From benefits to presidential hopefuls to everyday technology, we saw the birth and evolution of many new trends and ideas in 2015, leading to massive shifts in the American workforce. In this article, we take a look back at the key events of 2015, why they matter to independent contractors, and from there explore what self-employed professionals should expect from the coming year.
The continued empowerment of the independent workforce has been one of the year’s top stories. But as more and more workers chose independence, the need to obtain and retain valuable benefits has become a top-of-mind issue. In the latter half of the year, discussion around a “safety net,” often touted in the form of portable benefits or individual security accounts partly founded by companies for whom ICs work, has become a key issue.
This discussion will surely continue in 2016. To date, many companies seeking contractors, including ride-sharing behemoth Lyft, have begun to provide their contract staff the opportunity to contribute to their own retirement plans.
Companies will also see an increased number of workers going independent thanks to easily accessible healthcare, thus expanding their talent pools, but will also likely see a push to offer to pay some benefits and taxes on behalf of their independent workforce. This new year may also see proposals by corporations and lawmakers alike that offer a benefit model supporting the independent lifestyle: a flexible, pro-rated, available to all “package” that is portable and universal – one, that much like the independent worker, can be taken in and out of various work scenarios, regardless of employment status.
The Affordable Care Act has opened the door for many self-employed professionals to pursue the independent life, contracting for business, since they can now get affordable health insurance on their own via their own state-based exchange or the federal marketplace. 2015 has seen both awareness and enrollments grow. Not only are independent professionals taking advantage…they’re avoiding serious tax penalties for being uninsured. While we are all aware that the marketplaces and HealthCare.gov aren’t always the easiest things to navigate, the sentiment is certainly in place to make these an overall “positive” development for ICs.
Independent contractors have now become “empowered risk takers,” thanks to the Affordable Care Act. They now have the power of choice when it comes to the plan that best works for the health of their households. They can also take the risks they need to grow their career and business, courtesy of government assistance that assists in paying for health insurance (via subsidies and tax credits).
Affordable Care Act enrollment for independent contractors will continue to grow in 2016, especially as the contract talent market continues to blossom.
While the Chinese zodiac dictated 2015 to be the year of the goat, the independent workforce has no reason to be sheepish in proclaiming 2015 to be the year of the Gig Economy. According to our State of Independence report, America currently has an independent workforce of 30.2 million people, with that number expected to grow to 45 million by the year 2020.
Many cite the gig economy’s birth as occurring in the post-financial crisis era – the internet marketplace had emerged while many Americans, out of steady jobs, were finding new ways to support themselves and their families. People began to “capitalize on their own hands, minds, things, and hours.” While the independent professional landscape continues to grow in size, and members, many believe the numbers don’t even capture the true population of this part of America’s workforce.
There are many skeptics, however, due to the recent court cases calling in to question how companies classify an employee versus an independent contractor.
No matter how these independent workers are classified (employees, contractors), their work will continue in the same style. The gig economy population should anticipate steady growth, regardless of whether they majority are defined as the “employee” population or the “independent contractor” population.
While the presidential election is still nearly a year away, many candidates have begun to address the independent workforce – specifically, the gig economy. It appears independent professionals have some strong allies, while other presidential candidates remain skeptical.
Democratic hopeful Hillary Clinton’s opinion of the gig economy is mostly negative; when concerning “on-demand” indepenents (Uber/Lyft drivers, Handy house-cleaners, etc.), she has gone on the record to say that this component of the gig economy is “raising hard questions about workplace protections and what a good job will look like in the future.”
Other candidates, however, have embraced the products, services, and advantages of the gig workforce. Jeb Bush made it a point to take Uber to a series of interviews with start-up companies in San Francisco. Recent articles have cited Marco Rubio’s love for the gig worker, defending Uber and principles of the sharing economy. Ted Cruz has also weighed in on the matter, and his campaign reports the most Uber use/spending of any presidential campaign.
It is important, however, to make note that independent professionals will have a very strong voice in the new election season.
2015 has seen a wealth of applications and items whose use enhanced the independent contractor environment, ranging from organizational tools (Dropbox, No Do This, BetterBuzzer, etc.) to project management aids (MindMeister, FreedCamp, Evernote, etc.).
In the new year, the industry should continue to see a trend toward products and services that are simpler, more streamlined, and mobile friendly to complement the work styles of the “always on the go” professional. The popular applications of today will continue to evolve and improve with add-ons and other full-service features (e.g., Google Apps, Mint, etc.).
2016 will also see MBO Partners’ launch of a state-of-the-art platform that benefits independents and companies alike, connecting opportunities and reputable independent contractor, simply called Connect™, currently in pilot phase.
Co-working spaces are booming, many of which offer a whole host of benefits and choices, ranging from public events and networking opportunities, to exclusive “library-like” zen environments.
The feeling of camaraderie, often found in traditional office settings, can also be seen in these newer co-working environments. On a simpler level, each member of the office space contributes to its overall upkeep. Some go a bit deeper; as the lines between work and play continue to blur, one hotel in Austria took advantage of this mindset, letting travelers not only book a specific room (and request certain personal upgrades upon arrival), but also to rent dedicated co-working space in the lobby, and participate in a virtual “marketplace” that lets them network with others currently staying at the hotel.
With these environments constantly being enhanced and reworked, 2016 may bring some fascinating trends and new questions. Work hours may become “longer” in these newfangled places and situations, but when it incorporates social elements, networking, and the like, is it really “work” time? Productivity and stability will also be a focal point of the co-working spaces of the present and not-so-distant future.
In 2015, it happened. Millennials surpassed Baby Boomers to become the second largest independent worker generation (behind Gen-X). Additionally, they comprise 30% of the total independent contractor population, and are slated to overtake Gen-X within the next 2 years.
While no one can confidently predict how Millennials will continue to age, we do know that they have a preference for independence – most millennial independent contractors plan to stay self-employed. We also know they have a penchant for the creative, as 1 in 5 identify as “creative professionals” compared to 1 in 10 non-Millennials.
Millennials also have a different work philosophy than past generations: they see themselves as “working to live,” and make their work-life balance a priority.
Our 2016 take, to all generations working with/for/alongside Millennials: listen and learn from them, they’ll be running the show and have the full majority voice very soon! As they are the largest generation in the overall workforce, there is much to learn, but also many opportunities to educate them as well in a work environment. Lead together!
According to the latest Department of Labor report regarding the job market, the economy is continuing its strong “bounce back.” The independent workforce has seen 12% growth (including very significant growth in those independents in the $100,000+ revenue group), compared to 7% growth in overall employment over the last 5 years.
Unemployment is at 5%, a seven year low. The question now becomes, how does one find the best independent-contractor job opportunities? Independent professionals and enterprises alike need to turn to a resource that accurately presents opportunities that connect the right talent with the right projects.
No More Monkey Business
As the Chinese zodiac tells us, 2016 is the Year of the Monkey, but this is certainly a time where positioning yourself for future success should not be taken lightly. We look forward to the new trends and top stories the future holds for the independent professional, and of course the challenges and successes that come along the way.
We’re ready to help you lead the charge into a prosperous new year. Contact us today to learn more.
News and notes for independents and their clients. This is the August 8, 2016 issue.
This blog shares 10 business books (and authors) that have been instrumental in helping the professional development of a number of MBO Partners staff and executives. We recommend adding them to your reading (and following) lists!