Study: Most Independents Become Their Own Boss by Choice

    Though there’s an idea that the massive layoffs during the recent recession prompted thousands of workers to set up their own businesses when they couldn’t find new jobs — that notion’s not borne out in a recent survey from OnForce.

    The company, which brings together local independent contractors and regional companies bidding on work contracts, polled 533 of its members. Among its findings:

    • 60 percent of them willingly joined the independent work force.
    • Less than 24 percent were laid off.
    • Less than 17 percent couldn’t find full-time work.
    • 56 percent wouldn’t consider working for someone else even if they were offered comparable salary and benefits.

    These contractors perform work such as installing wireless networks at local businesses, installing updated point-of-sale systems and installing surveillance equipment at retail locations.

    “These folks value the independence they get as contractors. They have confidence in their own abilities and skills — and they like working for themselves,” Bill Lucchini, COO of OnForce, told me.

    He said the bulk of independent contractors are in their 30s and 40s.

    “These are folks that are confident that they know their industry, they have connections, they can run their own business and they have a higher level of commitment to the business and to growing the business than in other age groups,” he said.

    Indeed, contract and consulting work have been among the hottest areas of job growth. Two areas tracked by the U.S. Labor Department — Management and Technical Consulting Services along with Computer Systems Design and Related Services — have shown job gains for 29 consecutive months, adding 291,200 positions during that period, Foote Partners notes in its latest report.

    In addition to the flexibility and independence these workers gain, on average, consultants bring home at least $20,000 more than their full-time counterparts, Dice reported in April. Tech workers in particular find they can cherry-pick their assignments and sculpt their own careers in that way.

    Noting the percentage in the OnForce survey who said they were unwilling to go back to a traditional job, Sumair Dutta, vice president and principal analyst of service management at Aberdeen Group, told me it will be interesting to see whether that holds true in an improving economy.

    “Depending on the demographics we see different motivations for contractors to become self-employed tied to flexibility and quality of life. For these workers we doubt an improving economy will bring them back to regular jobs. To the contrary, an improving economy will see organizations take a more cautious approach towards hiring, therefore increasing the demand for contract workers,” he said.

    Almost 1 million people joined the U.S. independent work force in the past year, bringing the total to 16.9 million people, according to a study by MBO Partners, a company working to help independent workers. That report, however, was not specific to the IT work force.

    However, it found some interesting insights, including:

    • The level of satisfaction grew. Independent workers in 2012 said they are highly satisfied (71 percent) or satisfied (15 percent) with their work situation, compared to 2011 when 58 percent indicated they were highly satisfied and 21 percent satisfied.
    • Their main concerns are uncertain income stream (55 percent), concerns about retirement (40 percent) and worries about a lack of job security (36 percent). Independents also are highly concerned about health care coverage, Lucchini said.
    • Only 13 percent said they plan to seek a traditional job over the next 24 months.
    • Seven in 10 independent workers report that they get work assignments because they offer a specialized skill that requires certification, special training or education.
    • Younger independents bring more education to the marketplace, though independents over age 67 tie Gen Y for having the highest share of graduate or professional degrees (30 percent).
    • About half are women.
    • Gen Y is less likely to have chosen independent work completely (40 percent vs. 61 percent of others). To an extent, for them, it’s been a way to navigate the difficult economy.
    • Gen X is more likely than any other generation to have chosen independence completely.
    • Boomers (ages 50-66) chose independent work because they’re fed up with the politics and lack of security in the traditional workplace. Over half — 54 percent — said that the worry of workplace politics played into their decision to go independent (vs. 41 percent others). One out of 4 indicated that they faced a job loss prior to working independently, but only 1 out of 7 say they became independents because they couldn’t secure a permanent job.

    “Gen Xers and Baby Boomers have generally lived the corporate life and have the networks, finances and expertise to build a small enterprise on their own,” Dutta said. “While there is still a high degree of risk, these folks are a lot more protected prior to jumping into self-employment. On the other hand, Gen Yers generally don’t have experience and networks to fall back on and are taking on a greater degree of risk for the perceived upside … The issue is the predictability of revenue, especially in down times.”

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