4 Reasons Why Millennials and Boomers are Joining the Freelance Economy
December 30, 2014 | Business and Careers
By Sarita Harbour
Millennials and Baby Boomers may be decades apart in age, but they share some things in common when it comes to how they want to work.
A recent study by PwC found that Millennials place a high value on a work/life balance, with 64 percent saying they would like their job to be more flexible and 66 percent saying they’d like to occasionally work from home. Meanwhile, 58 percent of Baby Boomers value a flexible work arrangement, and 49 percent consider work/life balance when evaluating job satisfaction, according to the 2014 Kelly Global Workforce Index.
Many companies already offer flexibility for staff by allowing employees of all ages to choose their working hours or to telework. Mobile technology now makes many full-time corporate jobs easily manageable from a home office.
But if you’re looking for an even greater degree of flexibility, freelancing may be the answer. Technology and changing employer needs have led to an increased demand for non-permanent employees, opening doors for workers interested in a freelance career. America’s workforce now includes 53 million freelancers—that’s 34 percent of the workforce, according to a 2014 independent study commissioned by the Freelancers Union and eLance-oDesk.
Here are four reasons Millennials and Boomers are taking the freelance plunge:
1. Define your work space and set your own hours. The flexibility to work from a Caribbean beach or a comfy couch in your living room is one of the greatest attractions of freelancing.
“It’s a ‘right fit’ for those who prefer to establish their own schedule and not have to show up to work for an employer from 9 to 5, 10 to 6 or some other set schedule,” said Julie Erickson, career coach and blogger at MyRightFitJob.com.
But there are additional costs to consider. Though you may save on the commute to work, you’ll have to provide (and pay for) your own technology, including hardware such as a laptop, as well as foot the bill for your monthly Internet and phone service. The good news? As a freelancer, you may be eligible for certain tax deductions, such as depreciation on that laptop or a portion of the real estate taxes if you are working out of your home.
2. Determine your own niche areas. Freelancing gives workers control over their own job descriptions, allowing them to take on “micro-jobs” to try out different projects.
“The definition of a micro-job is the skilled and semi-skilled work required for a segment of a project or task of limited duration,” said Ken Bodnar, author of 55 and Scared, a book about micro-jobbing for older workers. “Freelancing allows Boomers to work at a job that is a good fit with their skill set, experience and work history.”
Micro-jobbing lets Millennials take on projects that can help them identify their core area of expertise. Bodnar said it also benefits Boomers with a long work history but who lack the official credentials headhunters are looking for—current certifications, diplomas or degrees in programs that weren’t available when they were college kids, though they may have acquired the skills through hands-on learning during their career. Managers looking to fill less-desirable, short-term project positions may be more open to hiring workers lacking these credentials, giving Boomers the chance to prove they have the skills. This is especially prevalent in technology fields, where many credentials didn’t exist when Boomers’ careers were launched. “For example, Technical Architects did not exist as a discipline until the early 2000s,” he said.
3. Grow your client base on your own terms. The ability to select your own clients is a big attraction for freelancers of all ages. When you’re starting out, you may not have much flexibility to decline work because you need the paycheck. However, as you build relationships and a strong business reputation, you’ll start to be selective.
“You may have horrible clients in the beginning,” Erickson said. “Over time, you’ll get better at determining whether you want to work with someone.”
Don’t overlook the fact that competition for clients can be tough. A growing freelance workforce plus the emergence of online platforms such as eLance or Guru—where employers can post jobs and then choose from the freelancers who apply through the platforms—mean employers don’t have to look hard to find talent. “It is easier than ever to hire contract workers and freelancers,” Erickson said.
Attracting well-paying, repeat clients is essential to success as a freelancer. This may involve setting up a business website and blog (time- and work-intensive, but effective if you are a writer or other creative pro). Creating a strong LinkedIn profile, publishing posts, and contributing to LinkedIn group discussions also can get you noticed. Other ways to build your list include advertising using online ad networks like Google adwords, searching online job boards such as FlexJobs or Freelancer, or signing up with an agency.
4. Gain more control over financial compensation. Freelancers enjoy more freedom to manage their income by setting their own rates and selecting the size of their workload. “Freelancing gives Millennials a bit of control over their livelihoods if they can command sufficient payment for their services,” Erickson said.
To find out what to charge for your services, visit the website of the professional organization for your industry, which may post suggested rates or even survey results of what your peers charge. Alternatively, take a look at the average salary for your non-freelance competition by visiting Pay Scale or the Bureau of Labor Statistics.
The downside is managing your finances without a steady paycheck. Since cash flow can be inconsistent, don’t quit your day job until you have sufficient savings to support you through the launch of your freelance business, as well as emergency savings to cover you through the leaner times.
Once you start earning income, the onus is on you to calculate and make estimated income tax payments—no more employer deductions. Freelancers are also responsible for completing W-9 forms for new clients and reviewing 1099 forms from clients that have paid you more than $600 in a calendar year. And don’t forget cash flow: Negotiate payment terms up front with each client so you aren’t waiting months to get paid, and suggest a regular payment schedule for your ongoing or repeat clients to build a smooth income stream.
Turning freelancing into a truly lucrative career takes hard work and careful planning, but the freelance life does offer the freedom, flexibility and control to achieve the work/life balance many Millennials and Baby Boomers seek.
Sarita Harbour writes about personal finance, business and technology. She is a former financial adviser and holds the Personal Financial Planning Designation from the Institute of Canadian Bankers.
Originally published on Northwestern MutualVoice on Forbes.com.