The standard workforce is generally represented by those who have full-time jobs with salary and benefits. This is the dominant workforce which has been around since the Industrial Revolution. There is another workforce that is often not recognized. It’s the independent workforce represented by independent contractors, contract workers, freelancers, and the self-employed. This workforce is often invisible. What’s interesting is that the independent workforce represents nearly one-third of the total workforce. According to the U.S. Government Accountability Office, in 2005 independent workers represented 31 percent of the total workforce, or 42.6 million workers. Since the share of the total workforce has remained relatively constant, the 2008 figure is estimated at more than 46 million.
Those participating in the standard workforce search for jobs by preparing resumes, completing job applications, and participating in job interviews. Normally, they seek permanent jobs with adequate salaries and benefits. By contract, those participating in the independent workforce are not seeking jobs per se, but seeking work through contracts or other agreements. In order to work independently, they must identify and market their own expertise, enter into agreements with clients, and estimate time and cost of their work. Normally, they work on specific projects that have a definite beginning and end. In addition, they must pay estimated federal and state taxes, make social security payments, and arrange for their own health care and retirement.
"The independent workforce represents nearly one-third of the total workforce."
As the nation recovers from the recession, there may be important trends that will affect the workforce for the next several decades, and perhaps permanently. Employers will likely continue to downsize in order to reduce labor costs. Even when the economy improves, they may be reluctant to hire new workers, especially if they are able to compete and grow with a smaller, leaner workforce. Some employers may find that creating new jobs is not cost effective, but instead choose to define work as projects. Some employers are already moving in this direction by creating project teams which combine full-time employees with independent contractors. The focus is not so much on jobs or positions, but on well-defined work projects with specific goals, time lines, and budgets. Using this approach, many independent workers may experience a growing demand for their services.
In recent years, a new kind of agency has emerged that links independent workers with employers. These are not the typical employment agencies that place workers in jobs, nor are they the same as temp agencies, although there are some parallels. These new agencies monitor the needs of large employers, specifically in the creative and marketing field. At the same time, they search for creative talent among independent workers. The agencies match talent with employer needs. Agencies contract with employers for a specific period of time, and simultaneously enter into an agreement with the independent workers. Contracts may continue for months or years, and may result in full-time employment for the independent worker. In their agreements with independent workers, these agencies serve as the employer, withholding taxes, and in the case of long-term contracts, may provide benefits such as health care. While the focus of such agencies is marketing and related fields, there is no reason to assume that their focus will not broaden to many other fields.
"While a job search requires careful honing of a resume, thinking like an independent contractor requires the preparation of a personal portfolio."
Those seeking jobs in the present economy might well consider a dual track. As they search for a job, they may simultaneously begin to think of themselves as independent contractors. While a job search requires careful honing of a resume, thinking like an independent contractor requires the preparation of a personal portfolio. A portfolio involves a careful self-examination to determine dominant interests and strengths. While it may include experience, it is more a declaration of expertise, especially in areas that can be marketed. For some, this may be a dramatic shift away from past experiences, while for others it may be a refinement of a previous career path. For the employed and unemployed alike, it may be wise to begin thinking like an independent contractor. Business philosopher Charles Handy has encouraged workers not to think of their current jobs as a career, but as just one part of a lifetime portfolio of wages, contract fees, charity work, and study.
There are few resources to train job seekers to think like independent contractors. Government agencies and educational institutions are mainly oriented to jobs and job seekers. Those interested in becoming independent workers are left mostly to function on their own. Most helpful is networking with those who have made the shift from a full-time job to being an independent contractor. Several years ago, Peter Brown described this process in his book, "Jumping the Job Track" by providing several real-life profiles of individuals who have successfully left executive positions to become independent contractors. Brown also provides practical guidelines to help individuals avoid certain pitfalls as they contemplate becoming an independent worker.
In the next decade and beyond, it’s likely that the independent workforce will grow. Hopefully, this "other workforce" will receive the support its deserves from educational and government agencies that already support the standard workforce. Time will tell.
For more than three decades, Don has provided services to organizations in areas of corporate responsibility, organizational planning, economic development, executive education, and environmental management. His application of strategic thinking to organizational change has resulted in many successful efforts.
Don has served as an independent contractor throughout his career. He has worked for major corporations, small businesses, educational institutions, nonprofit and religious organizations, and foundations. He has degrees in mathematics, science and theology.
He is currently a small business consultant and lives in Fort Collins, Colorado.