Sizing the independent workforce: A by-the-numbers breakdown

The Department of Labor announced its intention to reissue a survey of America’s contingent workforce population that was last completed in 2005. One thing’s for sure, the independent workforce is growing faster than ever before. And that’s a very, very good thing.  

But we’ve noticed that the actual size of the independent population – particularly when one counts the “gig” or “on-demand” economy, gets tricky.  Who qualifies as an independent, and with what degree of regularity must one work to be counted?

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The Department of Labor’s 2017 report, a joint effort of the Census Bureau and Bureau of Labor Statistics, will be a welcome and needed audit of this growing workforce.  

But the question isn’t just about how big the independent workforce is, but more about how to tally the size accurately. 

One thing is obvious – the sizing of the independent workforce isn’t an apples to apples comparison, nor is it an easy proposition.  

The lack of standard definitions feeds the confusion. One person’s gig worker can be another’s on-demand worker – both of whom may or may not be a part of the “Uber Economy,” “The On-Demand Economy” and “The Sharing Economy,” depending on with whom you speak and what you read.  

The key is to parse out workers into groups, such as part-time workers, full-time workers, and occasional independents.  

The State of Independence survey by MBO Partners, the industry’s longest-running survey of the independent workforce, does this. The 2015 data shows that independents currently stand 30.2 million strong. This number accounts for the number of people who regularly work both full and part-time as an independent. This does not count “Occasional Independents,” or those who pursue freelance or independent work on an “as needed” or “as desired” basis. This population is estimated at an additional 11.9 million individuals in 2015. That brings the total of the adult independent workforce to 42.1 million in 2015, an increase of 5.7 percent over the 39.8 million in 2014.  

Notably, this number is less than other surveys in the industry – Freelancer’s Union, for example, cites 54 million independents in its 2015 “Freelancing in America” survey, part of a partnership with talent marketplace Upwork. The number discrepancy is easily attributed to a combination of methodology and semantics – this survey found workers that have “done freelance work in the past year,” which accounts for everything from traditional independent contractors (full-time, “traditional” freelancers) to freelance business owners (who may have employees) to moonlighters and diversified workers, who take on freelance or on-demand work on an as-needed basis.

Other surveys find numbers for specific subsets of the contingent workforce; Intuit recently delivered a forecast saying that the number of people working on-demand jobs will grow from 3.2 million Americans to 7.6 million by 2020. Brookings Institution found that number to be about 600,000 in a similar survey with a more limited definition of on-demand workers. Another survey from Aspen Institute found that 45 million Americans have ever worked or offered services in the on-demand economy, although this survey’s methodology has been called into question by researchers for including work found on via gigs on sites like Craigslist, and also including cumulative (rather than date-restricted) data in their tally.  

It’s enough dueling data to make your head spin! 

But size is only one part of the issue.  

We are hopeful that the DOL and BLS work with those within the industry to standardize these definitions, so as to enable apples to apples comparisons—as well as baselines for industry growth—in the future. 

However, the need goes deeper than just a common lexicon or a standard market size; we need real solutions that enable independents to seize the opportunity to forge their own independent businesses.  

At the end of the day, there is broad agreement that the Independent workers are a growing force within the US economy.  At best estimate, independents will form 40-50 percent of the total workforce by 2020.  

As such, we look forward to continuing the discussion with the industry’s key players to arrive at solutions that will enable the independent workforce to ensure responsible and accountable funding of important social safety nets, and enable organizations of all sizes to easily and compliantly engage this workforce.  

Zaino is the founder and CEO of MBO Partners.

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