings, on average, 68% of their revenue comes from clients within the area.
“The study reveals the importance of the skilled freelance economy in the United States. These professionals offer vital skills to local businesses and institutions and also bring in revenue from customers outside their communities, helping to drive local economies,” according to Charles Colby, Principal at Rockbridge Associates and the study methodologist. “These skilled freelancers will adapt well in a world changed by the pandemic because most of them are able to work from home and offer skills that are exportable through digital collaboration. Platforms like Fiverr will make it easier for freelancers in creative, technical and professional consulting fields to maintain and expand their businesses.”
The entire Freelance Economic Impact Report can be found at: www.fiverr.com/freelance-impact.
Fiverr’s mission is to change how the world works together. The Fiverr platform connects businesses of all sizes with skilled freelancers offering digital services in more than 300 categories, across 8 verticals including graphic design, digital marketing, programming, video and animation. In 2019, over 2.5 million customers bought a wide range of services from freelancers working in over 160 countries. We invite you to visit us at fiverr.com, read our blog and follow us on Facebook, Twitter and Instagram.