The popular concept of work as a traditional 9-to-5 job with a single employer bears little resemblance to the way a substantial share of the workforce makes a living. Millions of the self-employed, freelancers, and temporary workers—as well as individuals renting out rooms on Airbnb, driving for Uber, or selling goods on eBay—are part of a significant trend that we call “independent work.” Although independent work has a long history, it has never been clearly defined or consistently measured in official labor statistics. This report aims to fill in that gap. The researchers used government data and findings from other studies to estimate the size of the independent workforce. Additionally, to get a deeper understanding, the authors conducted an extensive survey of more than 8,000 respondents in the United States, the United Kingdom, Germany, Sweden, France, and Spain. The goals were to: -size independent work -understand who does it and why as well as how satisfied they are.
While only 15 percent of independent earners use them, digital platforms such as Upwork, Uber, Airbnb, or Etsy have been growing rapidly. These types of online marketplaces could eventually have a transformative impact by efficiently matching a larger pool of workers with consumers of their services. Independent work has significant growth potential in the years ahead, based on the stated aspirations of individuals and growing demand for services from consumers and organizations alike. This shift could have real economic benefits by raising labor force participation, stimulating consumption, providing opportunities for the unemployed, and boosting productivity. But some key challenges will need to be addressed in order to make this a feasible and satisfying development for workers.
Note: The report was authored in October 2016 and the potential exists that the data cited may not be reflective of current economic or workforce conditions.
Major Findings & Recommendations
The researchers estimate that the independent workforce is larger than previously recognized: some 20 to 30 percent of the working-age population in the U.S. in some form of independent earning. More than half of them use independent work to supplement their income rather than earning their primary living from it. The distinction between primary and supplemental earnings and the distinction between choice and necessity—yielded four categories of independent workers:
- Free agents derive the majority of their income from independent work. They choose this working style, and they want to continue doing independent work in the future.
- Casual earners engage in independent work for supplemental income. While most of them have traditional jobs, approximately 40 percent are students, retirees, or caregivers. Like free agents, casual earners say they pursue independent work out of choice. Some do so for the extra earnings, but they might also undertake these assignments purely to pursue an interest, to develop new skills, or to stay engaged.
- Reluctants derive the majority of their income from independent work but would prefer to switch to a traditional job if one were available. This group includes people who resort to independent work because they cannot find a traditional job that pays well or fits their needs—or they can’t find one at all. This could include some people on short term probationary contracts (although it excludes those who are long-term temps or perma-temps, as noted in our original definition of independent work).
- Financially strapped are those who use independent work for supplemental income to make ends meet but would prefer not to have to take side jobs. In general, as we discuss below, these individuals are more likely than casual earners to be in low-income households.
What still needs to be done?
- Policy makers: Collect better data; address gaps in worker protections; benefits, and income security
- Innovators: Explore opportunities to create new marketplaces and tools
- Organizations: Consider how digital technologies allow you to utilize external talent
- Independent workers: Think like a business, develop differentiated skills.