State of Independence Report : 2016

Barriers separating traditional and independent work are gradually eroding

The State of Independence is the country's longest-running end-to-end survey of the American independent workforce. This year's study shows that even as the number of independent workers fell slightly, independence remains a viable - and lucrative - option for many workers in a rebounding economy.

Against the backdrop of 5% unemployment, 5.8 million job openings, and an economy that added 2.74 million payroll jobs in the past year, the total number of self-employed workers aged 21 and over in 2016 remained close to the 2015 total at nearly 40 million. This includes 16.9 million Full-Time Independents (15+ hours/week), 12.4 million Part-Time Independents (under 15 hours/week), and 10.5 million workers who qualify as Occasional Independents, those who lack an "average" independent workweek.

"Over 40% of the U.S. adult workforce works or has worked as an Independent at some point in their lives," said MBO Partners founder and CEO Gene Zaino. "The independent workforce is a critical entrepreneurial force in America. Even in the midst of a rebounding job market and economy, independence remains a viable and desired career path."

An overwhelming majority of independent workers find the work to be a satisfying choice.

Nearly half of Full-Time Independent workers, 47%, report making more money working on their own than they would in traditional employment. In fact, amidst overall wage stagnation, the average gross income generated from independent work has risen 30% since 2011, and 3 million Independent workers earn more than $100,000 per year. More than 4 in 10 have 4-year college degrees or higher, including 20% with advanced degrees, and this distinction is even higher among Independents' large Millennial population, where nearly 6 in 10 workers have four-year or advanced degrees. Independent workers are experienced - averaging 10.5 years' experience - and generally command high salaries, with 28% of the Full-Time Independent population earning more than $75,000.

While individuals go-and stay-independent for a variety of reasons, many report control as a key driver, be it for their schedule (63%), increased flexibility (59%), or over their career (41%). They are in every generation, including 40% Millennials (21-36 years old); 27% Gen X (37-51 years old); 31% Boomers (52-70 years old); and 2% Matures (71 and older). Working in every state of the union and evenly distributed by gender across the nation, these solo workers typically put in 35+ hours per week working as Independents. While they self-identify as everything from self-employed (35%) to business owner (13%) to freelancer or consultant (6% each) they are commonly (83%) providing services rather than products and hard goods to organizations.

Together, these Independents generate more than $1.1 trillion in annual income, equal to over 6% of U.S. GDP.

As independence continues to become easier, thanks to an ever-growing infrastructure of products, services and programs, MBO expects that by 2021, almost half (48%) of the private workforce will have spent time as independent workers at some point in their work lives.

But the changes being created by independent workers aren't just about numbers. As time goes on, the barriers separating traditional and independent work will continue to erode. Even as companies add jobs, a growing number of highly talented workers will choose to work independently to earn more money without having to put up with traditional management structure.  Some highly in-demand workers will have companies effectively "compete" for their talent, while others will continue to turn to part-time independence to supplement income or to pursue a passion.

This year's study underscores that independence will remain a viable and desired option for workers in the years to come.

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By 2021, we expect that nearly half of the US workforce would affirmatively answer the question: "Are you now or have you ever been independent?"

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Related Infographic

MBO's State of Independence Research is the longest-running and most respected research on the independent workforce. Read our previous reports.

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