Are You Ready to Be an Independent Worker?
Whether you call them independent contractors, consultants, freelancers, self-employed, or business owners, the number of independent workers in the United States is on the rise. And whether you’re already an independent worker or considering joining their ranks, you’ll be interested in the latest findings of an ongoing study of independent workers by MBO Partners.
The independent workforce is going through a weeding-out process, reports America’s Independents: A Rising Economic Force. As unemployment has declined to 5 percent and with more new jobs being added, self-employed people who found the role of independent worker didn't really fit their needs are returning to the world of traditional employment. In the past year, the number of full-time independent workers declined by 5 percent, to a total of 16.9 million Americans. However, the number of part-time independent workers (defined in the report as fewer than 15 hours a week) held steady, at 12.4 million.
Why are people choosing independent work? Both full-and part-time independent workers in the survey say they want more freedom, flexibility, and control over their lives. Part-time independent workers’ primary reasons for working independently are to supplement their income (61 percent), but 4 percent also do so to pursue a passion or interest. As with full-time independent workers, part-timers are not choosing this role because they can't find work: More than seven in 10 say working independently is their choice.
Money is a motivator as well: Almost half (47 percent) of independent workers in the survey say they make more money working on their own than they could in a traditional job. This year, 17.9 percent of full-time independent workers earned more than $100,000 annually--an increase of 50 percent since 2011. The average gross income for all full-time independent workers grew 30 percent since 2011.
The independent workforce is also getting younger. Many Millennials (defined in the study as people aged 21 to 36) start their careers as independent workers. In fact, Millennials account for 40 percent of the full-time independent workforce—greater than their representation in the labor force in general, where they make up 34 percent of workers.
One big reason for the growth in independence: Being independent has become less risky. There is more infrastructure in place to support the independent worker—technology, co-working spaces, and free or affordable apps to help enable independent work are all a factor in the growing independent workforce. In addition, with more businesses hiring independent contractors, being an independent worker has become a more acceptable career opportunity. No wonder more than three-fourths (76 percent) of independent workers believe that independent work is just as secure or more secure than traditional employment, and 13 percent of Americans who aren't currently independent workers are considering becoming independents in the next few years.
While the conventional wisdom used to be that independent workers took this path because they couldn't find traditional employment, the survey debunks that myth. The average full-time independent in the survey has been independent for 10.5 years. Looking forward, a whopping 70 percent of independents in the survey say they plan to either stay independent (63 percent) or expand into a larger business (15 percent).
What's the future of independent workers? MBO Partners predicts that the number of both full-time and part-time independent workers will increase by 16.4 percent, reaching 34.1 million, or 29 percent of the workforce, by 2021.
Are you considering becoming an independent worker, freelancer, contractor or self-employed? You'll be happy to know that most of those who have chosen this life wouldn't change a thing. Nearly two-thirds of full-time independents rank their satisfaction as a very high; 22 percent rank their satisfaction as 10 on a scale of 1 to 10. Clearly, the rewards, flexibility and control gained by independent workers more than make up for the challenges and risks.
