Independent contractors, freelancers, consultants and micropreneurs have become an increasingly significant part of the workforce, and based on the findings of the Third Annual Independent Workforce Report from MBO Partners, it’s a trend that doesn’t look like it’s going away any time soon.
Why The Independent Work Force is Growing
Before I get to the findings of that report, I think it’s important to understand some of the reasons behind this trend, because it’s really the result of several factors:
Advances in technology enable and enhance remote working. Over the past 5 years in particular, there has been a renaissance in mobile technology and cloud computing tools and services. User interfaces across devices and platforms are becoming more streamlined, more intuitive, and more interconnected with relevant outside tools and networks. What this means is that there has been a major enhancement to the creation, exchange, and consumption of both data and media. This allows independent workers to produce quality results without being tied to a particular location.
Attitude shift regarding employment among employees. Job mobility is gaining in importance- especially among millennials. Many workers today are comfortable changing jobs every few years to advance their careers, and are using the skills they’ve gotten in an employment or intern situation to start up their own businesses.
Economic conditions are making job stability less likely. Going hand in hand with the above trend, over the past six years many big employers have been slashing benefits on things like healthcare, and retirement plans as well as cutting hours. Even though economic pundits have been calling these past few years a “recovery,” albeit a sluggish one, the fact is jobs in general have become less stable and often less attractive benefit-wise to employees. Given this, many workers may see running their own businesses as a more attractive alternative.
The independent worker lifestyle is being glamourized. Ever since the The 4-Hour Workweek began to enter the public conversation, it has become a defacto icon of the ideal work-life balance. This has been supported by the fact that tremendous media attention is being placed on a rolling roster of young, suddenly rich entrepreneurs who seem to have this elusive carefree lifestyle. The ironic thing is that in the majority of cases, it takes a significant amount of time and hard work to get a new micro business to profitability, and that fact is not getting the amount of attention it should. Driven by these ideals and by ideas that often sport low barriers to entry, it’s little wonder why more people are staking it out an independent workers.
The Current State of Independent Workers
Now, on to the study… Here are some interesting highlights about the state of the independent workforce today:
Independent workers are satisfied with their career choice.
“Independent workers’ satisfaction remains strong, with 64% reporting that they are highly satisfied with their work style… The vast majority plans to continue as independent workers, with 77% saying they will either continue as solopreneurs (63%) or build a larger business (14%).”
The rise of the independent worker represents a structural economic shift.
“The 2013 MBO Partners Independent Workforce Index, a measure created to track growth of the sector, rose yet again: up 2.7% over 2012 and 8.2% over the base year 2011.”
40% of adult Americans are either currently working or have worked on their own.
“Almost one third of adult Americans currently not working as independent have done so during their work lives and about 8% of Americans do so today. Many of the former independents indicate an interest in returning to independent work…”
Independents are positively and increasingly effecting the US economy.
“Close to $1.2 trillion in total income was generated by independents in 2013, up 20% from 2012. They also spent over $150 billion on non-payroll/contractor expenses. Independents earn income both globally and locally: $43 billion came from overseas while a robust $700 billion came from their metro areas. Nearly 10 million households receive at least half of their income from independents.”
Independents employ other independent workers.
“Although the vast majority of independent workers are solopreneurs and don’t have traditional employees, they don’t work alone. Over the past year, 26% of independent workers spent a total of $96 billion hiring the equivalent of 2.3 million full-time workers via contract hiring.”
One in seven independents plan on building their businesses.
“Close to 2.5 million independent workers plan to launch larger businesses.”
Independent workers come from all walks of life.
“For the 3rd consecutive year, the 2013 MBO Partners State of Independence study shows that independents represent all ages, professions, educational levels and geography.”