#023: The State of Independence in America — What’s Happening in Today’s Freelance Economy

Summary: Ever since having MBO Partner's Gene Zaino on the show to discuss the new emerging models of freelance/client engagement, I've been meaning to have a separate discussion with him about the freelance economy — and specifically what his firm has uncovered via these comprehensive studies.

Is freelancing a growing trend or a fad?

And if it's growing, who's really profiting from this massive shift in the labor force?

If you've followed me for a while, you probably know that I'm a big "trend junkie." I even put together two comprehensive reports on the state of freelancing, back in 2011 and 2012.

But I've never come close to the information and insights that MBO Partners has produced over the past few years, mainly through their State of Independence reports.

Ever since having MBO Partner's Gene Zaino on the show to discuss the new emerging models of freelance/client engagement, I've been meaning to have a separate discussion with him about the freelance economy — and specifically what his firm has uncovered via these comprehensive studies.

In this interview, Gene and I discuss the biggest findings from the 2014 report, including who's doing well, what they're doing to thrive, how freelancers impact the economy, and what's ahead in the world of independent work.

The notes that follow are a very basic, unedited summary of the show. There’s a lot more detail in the audio version. You can listen to the show using the audio player below. Or you can subscribe in iTunes or Stitcher to get this show delivered straight to the Podcasts app on your smart phone, tablet or iPod.

You recently released the 2014 State of Independence in America report. Tell us about it

MBO first conducted this report in 2011. They’ve conducted it every year since. The data is gathered from 11,000 Americans by an independent research firm.

In the 2014 report, the study looked not only at solopreneurs who work more than 15 hours a week but also “side-giggers” who work less than 15 hours. Solopreneurs number 17.9 million and side giggers 12.1 million for a total of 30 million independent contractors.

How has the freelance economy changed now that the economy is improving?

Gene expected the 2014 study to show a reduction in the number of freelance workers. But instead, the number freelance workers continued to grow. In fact, it experienced eleven times more growth than employment jobs. The study debunked the idea that people turn to freelance work only when they can’t find a job.

The study also found that 40 percent of workers believe that they’ll work as independent contractors at some point in their career.

In five years, an estimated 30 – 40% of the workforce will work as independent contractors.

Today, there are 30 million independent workers. That number is projected to grow to 40 million by 2019.

What do you say to those who argue that freelancers don't contribute to economic growth?

About two years ago, the U.S Small Business Administration said that people are more productive when they work as employees because they leverage and share resources.

But with today’s collaboration and online tools, individuals can work more productively. Even more important, they enjoy the work and do a better job, which provides value to our economy.

The 2013 State of Independence in America report revealed that the independent workforce contributes 1.1 trillion to our economy. More than 10 million U.S. households rely on an independent worker for more than half of their household income. Every year, that number grows.

And over 2.5 million independent contractors plan to build a bigger, employer-based business in the future.

What findings did you find most surprising?

  1. Attitudes by gender. Women are motivated to work independently because they want to make a difference and create a work life that fits with their lifestyle. Men are motivated to work independently because they want to maximize their income, be their own boss and grow their business.
  2. Security. In 2011, only 33-percent of solopreneurs felt secure working independently. In 2014, 43-percent felt secure working independently.
  3. Age. The study revealed that independent workers are defined more by career stage than age. To succeed as an independent worker, you need to have experience, a solid network and confidence in your abilities.
  4. Work assignments. The study found a clear link between having a strong network and succeeding as an independent worker.

clicktotweet Research: Social networking is valuable, but word of mouth is still the most common way to land projects.

What do you say to older workers who worry people won’t hire them as independent contractors because of their age?

Define your career more broadly. Your career as an independent worker may have a different focus than your career as an employee. Recognize that your expertise includes not just your past job but other skills and areas of interest.

If an employer won’t hire you as an employee that doesn’t mean they won’t hire you as an independent contractor.

Where can listeners download a copy of the report?

Download it FREE here.

In a few months, MBO will release more information as they identify trends in certain segments. They’ll also publish infographics based on different aspects of the report.

You and I are presenting at the Independent Workforce Summit in San Francisco on March 18th and 19th. What’s your topic?

Gene will present the research findings. He’ll also talk about the collision between the growing independent worker economy and different regulatory agencies. We need a safer and easier way for employers and independent workers to buy and sell their services while complying with the regulatory system.

Ed will be moderating a panel on how much you can charge as an independent professional. He’s also a panelist in a session on time management and work-life balance strategies.

The Independent Workforce Summit: http://independentworkforcesummit.com

Save $200 when you register before January 23, 2015. You can get an additional 10 percent discount by entering Ed’s discount code when you register: TDIFA10.

  • Peterson Teixeira

    Very good reading.
    I think for me working as an independent contractor is way better than working as a employee. And researches like those that show statistics give me (and my family) a background to support this lifestyle.

    Thanks for the good work!

    Peterson Teixeira

  • Free-martet advocate

    You have got to be joking! "while complying with the regulatory system?"

    Don't you see that this is the eye-opener to the FRAUD of the 'regulatory system'?

    The free-market is revealing the LIE of the 'regulatory agencies'. They protect no one but themselves and the parasites. I hope you have a more enlightened contribution than just being an apologist for the blood-suckers of society.

    I guess we'll see.