Editor’s note: Today’s article is a change of pace from the regular content here at CPO Rising. Ardent’s contingent workforce management thought leader and resident expert, Christopher J. Dwyer, will compare and link the findings from his recent State of Contingent Workforce Management research report (click here to download the new study) with that of MBO Partners’ fourth annual State of Independence in America study, which details, from the independent worker’s point of view, the intentions, motivations and insights of the rapidly growing independent and freelance workforce.
Just over a month ago, Ardent Partners published its second annual State of Contingent Workforce Management research report. As the new research study discovered, non-employee / non-traditional talent is expected to comprise 45% or more of the average total workforce in just a few short years. Along with this growth come the added responsibilities inherent within the intricacies of the “sub-categories” of the contingent workforce, including traditional temporary labor (staffing), complex contingent labor, and independent contractors / freelancers.
According to Ardent’s research, independent and freelance talent remains a focus area for the contemporary business world, with enterprises migrating to where work is done best, regardless of its source, domain or region. Independent Contractors (ICs) and freelancers with their specialized skill sets supporting a wide range of critical corporate projects across the average organization are often considered high-level talent within any given field. MBO Partners, a provider of tools and services for engaging and managing the end-to-end processes (networking, insurance, expenses, taxes, benefits, payment, etc.) of independent contractor / freelancer management, conducts a yearly research study focused on this slice of the contingent workforce.
MBO’s report, The State of Independence in America, is an annual look at how independent talent grows and is fostered in today’s fast-paced business world and also looks at its ultimate intentions now and in the future. The 2014 edition of the study surveyed more than 11,000 independent business professionals, and today, CPO Rising is excited to “remix” its own findings (from the State of Contingent Workforce Management report) and compare its results to that of MBO’s new study:
- The growth of the independent market. The State of Independence report finds that the independent workforce is expected to grow by 6% per year the next five years, hitting nearly 40 million workers before 2020. This growth and size of this market is certainly astounding, proving that, once again, the strategic importance of the non-employee worker is not only growing in size…it’s growing in total impact (contributing 1.1 trillion dollars to the GDS and the spending equivalent of 2.2 million traditional employees). Ardent’s State of Contingent Workforce Management report also predicts considerable growth in this industry, expecting the total global contingent workforce to hit 45%-to-50% within the next three years.
- Flexibility: a benefit for both sides of the flex economy. MBO’s new report cites a few distinct reasons why independent workers choose this path, including flexibility (working where and whenever they want) and autonomy over career paths. While the two studies have distinct focuses (MBO surveyed the independent workers themselves, while Ardent’s research includes the insights from an enterprise / buyer perspective on how these workers are utilized within the typical organization), there is a strong link within this specific finding in Ardent’s report, as companies across the globe are currently utilizing non-employee talent due to its flexible nature (no long-term commitment) and the inherent skills available within this workforce. Subsequently, these two research studies agree on one key attribute: there is inherent benefit on both sides (worker and business) in the burgeoning flex economy.
- Word-of-mouth and personal networks: still the primary sources of freelance and independent talent. The majority (54%) of non-employee talent, as found in Ardent’s State of Contingent Workforce Management report, is currently sourced via personal networks. While this source of talent will fade somewhat in the years ahead, it remains a viable option for aligning project-based needs with the necessary talents and skillsets required to meet goals and objectives. MBO’s findings also trend in this direction, with 75% of independents stating that word-of-mouth referrals and personal networking as their main source of finding work. In fact, the State of Independence study found that 84% of independent workers making $100,000 or more per year rely on word-of-mouth referrals as their primary engagement means.
The growing independent and freelance talent market is not just an emerging segment of the greater contingent workforce; it’s an intricate, strategic source of unique skillsets that will continue to drive true enterprise value as contemporary organizations continue to place emphasis on blending their overall talent pools. A cross-section of research by both MBO and Ardent reveals a rising alignment between the independent worker’s intentions (stay flexible, drive autonomy over work and career path) and that of the average business (migrate to where work is done best).
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