December 19, 2014

You Might be Surprised at the Current State of Independent Workers

independent workers

Call them freelancers, self-employed or independent – people who work for themselves have been the subject of much debate since the Great Recession hit five years ago. Are today’s independent workers entrepreneurs, or just people who can’t get jobs and are forced to fend for themselves?

The 3rd annual MBO Partners State of Independence Report (PDF) shows that by and large – it’s the former.

Far from pining for traditional jobs, independent workers in the in-depth survey generally report being highly satisfied with their lives, and few have any desire to return to traditional employment. In addition, more independents than previously believed are “job creators,” who hire other independent workers to help them.

No wonder that the number of independent workers is expected to keep soaring in the next 10 years.

Self-Image and Satisfaction

Independents in the study run the gamut from Millennials to 80-year-olds and are fairly evenly divided among men and women. While all age groups are generally happy with their work, the older the independents are, the more satisfied they are likely to be.

How independents view themselves has a lot to do with their level of satisfaction. The study asked independent workers how they describe themselves and found some key differences:

Millennials

They are more likely to self-describe as a freelancer, creative professional or temporary worker. Millennials are less likely to say they’re self-employed or business owners.

Gen Xers

They are more likely to label themselves creative professionals and independent contractor/professional services.

Baby Boomers

They are more likely to self-describe as self-employed or business owners. They are less likely to describe themselves as freelancers, temporary workers or creative professionals.

Matures

They are more likely to say they are consultants or self-employed. They are less likely to self-describe as freelancers or temporary workers.

Those who describe themselves as business owners or self-employed are most likely to be satisfied with their work – 75 percent of those who describe themselves as business owners and 69 percent of the self-employed are highly satisfied, compared to 64 percent of independents overall.

By contrast, just 17 percent of those who describe themselves as temporary workers are highly satisfied. No wonder 79 percent of temp workers plan to look for traditional jobs, compared to 31 percent of independent contractors and 25 percent of freelancers.

Just 16 percent of self-employed people and only 9 percent of business owners express any interest in traditional employment. Clearly, having control over your schedule, time and work – as opposed to being handed assignments by an agency – is a big driver of satisfaction.

Independent Workers Are Growing Strong

Currently there are 17.7 million independents in the U.S., up 5 percent from 2012 and 10 percent from 2011 (the first year the study was conducted). MBO Partners predicts by 2018, the number of independents will grow to 24 million and by 2020, about half of the U.S. workforce will have spent some time as independent workers.

While independents may be viewed as solopreneurs, they don’t always work alone. In fact, the study found that 25 percent of independents hire other independents via contracting, spending $96 billion overall and an average of $8,500 per independent outsourcing work. Men are more likely than women to outsource work to others.

In addition, independents are big contributors to the U.S. economy. Nearly 10 million households receive at least half their income from independents, and this year independent workers generated nearly $1.2 trillion in total income – an increase of 20 percent over 2012. That number is set to grow, as one in seven independents (nearly 2.5 million people) plan to launch larger businesses.

Why Be Independent?

Female independents are more likely to choose independent work because they want more control over their time and schedules, while men are more likely to say they want control over their work. In general, however, most independents say they chose this work style to gain control over their lives and be able to determine when and where they work and what type of work they do.

Nearly two-thirds (64 percent) of independents rate their satisfaction as very high (8-10 on a 10-point scale) and 20 percent rate it a 10. Independents say the biggest disadvantage of independent work is lack of a predictable income (57 percent), while 38 percent cite lack of benefits. However, the benefits of being independent, including controlling one’s own schedule (cited by 66 percent) and more flexibility (61 percent), far outweigh the disadvantages.

When all age groups in the study are considered, the average independent has been working this way for over 10 years. Clearly, independence isn’t a short-term response to the Great Recession – but a long-term way of life and work.

Independently Employed Photo via Shutterstock

9 Comments ▼

Rieva Lesonsky


Rieva Lesonsky Rieva Lesonsky is a staff writer for Small Business Trends covering employment, retail trends and women in business. She is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Follow her on Google+ and visit her blog, SmallBizDaily, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.

9 Reactions

  1. The mindset of an entrepreneur is so different from that of the average employee that I’m not surprised. If you’ve been working for a company, the responsibility of running your own schedule, finding clients, etc. is daunting. It takes a special sort.

  2. Rieva, thank you so much for sharing this data. I always self-described as a business owner but for years felt like my contributions were not valued by the economy or business community at large. This data validates that independence is not a black market work choice but a viable alternative to traditional employment.

  3. It’s quite nice to work for yourself you know. You have the command over your time and you get to leverage your income. You are not stuck with whatever your boss will give you. Instead, you can continue to improve yourself and even augment your income with part time work.

  4. Rieva,

    The stereotype that independent workers are those who can’t get jobs needs to be smashed to bits :)

    I have the utmost respect to those who aren’t afraid to do things their own way; to those who want to claim back their passion for their work and freedom.

    I work at home – by choice – and I know people (even relatives!) are talking behind my back saying that I am simply someone who can’t get a job to make a decent living. I laugh at the idea :D

    I can work anywhere in the world, anytime I want. I am location independent and although things are a bit scary sometimes, it’s super-fun!

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>