It is well understood that the independent workforce — or gig economy — has experienced staggering growth over the past few years. In fact, some have gone so far as to claim that the future of work will mean the end of traditional full-time employment. While that is an exaggeration, it is true that America’s workforce is becoming a hybrid one.
The MBO Partners sixth annual State of Independence Report projects nearly half (47%) of the country’s private, non-farm workforce will be working or will have worked as an independent by 2021.
The staggering implications of this transformation are vast and will require a shift in mindset on the part of business leaders, who will need both the tools and the infrastructure to effectively and compliantly attract, engage and retain top independent talent.
Independent Talent: More Educated & Experienced Than Ever Before
Independent professionals, have, on average, greater education and, in many cases, more specialization than their traditionally employed counterparts. Forty-three percent of independents have a four-year degrees or higher and 20% hold advanced degrees. That compares favorably with the 33% of Americans who have four-year college degrees and the 12% who have advanced degrees, according to the Census Bureau.
The younger the independent, the more education he or she brings to the marketplace. Nearly six out of 10 millennial independent workers (58%) have four-year and/or advanced degrees compared with 33% of non-millennials.
As the infrastructure supporting independent workers grows, more and more people will continue to try it. Many – especially millennials – see this as a viable and stable career path. Others, who may cycle between independent and traditional employment, look at it as an opportunity to gain flexibility, learn skills, grow their networks, and diversify their income streams. Baby boomers who are ready to retire but still want to pursue passion projects and supplement their retirement income, have a lot to offer as independent consultants.
What Successful Companies Need to Do to Get Ready
Leveraging independent talent helps businesses become more agile in an increasingly volatile economy. Paying self-sustaining entrepreneurs, who have their own benefits and retirement plans, for work output helps get projects up and running quickly and saves on overhead costs. It also helps companies to pull in unique talents for specific projects without long-term commitment. However, as more workers do these independent “tours of duty,” companies must prepare.
Adjust to their new status as clients of individuals. This means making changes to many internal departments, ranging from HR to legal. It is crucial to have a system in place to engage independent workers in a seamless, compliant manner. Ease of onboarding and risk level are key factors in the decision-making of independents.
Be ready to compete for the top talent. Growing demand means these independents will have a portfolio of potential corporate clients to choose from. Leverage ways to directly source, engage, and re-engage this talent by using a direct sourcing platform.
Existing employees will consider independence for themselves. Keep these people close at hand, and maintain relationships wherever possible. A former employee-turned-consultant can be the perfect person to swoop in on a crucial project with a tight deadline.
It’s easy to fear change in the talent pool, but independent work truly offers many opportunities to both businesses and employees. The rise of the gig economy means a growing population of entrepreneurs, and entrepreneurship means opportunity for the entire economy – and that’s something to celebrate.