Small Businesses Fueling Growth in Freelance Market

2 min read • Apr 14, 2017 • Melanie King

Small business owners are the driving force behind the growth of the independent workforce in the U.S., according to a new LinkedIn study. The professional networking site found that small businesses make up an estimated 40 percent of the hiring activity in the rapidly-expanding freelance market, while mid-market companies account for 35 percent and enterprises account for just 25 percent.

The LinkedIn study also reveals that 93 percent of independent contractors and freelancers are likely to consider working for a small business, and a large number of them have the skills and willingness to move between industries. Seventy percent of the contractors who switched jobs in the last year moved to a different industry.

Up to 30 percent of the workforce in the U.S. are independent workers, according to the McKinsey Global Institute, and experts say that number is likely to reach more than half in the next decade. Software and IT services are the largest industry segments among contractors, with 223,000 professionals, followed by media and communications and healthcare.

The LinkedIn study is based on aggregate data from public LinkedIn profiles where contractor status is listed as a member’s position title.

More key findings from the study:

  • Most contractors have more than 4 years of work experience, with one-quarter having more than 16 years of experience.
  • Healthcare, real estate and construction gained contractors over the last year, while public safety, retail and the arts lost them.
  • The most common skills among contractors include social media and marketing, business building, project management and training. Tech skills are also quickly growing in response to market demand.
  • Tech skills like mySQL and jQuery, as well as social networking, event planning and public relations are in highest demand among companies looking to hire contractors.
  • The biggest supply of contractor talent is in New York City and San Francisco, followed by Los Angeles, Washington, D.C., Houston, Philadelphia and Denver.
  • The majority (64 percent) of contractors listed excellent compensation and benefits followed by good work-life balance as their highest priorities in a job.

 

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Melanie King

As a reporter and editor, Melanie has written about everything from retail and tourism trends to economic development for regional newspapers, trade publications, and national magazines. As Lendio’s Director of Public Relations, she specializes in reporting fintech industry news and its impact on American small businesses. Melanie has a B.A. in Journalism from Brigham Young University. She is also a backpacker, runner, and mom of four.