It might be time to rethink our perception of the contingent workforce.
There are some interesting findings this week from McKinsey about the way the world of work is changing. The management consulting giant has a major new survey of 8,000 global professionals who form part of the independent workforce, or contingent workforce, or “gig economy,” or any of the many other terms for the more flexible employment arrangement that’s taking over in the 21st century.
Whatever term you use, it’s a huge phenomenon.
According to the survey, 20 to 30% of the workforce in Europe and the U.S. now count themselves as part of the independent workforce – whether it’s people augmenting their existing income with freelance gigs or dedicated contract employees working at an arms-length relationship with major companies.
The McKinsey survey studied the demographics of the contingent workforce and found that it cuts across most different demographic groups. But more interestingly, they broke down the resulting data into various motivations for why workers go into the contingent workforce, dividing them into four broad groups:
- The financially strapped – those who engage in contingent / freelance work out of necessity.
- Casual earners – those who are looking to the “gig economy” to supplement their income.
- Reluctants – those who would prefer traditional, full-time employment but do contingent / freelance work as a stopgap.
- Free agents – those who choose independent work either as a lifestyle choice, or because they feel they can get the most leverage out of their skills by not being tied to a single long-term employer.
At Argentus, we write a lot about the contingent workforce, as staffing long-term, high-skilled contractors is part of the bread and butter of our business. Most of the people we work with are in the free agent category – people who choose contract because it’s their strongest mode of working, rather than because they have no other choice. These people tend to be great candidates, but they’re also less likely to leave their contingent work if a permanent role comes along, which makes our lives a bit easier. We also work with a fair amount of what you would classify as “reluctants,” for example newcomers to Canada who are ultimately seeking full time employment, but are usually more than willing to work a contract as a first role in the country.
Here’s one interesting takeaway from the survey: Those who fall into the free agent category have greater satisfaction with their work lives, across income, education levels, age, and country. They have higher satisfaction than the other categories of contingent workers – which isn’t surprising – but the survey also found that these contractors-by-choice have higher levels of job satisfaction in a lot of areas than people holding traditional full-time roles.
Wow. It’s an interesting finding, and it also goes completely against the perception that contingent workers, as a whole, are unhappy second-class citizens compared to full-time employees. Too often, media outlets paint the contingent workforce with a broad brush – as if anyone who isn’t working a permanent, full-time job is “precariously employed.”
Don’t get us wrong – there is such a thing as precarious employment, and those who are working freelance, or contract, out of necessity, form a big chunk of the contingent workforce. There are people struggling out there. But to lump the whole contingent workforce together doesn’t tell the whole story – as if an Uber driver picking up rides to earn extra cash is in the same category of employment as a high-skilled business contractor making $75 an hour. Which is what’s so interesting about the McKinsey survey. It tries to look at the huge phenomenon of flexible employment on a more granular level, to get at the human motivations behind it.
An interesting feature in the National Post tackled a similar topic, asking why so many see the freelance lifestyle as a kind of failure or capitulation when, in fact, many freelancers (once they’ve taken the time to set themselves up) make more money than similarly-skilled full time employees.
As the Post article reports: “there are 53 million freelancers in the U.S. today and 50% of the U.S. workforce will be freelance by 2020.” They also cited the CEO of OMERS ventures’ prediction that this percentage could be even higher in Canada. This phenomenon is so vast, with so many angles, and it’s happening. So it’s worth taking a look at the individual motivations of the people involved. And maybe it’s time we started taking “free agents” more seriously.