Working as an independent professional is becoming a more popular option to consider when planning your next career move. An article posted on GigaOM.com earlier this month predicts that "by 2020, independent workers will be the majority." Gene Zaino, CEO and President of MBO Partners, who made the prediction, further stated that "this independent way of work is here to stay."
What is independent work? You may have heard of independent contractors, freelancers, the self-employed, contingent workers, and independent consultants. All of these titles are used to describe those usually hired on short-term, project-based contracts, and often by larger companies to address specific issues or problems. They aren't employees of the hiring organization, but are instead contracted to perform specific tasks for agreed-upon compensation. The work itself may be in a physical office location, potentially requiring travel, or in a virtual setting, in which communication and collaboration take place online.
Tracking the Trends
The idea of independent work is not a new one. Daniel Pink's 1997 Free Agent Nation article in Fast Company cited the existence of 25 million independent workers making their living as self-employed individuals, independent contractors, and temporary workers "in a land of exiles, an economic Elba." The number of workers in this land has grown since Pink's article and subsequent book, and continues to expand as more people seek out alternatives to traditional employment scenarios.
There are multiple factors contributing to the continued growth of this sector of employment. According to a CNN Money report last year, traditional full-time positions with benefits are becoming a thing of the past. Companies driven by economic uncertainty, a desire to reduce costs, and reluctance to commit to long-term employment situations, are relying more heavily on independent workers to meet their needs. Many workers turn to independent work as a way to supplement their incomes, and it is often an option for those who have been laid-off from traditional positions. Others are also choosing freelance options over traditional employment citing greater freedom and flexibility related to "being your own boss."
While independent work may not be applicable to all job fields, you will find these opportunities in a variety of contexts ranging from sales to nursing and beyond. Search for "independent contractor" on large employment sites such as CareerBuilder.com to find additional examples.
Preparing for Independent Work
Have you ever thought about being a free agent? What are your areas of expertise? According to a survey conducted by MBO Partners, a company that provides general business management and administrative support for independent contractors, 70% of today's independent workers consider themselves to be experts within their career fields. This expertise usually includes an advanced set of skills as well as accomplishments in the areas of education and training.
Determining whether you are an employee or contractor in a given employment scenario can be challenging, but it's an important distinction for all involved. The U.S. Small Business Administration (SBA) provides a list of characteristics that help to define an independent contractor as someone who:
- Operates under a business name
- Has his/her own employees
- Maintains a separate business checking account
- Advertises his/her business' services
- Invoices for work done
- Has more than one client
- Has own tools and sets own ours, and
- Keeps business records.
As with most employment situations, independent work presents both advantages and disadvantages. Working independently may give you that "I'm my own boss" perspective and flexibility, and allow you to work on projects that you are interested in, since you ultimately decide whether or not to pursue and sign a contract. Some independent workers argue that they have more job security than traditional workers, because they usually work with multiple clients at any given time. In this case, if one contract should fall through, they can still earn income through their remaining projects.
Challenges for independent workers include providing their own health insurance and managing their own retirement investments. These and other benefits of traditional full-time employment are not usually part of contract work. Independent workers are also continuously involved in marketing and business development to find potential clients and secure future contracts, ensuring a steady source of income. Both independent workers and their clients should also be aware of state and federal tax implications related to independent contracting. Independent contractors are responsible for reporting their income and calculating taxes owed.
Find out more about what it's like to be an independent worker before you take the plunge:
- Contact the SBA, including local resources such as their Small Business Development Centers and SCORE chapters staffed with volunteer mentors.
- Talk with the professionals at your school's career center and network with alumni who are currently working as entrepreneurs, freelancers, and in temporary contract positions.
- Learn about the intricacies of hiring contracts before you sign, and compare different models for establishing your pay rate.
There are many more factors to consider. Add independent work scenarios to your career exploration and job search efforts, along with traditional employment options. Be open to exploring many different opportunities as you move forward with your research.