The independent workforce: 6 trends to know

Independent workers were less impacted by the pandemic than the broader workforce, according to a report released Wednesday by MBO Partners. The jobs platform has been collecting information about independent workers for 10 years, and found that although recent economic volatility has had an effect on independent workers’ satisfaction, long-term trends suggest a “modern business model” that has traditional businesses increasingly relying on people who aren’t employees.

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These freelancers, independent contractors, solopreneurs and microbusiness owners are no small part of the economy. They represent a workforce of over 38 million people, and contribute $1.21 trillion in revenue, or 5.7% of U.S. GDP in 2019, according to the report.

Employment for independents fell 7% this year, MBO Partners found, from over 41 million to 38.2 million in 2020. Full-time independents saw a bigger drop, as those reporting an average 35 hours a week fell 11% to 13.6 million.

However, MBO Partners believes the independent workforce will only increase in the next few years. The organization predicts that 48% of adults who have worked independently at some point in their careers will increase to 54% in five years, and not just in response to the COVID-19 pandemic.

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“Independent research has grown from a novelty that was more often than not a necessity driven by economic circumstances to a mainstream way of working,” Miles Everson, CEO of MBO Partners, said in a statement. “We’ve reached an important inflection point in the American workforce, where workers not only desire to control their own careers, but businesses increasingly realize that accessing top talent and skills means needing to re-think how they structure their workforces, and that in order to be competitive, they must leverage independent professionals as part of this modern business model.”

MBO’s analysis was bookended by two economic crises: the Great Recession and the COVID-19 pandemic. Each has had an effect on people’s working lives, but the report identified trends that show independent work is not merely a response to economic necessity.

1. Independent workers do so by choice. 

In 2011, 55% of independent workers said they did so by choice. That rose to 67% in 2019. Unsurprisingly, the percentage of independents who said it was fully their choice shrank this year to 59%.

Independents are also increasingly likely to say they want to remain independent: from 63% in 2011 to 70% in 2019. That share fell to 59% in 2020, but even with the pandemic, 61% of full time independents say they won’t go back to a traditional job.

Independents reported high levels of happiness (83%), a belief that working on their own was better for their health (71%), and sense of security in their work situation (56%).

“Simply put, the environment and structures across the board have grown increasingly more conducive and enabling to independents,” according to the paper.

2. Independent workers tend to be younger. 

Boomers kicked off the independent workforce, but the millennials drove it to new heights. Many of the 20-somethings who started their careers on the heels of the Great Recession are now established independent workers, accounting for a third of the independent workforce. Today’s 20-somethings, Gen Z, represent a sizable share, at 16% of the workforce.

These generations’ comfort with technology is no small part of their comfort with independent work, according to the report.

3. Independent workers have global reach. 

The paper found that 28% of independent workers did business outside the U.S., a trend that has increased steadily since 2013, and more dramatically since 2017.

“They are increasingly able to use technology, connectivity, and online marketplaces to find new markets, clients, and customers around the world,” MBO Partners wrote in the report.

4. Independent workers include highly skilled people.

Gig workers account for a small share of the independent workforce, according to the report. Skilled independents have increased 71% since 2011 to 7.7 million in 2020, more than a third of all independent workers. Consultants and coaches accounted for the greatest share, at 19% of independent workers, followed by creative services (15%) and IT workers (13%). Skilled workers were also more likely to say they were satisfied with their work situation: 81%, compared to 76% of all independent workers in 2020.

“Over the past decade, organizations have substantially increased their use of non-employee labor. This has, in turn, increased demand for professionals providing services to businesses. It has also led to more skilled professionals choosing to become independent workers,” MBO Partners found.

5. Independent workers are balancing full-time jobs or unpaid work. 

Although the perception of independent workers forced into a side hustle is a mischaracterization, the report did find that 15.8 million independent workers also had other jobs or responsibilities, up 5.3% from 2019, and 51% from 2016. Some picked up independent work to keep up with the rising costs of education, health care or housing, according to the report, while others were pursuing passion projects or developing new skills. MBO Partners noted that while “most side-giggers have other paid jobs, … many have activities such as caregiving, homemaking, attending school, or other issues and reasons that keep them from having a traditional full or part-time job.”

6. Independent workers are designing new work structures. 

Technology is facilitating new ways for independent workers to connect with customers, clients and “coworkers,” according to the report. It found that 27% of independents have used an online talent marketplace to find clients, whether they were working with consumers or businesses. Thirteen percent say online marketplaces are their top source of clients, while others use them to “fill in their schedules, find new clients, and to test out new business areas.”

Independents are also collaborating more with each other, MBO Partners found. Nineteen percent of independents said they had teamed up with other independents in the last 12 months, and 24% expect to do so in the next 12 months. Online platforms make it easier for them to do so, and organizations are increasingly interested in contracting with teams that can complete a project, rather than individuals who work on just one aspect of a project.