1. Be highly educated
Executive Summary
“The project economy is generating high quality jobs and propelling dynamic organisations.”
Quote from Respondent
Now in its fourth year, our ‘Ireland's Project Economy’ annual survey highlights a consistent pattern where high-skilled independent contractors believe they have the best form of work.
They continue to have significantly higher job satisfaction than equivalent employees. They feel that they have a better work-life balance, job flexibility and autonomy in their work than comparable employees. In addition, they are amongst the highest paid workers, earning an average salary in 2023 of €126,117 which is just over 2.6 times the average salary for employees (€47,936). No surprise then, that the survey reveals that roughly three quarters of these workers choose to become independent contractors for the opportunity rather than out of necessity.
They usually conduct this work in dynamic organisations who use a blended workforce, comprising of both employees and freelancers in order to achieve greater dynamic capabilities. Freelancers are a unique economic agent distinct from other forms of work and they enable firms to be more innovative, entrepreneurial, agile, flexible, lower risk and adopt a blended workforce model as well as having a wider expertise base than organisations restricted to monotone employee-only workforces. The independent contractors in our survey reveal that they clearly understand how they generate extra value-added for firms through these means and furthermore, are able to secure a share of this extra value created in the form of a pay premium above that of equivalent employees.
Of course, most people would prefer to choose a form of work that pays better and gives them more job satisfaction but there are organisational and personal mindset barriers to entry to this career path that keeps this form of work as a niche in the labour market. So what does our survey reveal in terms of showing what it takes to become a successful freelancer in the project economy? Our respondents reveal 8 habits for success.
These are:
Secure a university degree or professional equivalent. 95% of our sample of independent contractors have a university degree or professional equivalent. This is a knowledge-intensive career path and organisations want contractors who are skilled to a high level to deliver the performance required on project fulfilment.
Notably, just short of one in five (18%) of independent contractors feel that AI will displace their work while nearly half (48%) disagree with this view; the balance feeling the net effect of AI will be neutral.
2. Target dynamic knowledge-intensive industries.
Target dynamic knowledge-intensive industries where innovation, organisational transformation, uncertainty/risk, a wide range of expertise, flexibility and agility are all dynamic capabilities required to help drive organisational performance. Currently, these industries are mainly knowledge-based and include Engineering, Finance, Insurance, IT, Medical, Pharma, and Professional Services. The majority of project-based work and hence high skilled freelancers work in these sectors and they clearly understand which combination of the above dynamic capabilities they can enable in an organisation.
Their business confidence in both the Irish economy and their own business sector remains upbeat where they expect both to improve their performance relative to recent levels. Given that their work is concentrated in projects related to business innovation, growth and transformation, this privileged insight into businesses’ plans to invest in future growth and development points towards continued economic expansion.
3. Adopt a growth mindset and choose work that develops expertise.
Adopt a growth mindset and choose work that develops expertise and new skills which are acquired while working at the cutting-edge of new knowledge in your field. This is what makes these contractors unique and sought after by organisations seeking to be innovative and on the top of their game in terms of the latest technology.
This requires a growth mindset where contractors are open to: try new things, look at things from a new perspective, be curious and if necessary challenge the status quo, learn by doing whether that involves failure or success, and ultimately have a developmental learning mentality.
4. Build a track record and reputation for high performance.
High earning freelancers are able to demonstrate a track record of prior high performance and capability. Their objective is to do stellar work for clients so that they can get referrals for future work and nurture a community of advocates who will recommend them. These advocates aren’t just employees in client firms but can also be other freelancers who had a good experience of working with them on both a professional and personal basis. So, project-based independent contractors are constantly building their personal brand and reputation in the market because this is the backbone of a resilient career in this sector.
5. Have an entrepreneurial disposition.
Entrepreneurship involves self-employment, innovation, start-up and rapid growth/transformation. Risk and uncertainty are defining characteristics of this career path. Independent contractors are also self-employed and embrace similar entrepreneurial risk and uncertainties. This workstyle does not suit everyone but some people are able to tolerate risk and ambiguity more than others. Resilience in a freelance career requires all of these entrepreneurial mindset attributes.
These risks and uncertainties can decline as a freelancer builds up expertise and reputation placing them in a high-demand situation where they can command higher day rates and be more confident that a new contract awaits them when they finish their existing one. Nevertheless, this form of work is usually more uncertain and risky than employment (albeit that gap is closing as there is increasing turbulence in the employment sector) and especially so in the early career years in contracting where workers have less of a track record, client network and expertise accumulation to build upon.
6. Liberate yourself from prejudice and discrimination.
We can often assume that age and gender discrimination sadly exists in all forms of work because we hear about them so often. However, uniquely, the survey data doesn’t exhibit evidence of discrimination against older workers in the project economy. By contrast, both day rates and annual earnings increase with age in this sector. Project-based work rewards freelancers on the basis of their output or impact and so older freelancers with greater accumulated expertise generally get paid more than younger less experienced contractors across all age groups.
The over 60 year olds, who are the most discriminated against in the employed sector, are celebrated in the project economy evidenced by being the top earners in this latest survey. To a lesser extent a similar result pertains to gender. Women in the age group 50-59 years old earn (8%) more than men of similar age whereas women in other age groups earn less than men. Overall, female independent contractors earned €121,632 in 2023 compared to €129,384 for males.
Therefore, an earnings differential of 6% less than men (narrowing from 15% last year) and less than in the employed sector which is also experiencing a welcome decline in the gender pay gap. There is obviously scope for further gains here for female contractors to demand the day rates that male equivalents are securing (to this end, they can now refer to this report) and indeed for organisations to have a greater inclination towards equal pay for equal productivity.
7. Be comfortable with a nomadic workstyle.
High skilled freelancers change contracts on average every 14 months. As a result, they switch projects, encounter new colleagues, often move to new organisations, new work locations and new types of work.
Enjoying this adventure, or at least being comfortable with this nomadic style career path is, therefore, a positive – indeed necessary – state of mind for people to thrive as an independent contractor.
8. Be collaborative and a team player
By its nature project-based work tends to involve a team and common purpose. This requires co-ordination with other workers to achieved a shared purpose. So, while they have more autonomy than employees, they are not free to work entirely on their own terms – the requirement of the project define non-negotiable terms of their contracts. Project-based workers must dovetail their contribution to complement those of other contractors and employees. As a result, they feel part of the team. They have an affinity and pride in an organisation’s performance in a manner not too dissimilar to employees. Independent contractors secure work through recommendations from and the availability of other freelancers. They can often view competition from other freelancers as a benefit as the availability of these contractors and the work they generate, causes more firms to adopt a blended workforce model to achieve dynamic capabilities thereby creating more work for all.
These are the habits and mindsets that cause independent contractors in the project economy to have greater job satisfaction and income than comparable employees. They are also the attributes that dynamic organisations need in order to achieve dynamic capabilities to enhance business performance. Government can play a role too by recognizing the unique economic role that high skilled freelancers bring to the economy and the well-being of workers.
Government could do more to call out the project economy as a unique and hugely important part of the economy – within the high-skilled sector it is many more times valuable than the gig economy; both in economic and worker well-being terms. Amongst the workforce with university or equivalent professional education, the project economy is over 6 times larger than the gig economy and yet all the media and policy makers ever talk about is the gig economy!
Perspectives need to change and hopefully the views of the dynamic workers contained in this report will be heard as, in our view, they are the unsung heroes of 21st century dynamic organisations and knowledge-based economies.