Page 1


www.eden.cc www.freelanceswitch.com Š Rockstar Resources 2008 All rights reserved. No part of this publication may be reproduced or redistributed in any form without the prior written permission of the publishers.


THE FREELANCE

STATISTICS

REPORT


The Freelance Statistics Report 1

Demographics

6

2

The Freelancing Life

10

3

Finding Work

21

4

Client Projects

28

5

Dollars & Cents

32

Extra Analysis:

by Aaron Cruikshank - www.friuch.com

Freelancing & Happiness

45

Income & Freelancing

47

Satisfaction & Income

48

Community Size

50




3700 Freelancers, 10 Industries, 6 Continents, 38 Questions. In July 2007, we surveyed close to four thousand freelancers to find common threads, traits and data about people who work for themselves. The respondents were primarily drawn from the readership of FreelanceSwitch.com - the world’s top freelancing blog, and while their makeup is skewed towards the US/Europe markets, there are nonetheless results from around the globe. We hope you find the material of benefit in your work and career. If you were a respondent, we thank you for taking the time to participate.


Part 1

Demographics First up are some general demographics about the people who answered the survey. Although further in we break up data by location, profession and so on, it’s useful to read these statistics to get a feel for who is answering the survey.

Highlights ...

81 87 80

The percentage of freelancers who responded in the survey who are male.

The percentage of freelancers who responded in the survey who are between the ages of 18 and 37

The percentage of freelancers who responded in the survey who live in the US or Europe


 What continent do you reside in? Africa

1.3%

Asia

8.7%

Australasia

4.1%

Europe

27.7%

North America

52.7%

South America

5.6%

How old are you? Under 18

3.7%

18 to 22

18.0%

23 to 27

34.4%

28 to 32

24.0%

33 to 37

11.7%

38 to 42

4.4%

43 to 57

7.9%

Over 57

0.3%

Are you male or female? Female

19.0%

Male

81.0%


 How would you describe where you live? Major City

49.9%

Small City

29.3%

Town

14.5%

Country/rural

6.3%

What profession are you primarily in? Web designer

41.4%

Graphic designer

25.4%

Programmer

12.7%

Writer

6.4%

Illustrator

4.0%

Video

2.5%

Project manager

2.1%

Software designer

1.9%

3D

1.6%

Photographer

1.5%

Musician

0.4%


 Do you freelance full time? Part time

44.3%

(to make extra cash)

Full time

40.5%

Part time

15.3%

(transitioning to full time)

How many years have you freelanced for? Less than a year

25.9%

1 to 2 years

21.0%

3 to 5 years

18.5%

2 to 3 years

16.9%

5 to 9 years

11.8%

9 years or more

6.1%


Part 2

The Freelancing Life We asked respondents a variety of general questions about themselves, from whether they have health insurance, to how many hours they put in a day.

Highlights ...

4 37 10 45

The percentage of freelancers whose entire client list is made up of foreign business.

The average number of hours a week Australian freelancers work, making them the most laid back.

The percentage of freelancers who have business insurance.

The percentage of freelancers who don’t feel secure in their career.


11 How many hours do you freelance per week on average? Less than 5 hours

13.1%

5 to 10 hours

21.3%

10 to 20 hours

20.2%

20 to 30 hours

13.2%

30 to 40 hours

13.0%

40 to 60 hours

15.3%

60 hours or more

4.0%

Hours

Average weekly hours x Continent (Fulltime + Parttime)

Continent


12

Hours

Average weekly hours x Continent (Fulltime Only)

Continent


13 Do you work more hours as a freelancer than you did previously? No

49.7%

Yes

25.8%

I have never worked full-time as an employee in my industry

24.5%

Are you contributing to a retirement fund? No

55.6%

Yes

44.4%

Percentage of Freelancers Contributing to a Retirement Fund x Continent

%

Continent


14 Do you have health insurance? Yes

64.3%

No

35.8%

Percentage of Freelancers Who Have Health Insurance x Continent

%


15 Do you have business insurance? No

89.8%

Yes

10.2%

Percentage of Freelancers Who Have Business Insurance x Continent

%

Continent


16 Do you intend to continue as a solo freelancer or expand? Intend to Expand to a Larger Business Intend to Always Freelance

50.4%

49.6%

Do you feel secure as a freelancer? Yes

54.3%

No

45.7%

Why did you decide to freelance? More Flexibility

71.8%

Creative Control

59.9%

To Work From Home

58.1%

More Money

54.3%

To Grow a Business

48.7%

Work For Myself

39.3%

More Time with Family

14.9%


17 Do you exercise regularly? Yes

53.7%

No

46.3%

Where do you work? Home

85.0%

Shared office

7.9%

Private office

7.1%

Percentage of Freelancers Happier Since They Started Freelancing x Continent

%

Continent


18 Would you describe yourself as happier since freelancing? Yes

88.9%

No

11.1%

Percentage of Freelancers Happier Since They Started Freelancing x Industry

%

Industry


19 Where did you receive your primary training? Self taught

46.1%

University/college

39.8%

On the job training

14.2%

Where do Freelancers Learn Their Trade x Continent

%

Continent


20 How many years did you work as an employee in your industry before freelancing? None

35.4%

2 to 4 years

16.1%

1 to 2 years

15.5%

4 to 7 years

12.5%

Less than a year

10.7%

7 to 10 years

5.4%

Over 10 years

4.4%

Where do Freelancers Learn Their Trade x Industry

%

Industry


Part 3

Finding Work In order to be a successful freelancer, you need to find work. We asked freelancers what sources of work they made use of and where those jobs were coming from.

Highlights ...

4 89 15

The percentage of freelancers whose entire client list is made up of foreign business.

The percentage of freelancers who find work through referrals.

The percentage of freelancers who have a blog through which they find work.


22 What percentage of your clients are located overseas? Zero

54.6%

1% to 25%

26.3%

26% to 50%

6.3%

51% to 75%

4.8%

76% to 99%

4.6%

100%

3.5%

Where sources of work do you make use of? Referrals

88.8%

Portfolio website

43.6%

Internet job sites

33.5%

Social networking sites

21.5%

Blog

15.0%

Advertising

13.1%

Cold calling

12.6%


23 Where do web designers find work? Referrals

75%

Portfolio website

42%

Internet job sites

27%

Social networking sites

16%

Blog

11%

Advertising

10%

Cold calling

9%

Where do graphic designers find work? Referrals

68%

Portfolio website

33%

Internet job sites

22%

Social networking sites

17%

Advertising

12%

Cold calling

11%

Blog

6%


24 Where do programmers find work? Referrals

43%

Internet job sites

19%

Portfolio website

15%

Social networking sites

10%

Blog

7%

Cold calling

4%

Advertising

3%

Where do software developers find work? Referrals

78%

Internet job sites

27%

Blog

21%

Portfolio website

16%

Social networking sites

15%

Cold calling

10%

Advertising

9%


25 Where do writers find work? Referrals

66%

Internet job sites

27%

Blog

21%

Portfolio website

16%

Social networking sites

15%

Cold calling

10%

Advertising

9%

Where do photographers find work? Referrals

61%

Portfolio website

47%

Social networking sites

23%

Blog

17%

Advertising

16%

Internet job sites

14%

Cold calling

13%


26 Where do illustrators find work? Referrals

55%

Portfolio website

47%

Internet job sites

26%

Social networking sites

21%

Advertising

21%

Blog

16%

Cold calling

16%

Where do video/motion designers find work? Referrals

72%

Portfolio website

24%

Internet job sites

24%

Social networking sites

16%

Cold calling

15%

Blog

8%

Advertising

6%


27 Where do 3D animators/illustrators find work? Referrals

60%

Portfolio website

33%

Internet job sites

22%

Social networking sites

18%

Cold calling

12%

Blog

7%

Advertising

4%

Where do project managers find work? Referrals

76%

Portfolio website

35%

Internet job sites

25%

Social networking sites

22%

Blog

22%

Advertising

21%

Cold calling

11%


Part 4

Client Projects When it comes to projects, we asked freelancers whether they use estimates or quotes, how many of their hours they actually bill for, and finally what the clients spend.

Highlights ...

57 9 $ 15k

The percentage of freelancers who mostly provide estimates as opposed to fixed quotes

The percentage of freelancers who bill every single hour they work to a client

The average client spend on a freelance programmer in Germany


29 Do you mostly provide estimates or fixed quotes for jobs? Estimates

56.4%

Fixed quotes

43.6%

On average, what percentage of your weekly hours do you bill clients for? Less than 10%

12.4%

11 to 20%

9.1%

21 to 40%

13.0%

41 to 60%

20.7%

61 to 80%

22.6%

81 to 99%

13.7%

100%

8.6%

Note that on the following pages, all dollar amounts are in US Dollars


30 Average Client Spend x Country x Industry Average Client Spend x US State x Industry (Next Page)

> 10 Respondents > 4 Respondents < 4 Respondents

Web Designer

Graphic Designer

Programmer

Argentina

$552

$728

$653

Australia

$2,116

$1,226

$6,483

Belguim

$1,891

$1,825

$1,250

Brazil

$3,466

$16,740

$4,140

Bulgaria

$564

Canada

$2,091

Czech Republic

$382

Columbia

$1,080

Croatia

$820

Finland

$683

France

Writer

Illustrator

Video

Project Mgt

Software

3D

Photographer

$2,710

$4,343

$15,675

$1,425

$4,350

$19,167

$3,333

$700 $1,107

$500 $1,460

$2,161

$2,148

$4,006

$8,070

Germany

$1,467

$1,021

$14,820

$933

Greece

$1,520

Hungary

$1,774

$603

$1,400

$2,650

India

$817

$930

$834

Indonesia

$760

$621

$717

Ireland

$2,351

$2,275

$3,200

Israel

$960

$1,500

Italy

$4,220

$1,660

Japan

$2,125

$11,933

Malaysia

$566

$650

$15,305

Mexico

$1,763

$788

$5,100

Netherlands

$1,483

$2,286

$2,350

New Zealand

$2,217

$667

Norway

$2,500

$4,150

$4,850

Pakistan

$654

Philippines

$370

$1,617

$826

Poland

$1,066

$533

$591

Portugal

$1,181

Romania

$640

$7,960

$302

Serbia

$709

$325

$1,250

Singapore

$1,320

$1,675

$3,900

Slovakia

$838

Slovenia

$883

South Africa

$1,916

$1,365

$1,929

Spain

$1,548

$1,785

$1,400

Sweden

$4,650

$1,317

$750

Turkey

$1,143

$1,500

UK

$2,554

$13,975

USA

$3,049

$3,328

$4,457

$8,030

$1,033

$410

$6,500

$6,500

$950 $350

$4,000

$2,650

$6,000 $2,000

$308

$783

$700 $825

$400

$11,388

$6,153

$1,638

$5,570

$2,250

$54,375

$6,940

$1,693

$697

$12,896

$4,525

$16,111

$700 $5,108

$2,233


Web Designer

AK

Graphic Designer

Programmer

Writer

Illustrator

Video

Project Mgt

Software

3D

Photographer

$2,507

$3,257

$4,240

$17,805

$37,500

$14,000 $6,622

$2,870

AL

$5,500

AR

$5,440

$4,111

AZ

$3,990

$5,156

$3,281

CA

$647

$928

$3,773

CO

$2,732

$7,625

CT

$4,680

$5,222

DC

$3,563

$9,444 $5,375

DE FL GA

$2,047 $899

$2,769

IL

$1,048

$2,929

IN

$3,806

$1,939

$2,917

$2,980

$8,122

$9,062

$4,333

HI IA ID

KS

$3,844

$3,750

KY

$9,444

LA

$25,750

MA

$3,077

MD

$2,439

ME

$2,728

MI

$2,257

MN MO

$9,250 $1,778

$9,625 $9,464

$3,767

$3,041

$9,898

$4,300

$1,849

$1,953

$10,157

$2,140

$3,370

$11,555

$6389

$10,563

$21,750

MS MT

$3,903

NC

$3,885

$4,813

ND NE NH

$2,750

NJ

$2,984

$3,981

$8,440

$22,500

NM NV

$4,625

NY

$899

$1,767

$5,531

$1,717

OH

$1,224

$2,938

$11,728

$3,694

OK

$4,282

OR

$4,878

$3,577

$8,624

PA

$940

$2,882

$5,167

$4,917

RI

$7,812

$2,750 $5,625

$5,688

$11,900 $21,250

SC SD TN

$3,063

$3,556

$10,313

$3,889

TX

$649

$1,299

$6263

$3,827

UT

$6,889

VA

$2,404

$2,555

WA

$2,674

$3,712

WI

$1,628

$5,611

$30,000 $7,164

$3,120

$12,125

$10,556

$5,173

$8,062

$16,814

$4,167

VT

WV WY

$4,250 $26,260

$6,111


Part 5

Dollars & Cents The most eagerly anticipated part of the survey is of course the part dedicated to money. We looked at hourly rates in industries, countries and states around the world, as well as finding out about other income sources and the general satisfaction with freelance income.

Highlights ...

40 $ 4 $ 73

The percentage of freelancers who have other income sources besides freelance work

The difference in hourly rates between male and female web designers (females charge less)

Average hourly rate for software developers, the highest rate for an industry


33 Do you earn more as a freelancer than you did as a full time employee in your industry? No

43.0%

Yes

32.5%

I have never worked full-time as an employee in my industry

24.5%

Are you satisfied with your income level? Yes, very satisfied

12.7%

It’s okay but I’d prefer more money

50.6%

I don’t make enough money to be comfortable No, definitely not

21.8% 14.9%

Do you have other sources of income besides your freelance jobs? No

59.8%

Web business

21.2%

Sell subscriptions

11.6%

(hosting/domains/software)

Sell stock

5.7%

Sell products

4.9%


34 Percentage of Freelancers Satisfied With Their Income x Continent

%

Continent

How Working and Earning Relate between Freelancing and Previous Employment

Work More As Freelancers

Work Less As Freelancers

Earn More As Freelancers

22%

22%

Earn Less As Freelancers

13%

43%


35 Hourly Rate x Industry Web Designer

Graphic Designer

Programmer

Writer

Illustrator

Video

Project Mgt

Software

3D

Photographer

$46

$49

$49

$44

$41

$52

$58

$73

$48

$69

Hourly Rate x Industry x Experience Web Designer

Graphic Designer

Programmer

Writer

Illustrator

Video

Project Mgt

Software

3D

Photographer

No prior experience

$37

$34

$42

$23

$41

$56

$39

$59

$27

$55

< 1 year

$37

$51

$39

$26

$37

$26

$41

$87

$45

$48

1 to 2 years

$40

$42

$44

$35

$26

$42

$63

$60

$47

$72

2 to 3 years

$48

$49

$48

$60

$27

$64

$71

$70

$46

$54

3 to 5 years

$47

$52

$52

$48

$28

$40

$62

$76

$42

$87

5 to 9 years

$57

$51

$67

$61

$45

$53

$65

$75

$62

$148

9 years or more

$64

$65

$89

$63

$71

$106

$48

$77

$82

$75

Hourly Rate x Industry x Gender Web Designer

Graphic Designer

Programmer

Writer

Illustrator

Video

Project Mgt

Software

3D

Photographer

Female

$42

$44

$65

$44

$35

$53

$49

$63

$50

$77

Male

$46

$50

$47

$44

$42

$52

$60

$73

$48

$64

Note that on this and the following pages, all dollar amounts are in US Dollars


36 Hourly Rates of Programmers Number Of Respondents

80 70 60 50 40 30 20 10 0

$1 0-

$0

$2 0-

$1 0

$3 0-

$2 0

$4 0-

$3 0

$5 0-

$4 0

$6 0-

$5 0

$7 0-

$6 0

$8 0-

$7 0

$9 0-

$8 0

$1 00

-$

$1 25

90

-$

$1 50

10 0

-$

$2 00

12 5

-$

$2 50

15 0

-$

20 0

Hourly Rate (Ranges)

Hourly Rates of Software Designers / Engineers Number Of Respondents

10 9 8 7 6 5 4 3 2 1 0

$1 0-

$0

$2 0-

$1 0

$3 0-

$2 0

$4 0-

$3 0

$5 0-

$4 0

$6 0-

$5 0

$7 0-

$6 0

$8 0-

$7 0

$9 0-

$8 0

$1 00

-$

Hourly Rate (Ranges)

$1 25

90

-$

$1 50

10 0

-$

$2 00

12 5

-$

$2 50

15 0

-$

20 0


37 Hourly Rates of 3D Animators & Illustrators Number Of Respondents

12

10

8

6

4

2

0

$1 0-

$0

$2 0-

$1 0

$3 0-

$2 0

$4 0-

$3 0

$5 0-

$4 0

$6 0-

$5 0

$7 0-

$6 0

$8 0-

$7 0

$9 0-

$8 0

$1 00

-$

$1 25

90

-$

$1 50

10 0

-$

$2 00

12 5

-$

$2 50

15 0

-$

20 0

Hourly Rate (Ranges)

Hourly Rates of Writers Number Of Respondents

18 16 14 12 10 8 6 4 2 0

$1 0-

$0

$2 0-

$1 0

$3 0-

$2 0

$4 0-

$3 0

$5 0-

$4 0

$6 0-

$5 0

$7 0-

$6 0

$8 0-

$7 0

$9 0-

$8 0

$1 00

-$

Hourly Rate (Ranges)

$1 25

90

-$

$1 50

10 0

-$

$2 00

12 5

-$

$2 50

15 0

-$

20 0


38 Hourly Rates of Graphic Designers Number Of Respondents

140 120 100 80 60 40 20 0

$1 0-

$0

$2 0-

$1 0

$3 0-

$2 0

$4 0-

$3 0

$5 0-

$4 0

$6 0-

$5 0

$7 0-

$6 0

$8 0-

$7 0

$9 0-

$8 0

$1 00

-$

$1 25

90

-$

$1 50

10 0

-$

$2 00

12 5

-$

$2 50

15 0

-$

20 0

Hourly Rate (Ranges)

Hourly Rates of Photographers Number Of Respondents

7 6 5 4 3 2 1 0

$1 0-

$0

$2 0-

$1 0

$3 0-

$2 0

$4 0-

$3 0

$5 0-

$4 0

$6 0-

$5 0

$7 0-

$6 0

$8 0-

$7 0

$9 0-

$8 0

$1 00

-$

Hourly Rate (Ranges)

$1 25

90

-$

$1 50

10 0

-$

$2 00

12 5

-$

$2 50

15 0

-$

20 0


39 Hourly Rates of Software Designers / Engineers Number Of Respondents

10 9 8 7 6 5 4 3 2 1 0

$1 0-

$0

$2 0-

$1 0

$3 0-

$2 0

$4 0-

$3 0

$5 0-

$4 0

$6 0-

$5 0

$7 0-

$6 0

$8 0-

$7 0

$9 0-

$8 0

$1 00

-$

$1 25

90

-$

$1 50

10 0

-$

$2 00

12 5

-$

$2 50

15 0

-$

20 0

Hourly Rate (Ranges)

Number Of Respondents

Hourly Rates of Video/Motion Designers 18 16 14 12 10 8 6 4 2 0

$1 0-

$0

$2 0-

$1 0

$3 0-

$2 0

$4 0-

$3 0

$5 0-

$4 0

$6 0-

$5 0

$7 0-

$6 0

$8 0-

$7 0

$9 0-

$8 0

$1 00

-$

Hourly Rate (Ranges)

$1 25

90

-$

$1 50

10 0

-$

$2 00

12 5

-$

$2 50

15 0

-$

20 0


40 Hourly Rates of Illustrators Number Of Respondents

30

25

20

15

10

5

0

$1 0-

$0

$2 0-

$1 0

$3 0-

$2 0

$4 0-

$3 0

$5 0-

$4 0

$6 0-

$5 0

$7 0-

$6 0

$8 0-

$7 0

$9 0-

$8 0

$1 00

-$

$1 25

90

-$

$1 50

10 0

-$

$2 00

12 5

-$

$2 50

15 0

-$

20 0

Hourly Rate (Ranges)

Number Of Respondents

Hourly Rates of Project Managers 18 16 14 12 10 8 6 4 2 0

$1 0-

$0

$2 0-

$1 0

$3 0-

$2 0

$4 0-

$3 0

$5 0-

$4 0

$6 0-

$5 0

$7 0-

$6 0

$8 0-

$7 0

$9 0-

$8 0

$1 00

-$

Hourly Rate (Ranges)

$1 25

90

-$

$1 50

10 0

-$

$2 00

12 5

-$

$2 50

15 0

-$

20 0


41 Hourly Rates of Illustrators Number Of Respondents

30

25

20

15

10

5

0

$1 0-

$0

$2 0-

$1 0

$3 0-

$2 0

$4 0-

$3 0

$5 0-

$4 0

$6 0-

$5 0

$7 0-

$6 0

$8 0-

$7 0

$9 0-

$8 0

$1 00

-$

$1 25

90

-$

$1 50

10 0

-$

$2 00

12 5

-$

$2 50

15 0

-$

20 0

Hourly Rate (Ranges)

Number Of Respondents

Hourly Rates of Web Designers 250

200

150

100

50

0

$1 0-

$0

$2 0-

$1 0

$3 0-

$2 0

$4 0-

$3 0

$5 0-

$4 0

$6 0-

$5 0

$7 0-

$6 0

$8 0-

$7 0

$9 0-

$8 0

$1 00

-$

Hourly Rate (Ranges)

$1 25

90

-$

$1 50

10 0

-$

$2 00

12 5

-$

$2 50

15 0

-$

20 0


42 Hourly Rate x Country x Industry Hourly Rate x US State x Industry (Next Page)

> 10 Respondents > 4 Respondents < 4 Respondents

Web Designer

Graphic Designer

Programmer

Argentina

$19

$14

$21

Australia

$52

$52

$55

Belguim

$68

$52

$38

Brazil

$23

Bulgaria

$12

$27

$9

Canada

$46

$49

$50

$34

Czech Republic

$17

$25

$31

$38

Columbia

$17

$38

Croatia

$16

$31

Finland

$38

France

$45

$67

$60

Germany

$48

$57

$67

Greece

$74

Hungary

$42

$34

$16

India

$16

$29

$24

$18

Indonesia

$21

$21

$7

$15

Ireland

$56

$81

$84

$80

Israel

$28

$45

Italy

$32

$38

Japan

$45

$48

Malaysia

$24

Mexico

$31

$21

Netherlands

$54

$48

$63

New Zealand

$43

$39

$50

Norway

$75

$118

$114

Pakistan

$31

$32

$13

Philippines

$19

$27

$42

Poland

$19

$28

$16

Portugal

$26

$16

$29

Romania

$19

$21

$20

Scotland

$47

$55

Serbia

$24

Singapore

$60

Slovakia

$13

$35

Slovenia

$22

$21

South Africa

$42

$51

$33

Spain

$31

$36

$18

Sweden

$40

$53

$29

Turkey

$37

$41

$15

UK

$54

$51

$158

$49

USA

$54

$53

$58

$49

Writer

Illustrator

Video

Project Mgt

Software

3D

Photographer

$13 $87

$22

$38

$55

$50

$44

$70

$70

$44

$48

$68

$43

$76

$50

$49

$56

$40

$44 $41

$13 $40 $53

$35

$30

$104

$80

$65 $50

$85

$73

$48

$57

$55

$80

$70

$42

$53

$57

$86

$51

$47

$12

$15

$14 $51

$47

$33

$101


Web Designer

Graphic Designer

Programmer

Writer

AK

$50

AL

$30

$39

$40

AR

$51

$29

$30

AZ

$48

$50

$39

CA

$70

$71

$70

$70

CO

$129

$46

$50

$65

CT

$62

$47

$30

DC

$90

$118

$85

DE

Illustrator

Video

Project Mgt

Software

3D

Photographer

$50 $80 $50

$110 $50

$75 $70

$60 $35 $75

$75

FL

$55

$36

$44

GA

$50

$60

$58

HI

$70

$76

IA

$70

$70

ID

$100

IL

$52

$45

$67

IN

$48

$62

$43

KS

$58

$37

$48

KY

$27

$63

$68

LA

$43

$23

$125

MA

$59

$39

$48

MD

$54

$53

$77

ME

$36

MI

$55

$41

$75

MN

$59

$44

$75

MO

$58

$43

$48

MS

$48

$34

MT

$36

NC

$58

$50 $19

$25

$40

$55

$101

$50

$47

125 $35

$45 $53

$33

$89

$50

$50 $70 $37

$40

$53 $87

$35

$61

ND NE

$86

NH

$63

NJ

$44

NM

$50 $45

$40

$32

$82

NV

$58

NY

$55

$69

$66

$46

OH

$55

$51

$51

$48

OK

$61

$46

$53

OR

$53

$59

$57

PA

$44

$51

$45

RI

$52

$52

SC

$63

$75

TN

$44

$47

$51

TX

$46

$45

$67

UT

$56

$62

$69

VA

$71

$55

$71

VT

$37

WA

$66

$57

$48

$45

WI

$30

$74

$53

$24

$87

$49

$62

$175

$58

$73

$83

$22

$23

SD

WV WY

$27 $64

$75

$33

$79

$88

$100 $67

$30 $33

$105


44 Gross Income x Industry Web Designer

Graphic Designer

Programmer

Writer

Illustrator

Video

Project Mgt

Software Designer

3D

Average

$50,100

$56,350

$71,190

$40,300

$41,850

$68,285

$67,900

$94,900

$61,570 $49,630

Median

$40,000

$42,000

$60,000

$35,000

$35,360

$60,000

$50,000

$100,000 $61,000 $24,500

Photographer


45

Extra Analysis

Freelancing & Happiness by Aaron Cruikshank - www.friuch.com

In the past five years as a research consultant, I’ve had to do many analyses of different professions, working demographics and labour markets. Consistently, happiness and job satisfaction are much bigger indicators of the health of a particular profession or individual than how much money they make. For this reason, I really wanted to look at the influence drivers of happiness amongst freelancers. To start with, let’s look at the basic statistics around happiness and freelancing: • • •

The vast majority of respondents (71%) are happier since they started freelancing. Men and women are equally happy with their freelancing careers Rural freelancers report a slightly higher level of happiness with their freelancing career than their urban counterparts.

Despite these relatively rosy-looking statistics, there must be some factor that explains why the other 30% of freelancers aren’t happier since they started. To get at this nugget of information, we ran the survey data through logistical regressions that can measure the predicative capacity of any one factor such as income, gender or location. We ran “happier since started freelancing” against every other variable in the survey and this is what we came up with: 1. The number one predicator of a freelancer’s happiness is their own sense of security in their profession. Freelancers who feel secure are happy freelancers. I think there are several key factors that contribute to overall sense of security and, by extension, happiness. A sense of control over income is one and doing relatively better than your previous employment is another. 2. The amount of billable hours a freelancer is accumulating accounts for a large percentage of their overall happiness. This is in stark comparison to hourly rates and net income which have no significant impact on a freelancer’s overall happiness. This is an interesting phenomenon in that one would expect billable hours to be some sort of indicator of overall income. Given this finding, I think it is safe to say that there’s a certain amount of satisfaction derived from “feeling busy”. Before moving off the money issue, let’s look at relative income and its impact on overall happiness. 3. Working more hours as a freelancer than an employee and making more money as a freelancer than as an employee are both significant contributors to the overall feeling of happiness in a freelancer. This makes sense at an intuitive level. People go into freelancing because they’re looking for something better than what they


46 were doing as an employee. Making less money and working less as a freelancer quite clearly impacts your overall happiness heavily. The key thing to remember with this indicator is that the money and the time spent working are relative. No one net income level is going to make every freelancer happy. Feeling “satisfied” with level of income is a good predictor of happiness though, further validating this finding. 4. The overall happiness of a freelancer is also tied to providing fixed quotes. Freelancers that provide estimates are less likely to be happy with their career. Personally, I believe that to truly understand how well you’re doing as a freelancer, you have to have some sense of how much money you’re making on an hourly basis. For me, it provides a sense of control and stability over my income. When I figure out I’m taking a loss on jobs based on my per diem rate, I get stressed and I feel bad about freelancing for a while. Providing fixed quotes provides a level of control over your income that estimates cannot. 5. Finding time for regular exercise is a big contributor to the overall happiness of a freelancer. This one is a no-brainer. Physical fitness is directly tied to mental and emotional fitness. Obesity and a sedentary lifestyle strongly correlate to depression. It’s also possible that knowing one has the flexibility to get regular exercise is a comfort and contributes to overall happiness. 6. Referrals as a source of business leads is a good predictor of overall happiness – in other words, the more referrals a freelancer gets, the happier they are. I believe that referrals over all other forms of lead generation contribute to happiness because they generate a sense of market potential. When you’re getting successful referrals, one immediately thinks of all the other networking that you’ve been doing and the clients you’re currently working with and it can give you a sense that there’s more work coming down the pipeline because word is getting around that you’re a good service provider. 7. “Feeling secure” as a freelancer as a contributor to overall happiness is also validated by the fact that having health insurance, a retirement fund and good health also contribute to overall happiness. I suspect that these factors are merely reflections of a greater sense of security. Given these findings, if I was to try and summarize the secrets to consulting happiness, they’d be: •

Keep busy but make sure you find time to exercise and relax.

Get out there and work your network for referrals. It’s not only going to bring in more work but it’s going to make you feel better about your business.

Provide fixed quotes. It will reduce your stress level and keep your happier. Also track your income and hours to make sure that you are actually doing better than your previous job. If you’re not, it could explain a nagging sense of disappointment in your business. Measuring performance and striving to best it is a good motivator and drives your own happiness.

Make sure you have a safety net – health insurance, a retirement plan and take care of your health by eating right and getting regular exercise.


47

Extra Analysis

Income & Freelancing by Aaron Cruikshank - www.friuch.com

One thing that shook out of this research is that there is no factor measured by this survey that contributes to overall income (net or gross). That’s comforting and disturbing at the same time. It’s comforting in that you can sit back and think “hmmm… well, if my income isn’t what I think it should be, at least it’s not because I don’t do cold calls or offer fixed quotes.” On the other hand, it’s disturbing in that this survey covers a lot of very popular techniques that experts claim will lead to higher income. This survey suggests that the following activities have no noticeable impact on your income: 1. 2. 3. 4. 5.

Your age or your gender Your experience Where you live The marketing techniques you use The additional goods and services your offer.

This leads me to the only remaining possible conclusion – it’s all about the skills. This survey doesn’t measure how “good” of a freelancer you are. How could it? Skills are completely relative and subjective. That said, I don’t think it would be bad advice to suggest that if your income isn’t what you think it should be or need it to be, it might be time to upgrade your skills and worry less about marketing and diversifying. In freelancing, possibly more than any other profession, your value is tied to your reputation and your reputation is based on the work that you do. A question comes to mind at this stage – what’s more important: that you’re satisfied with your income or that you’re making a specific amount of money? Obviously, your net income needs to exceed your expenses. Beyond that, I suggest that the “right” amount of income for you is subjective and your satisfaction with your income is less based on how much money you’re making but how you feel about the amount of money that you’re making.


48

Extra Analysis

Satisfaction with Income by Aaron Cruikshank - www.friuch.com

Unlike actual income figures, there are factors that contribute to a freelancer’s satisfaction with their income. Roughly 50% of respondents in this survey are satisfied with their income or say “it’s okay but I’d rather make more”. In order to dig into what makes a freelancer satisfied with their income, we ran linear regressions on the data to see which factors increased our ability to predict satisfaction with income. 1. Happiness as a freelancer is an unsurprising contributor to satisfaction with income. If you’re not happy overall, you’re unlikely to be happy with your current level of income. I think the take home message here is that money can’t make you happy but unhappiness can make you unhappy about money. I think this just further validates the concept that happiness is more important than money. 2. Feeling secure as freelancer has about the same impact on satisfaction with income as it does on overall happiness as a freelancer. In conjunction with “feeling secure”, having health insurance, business insurance and a retirement fund also contribute to overall satisfaction with income. In this case, I think the feeling of security is a good barometer for many freelancers to tell them if they’re doing well financially or not. Again, I emphasize that income is a relative measure and I also suggest that the trappings of security – business insurance, health insurance, retirement funds – are indicators of sufficient income. 3. As with overall happiness, doing better in terms of income and hours worked is a good predictor of satisfaction with income. Again, doing relatively better is going make most freelancers happier with their income. 4. Getting regular exercise is a strong contributor to satisfaction with income. I suspect that there is some halo affect associated with feeling good physically. A recent study (needs citation) found that people who had sexual intercourse once a week or more “felt” like they made $50,000 per year more than they actually do. Exercise produces similar hormones in the blood-steam to sexual intercourse so it’s conceivable that regular exercise could make you feel like you’re making more than you actually do. 5. Finding work through referrals also correlates highly with greater satisfaction with income. There are several reasons why this is the case. First and foremost, leads generated through referrals are at almost no cost to the freelancer. Therefore it’s possible that the more referrals you get, the better you feel about your income because in the back of your mind, you know that your sales costs for obtaining new clients are lower with every successful referral.


49 6. Interestingly, satisfaction with income is highly correlated with freelancers that plan on staying small. I suspect that this is due to the simple fact that you need to make a certain amount of money before you can even think about taking on employees. If you can’t make that income, you’re going to be less satisfied with your income than individuals who only have to keep themselves fed and housed. 7. Again, providing fixed quotes contributes to a higher level of satisfaction with income. As per my previous analysis, I think that being able to measure performance in terms of work done to dollars earned is important to overall work satisfaction and satisfaction with income. For example, if you work 70 hours a week and you’re making $50K, you should be a lot less satisfied with your income than someone who works 20 hours a week for $50K.


50

Extra Analysis

Community Size by Aaron Cruikshank - www.friuch.com Community size is an important consideration for any freelancer. As freelancers, we hear anecdotal evidence that tells us that the good gigs are in the big city and itâ&#x20AC;&#x2122;s feast or famine in smaller towns. This section of the report will explore just how true some of these anecdotes are. Note: For this entire section, any data on â&#x20AC;&#x153;country and ruralâ&#x20AC;? communities needs to be taken with a grain of salt because the sample size from this community (n=286) is too small to be statistically representative. Figure 1 shows some interesting trends. For example, full-time freelancers have the highest representation amongst country/rural community respondents while towns (10,000+ residents) have the highest representation of part-time freelancers who do not hold down a second job. Freelancers who do freelance part-time and hold down a job are represented highest amongst respondents from small cities but not far ahead of respondents from towns.

Figure 1: Freelancing as income source, by community size

Overall, an interesting finding is that in towns between 10,000 and 100,000 people (relatively small communities), parttime freelancers hugely out-number full-time freelancers. This could be a commentary on market size in these communities. In terms of raw numbers, there are more full-time freelancers in major cities than the other three community-types combined (see Figure 2 and Figure 3 respectively) but the breakdown between full-time, part-time and part-time with employment on the side is remarkably close between rural respondents and respondents from major cities (Figure 1).


51

Figure 2: Full-time Freelancers, by Community Size

Figure 3: Part-time Freelancers, by Community Size

Responses to the question “What profession are you primarily in?” were re-coded to “creative” and “non-creative” professions. There is no scientific category for “creative” so I chose to differentiate based on whether or not something would be taught at an art college. By this logic, “film editing, graphic design, web design, musician” were all “creative” professions. “Accountant, Research Analyst, IT Specialist” were all deemed “non-creative” in contrast. The only area that was grey was “Marketing”. Marketing defaulted to “non-creative” under the assumption that it was business school-style marketing, not creative ad design that was invoked. The justification for this was in the fact that many respondents involved in creative ad design specified that discipline. Figure 4 illustrates the ratios of creative to non-creative freelancers and includes a sub-category of “creative” freelancers that have creative freelance gigs but supplement their income with non-creative employment. This sub-category is called “non-creative day job, creative freelancer”.

Figure 4: Creative vs. NonCreative Freelancers, by Community Size


52 Figure 4 shows incremental but positive growth in the ratio of creative to non-creative freelancers with a growth in community size. However, community size is not a determining factor in the career choice (between creative and non-creative) freelancers (linear regression analysis returned R2=0.003, sig= 0.0001 1 ) There is insufficient data to make a similar comparison of community size to p/t creative freelancers with a non-creative day job.

Figure 5: Creative Freelancing Breakdown, by Community Size

Figure 5 shows an interesting trend. In both Country/Rural Communities and Major Cities, there is a relatively narrow gap between full-time freelancers and part-time freelancers in comparison to Towns. It is possible that cost of living vs. availability of clients plays a role in this. For example, a small town with low cost of living but few clients could allow freelancers to concentrate on full-time freelancing while still paying their bills without taking on a job to supplement their income. Whereas in a major city, despite the cost of living, the availability of clients might mean that a full-time freelancer could generate enough billable hours at a sufficient hourly rate to forgo a second job. To test this hypothesis, we can look at the number of hours freelancers in each kind of community are working at their freelance gig regardless of full-time or part-time status 2. Figure 6 shows this analysis and indicates that freelancers in smaller communities are more likely to work less than 20 hours per week than their Major City contemporaries. At the same time, we see a marked tendancy in Country/Rural communities and Major Cities to work more than full-time at freelancing with a significant number of freelancers in both categories working between 40 and 60 hours per week. Again, size of community is not a very good predictor of freelancing hours worked (R2=0.001, sig=0.007).

1.

If you’re not familiar with linear regression analysis, it’s a way of exploring if two variables (in this case, living in a certain size city and your freelance

career of choice) have a cause and effect relationship on one another. The closer the R2 number comes to 1 or -1, the better the one variable predicts the other variable. The Sig number tells us the odds that the result is random. Because of the nice, large dataset you provided, Sig is always going to be good for this dataset. So, what we see when R2=0.003 and sig=0.0001 is that the size of community one lives in only explains 0.3% of their decision to pursue a creative over a non-creative career and that this result would come up the same in a sample of random people 9,999 times out of 10,000. Put simply, there’s no relationship and I’m 9,999% sure of it. 2.

Recognizing that one can claim to be a “part-time” freelancer while working just as many hours as a “full-time” freelancer who doesn’t have a

second source of income


53

Figure 5: Creative Freelancing Breakdown, by Community Size

One would assume that income (both gross and net) would vary by community size. However, Figure 7 seems to show that there is very little variation in average income by community size with the exception of the Gross Income of parttime freelancers (in green) which seems to grow proportionate to Size of Community. Upon further examination, we see that net income for part-time freelancers varies little.

Figure 7: Average Gross and Net Income, by ft and pt freelancers, by community size (Europe, North American and Australasia only)


54 Table 1 shows the data from Figure 7 in a tabular format. This table outlines the trend in gross income for part-time freelancers more clearly. We see a near doubling of gross income for part-time freelancers between country/rural communities and major cities. However, when we test income against community size, we see that there is no correlation between community size and gross or net income (R2=0.0007, sig=0.08 and R2=0.0004, sig=0.1 respectively). I had a suspicion going into this data that the biggest factor that would vary by community size would be hourly wage. Let’s look at that next.

Table 1: Average gross and net income, by ft and pt freelancers and by community size (Europe, North America and Australasia only) Country/rural (< 10,000) Full-time

Part-time

Gross Income (Average, FT Freelancers) Net Income (Average, FT Freelancers) Gross Income (Average, PT Freelancers) Net Income (Average, PT Freelancers)

Town (10,000 +)

Small City (100,000 +)

Major City (1 million +)

$

56,196.77

$ 59,135.66

$ 57,690.35

$ 63,902.85

$

28,339.09

$ 26,001.13

$ 26,712.56

$ 31,688.61

$

15,732.30

$ 20,465.71

$ 21,997.81

$ 28,205.60

$

6,174.30

$ 5,864.99

$ 7,298.87

$

8,108.44

Table 2 shows how hourly rates compare across community sizes. Community size doesn’t seem to have as big of an impact as full-time or part-time freelancing does. We’ll explore the roots of higher income in the next section on money.

Table 2: Average hourly wage, (all groups, ft and pt), by community size (Europe, North America and Australasia only)

Country/rural (< 10,000) Town (10,000 +) Small City (100,000 +) Major City (1 million +)

Average Hourly Rate (all)

Average Hourly Rate (full-time)

Average Hourly Rate (part-time)

$ 50.16

$ 58.58

$ 42.29

$ 50.97

$ 56.88

$ 42.30

$ 49.84

$ 59.54

$ 43.72

$ 53.76

$ 60.45

$ 48.10

None of the other factors that one could compare community size to yielded any interesting results.


55 Summary There are no significant correlations between community size and any measurable success factor. There are clearly other variables that impact outcomes such as money and happiness. I think it is clear that this data dispels any preconceived notion that to be a successful freelancer, you need to operate in major cities.

About Aaron Cruikshank Aaron Cruikshank is the Principal and Founder of Friuch Consulting, a firm that delivers research and intelligence services. A former public servant for the BC and Federal governments in Canada, Aaron started Friuch Consulting in 2003 as a sole proprietorship serving government agencies with mandates to develop policy on science and technology commercialization. In addition to public sector work, Friuch also takes on both private sector and pro bono work. Friuch Consulting www.friuch.com


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