Amid the economic instability and mass layoffs in the country, the American workforce is fed up with worrying on a daily basis about losing their jobs. They are seeking greater autonomy and financial control through freelancing. Statistics show that two in three laid-off workers are happier building freelancing careers. And one in five employees have begun freelancing or started their own business to escape favoritism in traditional workplaces. Plus, a new study finds that workers are ditching traditional jobs for freelancing, out-earning their full-time colleagues with an annual $1.5 trillion annual salary last year alone.
The Big Shift: Freelancing Gaining Momentum
A major shift is underway in this country in how work gets done. More Americans are opting out of traditional jobs and transitioning into freelancing jobs. Working in a job that could end at any moment creates stress and limits your control over your life.
The word “freelance” is resonating big time with the U.S. workforce. Freelancing frees you up with the autonomy to be the captain of your own ship, instead of a passenger, whose fate is determined by big business that might not have your best interests at heart. Nearly half of American workers are using secondary income sources, and the numbers continue to rise.
The Upwork Research Institute surveyed 3,000 skilled knowledge workers, revealing a shift away from the conventional nine-to-five job, signaling a transformation in the way work is structured and performed in this country. The American workforce is opting for greater control over their career, financial future and ability to pursue work that is meaningful.
The report finds that freelancers are outpacing full-time employees in earning power, AI adoption, expertise in high-growth categories of work and critical human skills required to work alongside AI. Full-time freelancers out-earned their full-time employee counterparts, earning a median income of $85,000. And employees who performed freelance knowledge work alongside their full-time jobs, earned $40,000 in addition to their full-time wages.
Other key results include:
- 28% of skilled knowledge workers now operate as freelancers or independent professionals, seeking greater autonomy, financial control and meaningful work.
- Skilled freelancers are fueling the U.S. economy, earning a total of $1.5 trillion last year alone.
- Freelancers earning exclusively through freelance work report a median income of $85,000, surpassing full-time employee counterparts at $80,000.
- Skilled freelancers are outperforming full-time employees, leading in continuous learning, AI adoption and human skills critical for AI integration.
- 54% of freelancers report advanced AI proficiency, compared to 38% of full-time employees, while 29% have extensive experience building, training and fine tuning machine learning models.
- Freelancing is now a career of choice, especially for the highly educated. 37% of skilled freelancers hold postgraduate degrees.
- 45% of high-growth companies are more likely to embed freelancers.
- 36% of knowledge workers who currently hold full-time jobs are considering freelancing.
- Gen Z leads the acceleration of the freelance movement, with 53% of skilled workers already freelancing.
- Over one-third of full-time employees are considering freelancing for better opportunities, while only 10% of freelancers want to return to traditional employment.
- 63% of C-level leaders have freelanced at some point in their career.
- 42% of CEOs have performed skilled freelance work related to their current area of expertise.
The Five Benefits Of Freelancing In 2025
There are five major benefits to being a freelancer:
1. You get to be your own boss and call the shots.
2. You gain flexibility when you work in a location of your choosing.
3. You’re in control of your personal and financial future.
4. You can pursue work that is personally meaningful that you’re passionate about.
5. You have the potential to out-earn your full-time traditionally employed colleagues.
In addition, the Upwork report says that skilled freelancers are more future-ready than full-time employees, excelling in emerging fields such as AI, software development and sustainability while embracing continuous learning and self-directed skill development. They are leading the adoption of AI tools, with over half (54%) reporting advanced proficiency and indicating superior adaptability, critical thinking and problem-solving abilities—key attributes for navigating an AI-integrated workforce.
“Although business leaders remain hesitant to embrace non-traditional talent models, our research shows that those who leverage this growing talent pool drive higher revenue growth,” the annual report asserts. “These findings highlight a growing imperative for businesses: as more skilled workers opt for self-managed, long-term careers centered on continuous learning and skill variety, business leaders must adapt their talent strategies to include these professionals. Failing to do so is to risk widening skills gaps and falling behind in a rapidly shifting world of work.”
Four Different Types Of Skilled Freelancing
According to the Upwork report, there’s a difference between skilled knowledge work performed on a freelance or contract basis and gig work. Skilled knowledge workers apply highly specialized expertise toward solving organizational challenges, the report states. Skilled freelancers often have post-graduate degrees (37%), compared to their full-time employee counterparts (20%) and translate this knowledge into the delivery of skilled services (such as computer programming, marketing, creative design and IT).
The report identifies four types of freelancing within the broad category of skilled freelancing, each mode approaches and manages work in different ways:
1. Freelance Business Owner (make up 33%). A self-employed professional who runs their own business, managing multiple clients and projects.
2. Agency Freelancer (make up 43%). A freelancer working through an agency that delivers full-service solutions to organizations, popular among Gen Z professionals.
3. Managed Services Freelancer (make up 33%). A freelancer who works on a team delivering managed services, often focused on one organization and project at a time.
4. AI-Enabled Freelancer (make up 31%). A freelancer who combines human skills with AI tools, popular among Gen Z and moonlighters, balancing freelance work with full-time jobs.
Note: The researchers point out that these percentages exceed 100% due to freelancers taking on multiple modes of working.
A Final Wrap On Freelancing
Perhaps one of the biggest downsides of freelancing is reported in a new Fronteegg study, showing that 35% of freelancers have missed time-sensitive contracts due to login failures, and 30% lost a paycheck on high-paying opportunities.
The study mentions that freelancers lose an average of $1,018 from lockouts. Freelancers spend nearly a full workday (about seven hours) regaining access after being shut out. In the past, login issues have forced 20% of freelancers to walk away from active work, and nearly one in three freelancers have switched platforms over login frustrations.
But overall, the Upwork report finds skilled freelancers are finding a freedom that traditional full-time employment models don’t allow. These workers are finding the initial value proposition of working non-traditionally holds true,” the report concludes. “The top reasons skilled freelancers started freelancing in the first place—to have flexibility, to be their own boss, and to pursue meaningful work—are the same reasons they continue.”