The New Independent Workforce

The Growing Workforce:

Many workers today do not work for organizations on a permanent basis.  These independent workers, both solopreneurs and independent service firms, known collectively as the contingent workforce, are present in many different fields.  But who are they?  We examine this unique section of the labor force.

From 1995 through 2012, the total workforce of contingent workers (self-employed and solopreneurs) grew by an estimated 4.3 million workers.  Despite economic downturn, the overall contingent workforce has held steady and is projected to grow to 40 percent, or 64.9 million by 2020.

Who Did Solopreneurs Hire in 2010?

And despite the economic recession, this independent workforce holds strong, bringing in more workers and providing jobs.  In 2010, 27% of those surveyed in the Freelancers Union Annual Worker Survey had hired other workers.

Who is this New Independent Workforce?

This contingent workforce is comprised of small and mid-sized independent firms, agency temporary workers, contract company workers, direct-hire temps, independent contractors, on-call workers, self-employed workers, and standard part-time workers, all working in a variety of fields, including:

• 24% writers
• 12% copywriters
• 11% designers
• 9% translators
• 7% web developers
• 6% editors
• 4% marketing
• 4% business
• 3% software developers
• 2% assistants
• 24% other

Across all of the professions, 66% work full time, 16% part-time (with a second full time job), 13% part-time, 5% full time (with a second full time job).  Instead of driving to the office, 90.2% of them commute every day by walking to another room in their house, working inside a home office.  

Why Freelance?

While lay-offs and downsizing influence the independent workforce, they are not the primary reason why this workforce continues to grow.  There are many reasons given for working independently, including:

• 25.9% Flexibility of Schedule
• 21.4% Follow my Passions
• 15.7% To be my own Boss
• 14.1% Freelance was not originally planned, fell into it
• 13.8% Lay-Off or Downsizing
• 9.1% Supplemental Income

The Business of Contingence

The contingent workforce continues to strive as more and more businesses utilize this segment.  90% of firms have used freelance or contracted talent.  This trend is only expected to continue as a 2010 Economist Intelligence Unit report found 61% of senior executives expect a growing proportion of functions to be outsourced to this labor force.  Tech giant Oracle predicts use of this contingent workforce will increase by 40% over the next 10 years.  

And spending on this workforce is only growing, expanding to incorporate small independent firms as well as solopreneurs.  American businesses spend more than $425 billion per year on contingent labor, according to a 2009 Staffing Industry Analysts Contingent Workforce Estimate.

The strong contingent workforce is evidence of a shift in current employment models.  Businesses are pulling resources from the labor force when and where needed, creating a new, more fluid dynamic in the overall workforce.