Kelly Monahan, Ph.D., is the managing director and head of the Upwork Research Institute and the author of How behavioral economics influences management decision-making: A new paradigm.
Gen Z is set to overtake baby boomers in the workforce, signaling a seismic shift in today’s job market. They are the fastest-growing generation of workers, with 17.1 million entering the labor market in 2023. By 2030, Gen Z is expected to make up 30% of the U.S. workforce, according to Johns Hopkins University.
Gen Z has developed a distinct worldview shaped by their shared experiences, yet they bring a rich tapestry of perspectives and values to the workforce. Our latest research of nearly 1,100 Gen Z workers in the U.S. shows a widespread, critical shift as Gen Zers abandon conventional nine-to-five jobs for more diverse, flexible careers in freelancing.
What truly sets Gen Z apart is a departure from conventional career trajectories. 53% of Gen Z professional respondents said they were opting for freelancing, with more than half (53%) of Gen Z freelancers performing freelance work for at least 40 hours per week. This significant inclination can be attributed to several factors, including a broader ambition for freedom, control, and autonomy in their professional lives.
A more diversified and dynamic modern career
With so many opting for more independent career opportunities, it’s no surprise that Gen Z values flexibility and inclusivity in their work environments, with 70% favoring flexible schedules and 64% seeking environments free from the limitations of age, race, or gender expectations. The shift toward freelancing among Gen Zers reflects not only their pragmatic approach to career fulfillment but also their embrace of new, distributed ways of working that resonate with their values.
However, Gen Z is not a monolith. In fact, different freelance career types among Gen Z, uncovered by the research, highlight a rich mosaic of motivations and professional aspirations that go beyond mere financial stability.
Portfolio careerists: As the predominant group (comprising 39% of Gen Z freelancers), portfolio careerists leverage their specialized skills across diverse clients and sectors, seeking both autonomy and deeper purpose in their work.
Independent consultants: Making up 26%, this cohort values the flexibility that freelancing offers, enabling them to adapt their work schedules to their personal lives.
Temporary workers: Though fewer (at 7%), this group uses freelancing to balance caregiving duties while maintaining their authenticity in their professional roles.
Moonlighters: 24% of our respondents view freelancing primarily as a means to supplement their income.
Gen Z company founders: The smallest group at 3%, they are driven by a desire for total control over their careers and financial independence.
Understanding these diverse motivations is crucial for businesses looking to innovate and remain competitive. By aligning their organizational structures and recruitment strategies with the unique values and expectations of each freelancer type, companies can not only attract top talent but also foster a work environment that maximizes productivity and satisfaction. This strategic alignment becomes a key driver for building a resilient and adaptive workforce model, which is particularly important against the background of an ever-changing labor market.
Gen Z is embracing gen AI
Research findings uncovered another crucial insight about Gen Z freelance talent: their growing adoption of generative AI. A substantial 61% of Gen Z freelancers incorporate AI into their workflows, demonstrating a higher rate of technology integration than their full-time counterparts, of whom only 41% do so. This preference also highlights Gen Z's proactive approach to leveraging state-of-the-art technologies, not just to boost their own productivity and market competitiveness but also to differentiate themselves in a crowded field.
Moreover, this trend presents a unique advantage for businesses. Engaging with Gen Z freelancers who are proficient in AI allows companies to sidestep the lengthy and often costly process of training existing employees. Notably, 39% of these freelancers have already earned certifications in AI, equipping them with skills that are immediately beneficial to projects requiring advanced technological applications. Access to these up-to-date, AI-competent freelancers provides businesses with a flexible and efficient means to accelerate their own adoption of new technologies.
The shift towards freelancing among Gen Z presents undeniable implications for organizations seeking to thrive in an evolving labor market. With the Baby Boomer generation set to retire at faster rates than new Gen Z entrants, to remain competitive, businesses must understand where the next generation of talent is concentrated and overhaul their structures accordingly. Attracting the best talent will require employers to accommodate the new distributed ways of working, fostering adaptability and innovation.
Creating an inclusive culture is also imperative to attract and retain Gen Z talent. When companies build environments where talent can show up as their authentic selves, freelancers and full-time employees alike are free to bring a diversity of thought and experience to their work. Organizations that embrace openness and authenticity create environments where diverse perspectives flourish, enriching the quality of work and driving innovation. In this way, business leaders can position their organizations to thrive in an era defined by the changing preferences and behaviors of Gen Zers.
It’s clear there’s a paradigm shift in the modern workforce, characterized by a departure from traditional employment models toward more flexible and autonomous career paths. From the diverse modes of freelancing embraced by Gen Z to the adoption of cutting-edge technologies such as AI, it is evident that this generation is reshaping the dynamics of work in profound ways.
By embracing the talents and preferences of what might aptly be called the “freelance generation,” organizations can position themselves for success in an era defined by innovation, flexibility, and inclusivity.
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