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Want To Go Independent? Join The 17.8 Million Independent Workers In The U.S. Today

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When I was in the midst of my 18-year corporate career, corporate life was all I knew and all I focused on. While I saw other people in my life who were successful entrepreneurs and independent workers, somehow I thought I wouldn’t be capable of forging my own path successfully. I’d grown up with a father who was a loyal General Electric guy for 30 years (with seven patents and a long history of success), and that was my model for a rewarding career. The problem was, after I hit 40, the challenges I faced in my corporate life far outweighed the positives, and the trajectory I was on no longer fit my personal preferences, style and values.

After a brutal layoff in the days following 9/11, I decided that I no longer would allow myself to be at the whim of a corporate employer. I wanted more control and authority over my work and life. So I took the reins and began to steer my own course, first with independent work then launching my own small business. And I’ve never looked back.

Turns out millions of professionals in the U.S. have felt as I have and done something about it. Many have found that independent work and running their own businesses has many amazing benefits that can pave the way for more control, leadership, flexibility, reward and success.

To learn more about the state of independent workers, I was excited to catchup with Gene Zaino, President and CEO of MBO Partners to hear more about the 2015 State of Independence research they’ve conducted. MBO Partners is the largest provider of independent contractor engagement solutions. Their topline data demonstrates that the full-time independent workforce - with close to 18 million workers earning a significant portion or all of their income outside of traditional employment - is a permanent and rapidly growing portion of the American economy. In addition to these full-time independents, there are 12.5 million “side-giggers,” who take on part-time independent work.

This infographic shares some key data tracking the rise of the independent workforce in America and independent workers’ changing lifestyles, motivations, and satisfaction over the last five years.

Some highlights:

The American labor market has fundamentally transformed: Over the last five years, the overall economy grew by 7%, but the independent workforce saw 12% growth, with close to 18 million full-time independent workers in 2015.

Growth in the independent workforce will continue: 4 in 5 independents plan on staying independent, and 1 in 7 non-independent workers plan to join the group in the coming years.

Independent lifestyle is better than ever: The number of top-earners making $100,000 or more as independents has ballooned 45% since 2011, and 4 in 5 independents say they are happier being independent.

Here’s what Gene shared:

Kathy Caprino: Gene, can you please share more about the latest stats you have on independent workers?

Gene Zaino:  Our State of Independence research shows that over the past five years, the independent workforce—individuals making a significant portion or all of their income outside of traditional employment—has grown 12 percent, nearly double the 7 percent growth in overall employment.

The independent workforce, a smaller portion of the overall labor pool before the recession, is a powerful force in the post-recession American economy. This group has seen unprecedented growth, bucking some predictions that a recovery in the job market would lure independents back to traditional employment. The majority of those who went independent did so by choice and plan to stay that way.

The full-time independent workforce has grown from 15.9 million people in 2011 to 17.8 million in 2015. In addition, there are 12.4 million “side-giggers” who take on part-time independent work on a regular basis and another 11.9 million people who occasionally do independent work.

With four in five independents planning on staying independent, and one in seven non-independents hoping to join them, it’s clear that the independent workforce is an important and growing part of the American economy.

Caprino: I've wondered about both the positive – and negative -- effects on the economy of the surge of independents. What does it means for both these individual independents and for the economy?

Zaino: The growth in the number of independents is positive for the economy because it means greater opportunity for both individual workers and companies.

As an independent, you set your own hours, choose who you work with, and have greater control over your income, which depends on your ability to win clients. With so much control over their work and personal lives, 79 percent of independents say that they are happier on their own than in traditional employment. And the flexibility to work whenever and wherever they want, allowing for a midday run or cooking a healthy meal at home for example, is part of the reason that 59 percent of independents say they feel healthier working solo.

And companies adapting to the new, more independence-oriented economy are more easily able to find and hire top talent for short and long-term projects, allowing them to run more efficiently.

Americans are entrepreneurial, and the move towards independence benefits the economy overall. In addition to the growing, permanent solo workforce, many independents plan to expand their solo work into multi-employee businesses with additional hires, creating more jobs.

Caprino: How about independent workers making over $100,000 - what fields are they in and what are they doing differently from those who are floundering?

Zaino: There are more than 2.9 million high-earning independent workers – those making over $100,000 per year – in the United States. This group has grown more than 45 percent over the past five years, and now represents roughly 10 percent of all independents. And they aren’t limited to just a few industries. We are seeing an increase in high-earning independents in a variety of industries, from management consulting to technology, marketing, and project management.

What makes high-earning independents so successful is often the depth and breadth of their experience. More experienced independent workers can more easily get bigger projects and can charge a higher rate. Many of the independents earning less initially grow their income over time as they build experience and marketability.

In addition, because independent work depends on one’s ability to win projects, those who have honed their skills in seeking out and winning project opportunities are able to earn more.

Caprino: What are your top 5 tips for new independent workers to succeed financially and thrive in this new direction?

 Zaino: Here are five things that help independents achieve success:

Leverage your network.

Even in the age of high-tech business networking tools, there is no substitute for personal connections forged through your good work in the past. Word of mouth is a vital tool for discovering project opportunities, so cultivating positive relationships is key. A referral from someone who can attest to your work quality goes a long way.

Know your worth.

Many first-time independents find it difficult to determine the right price for their services in order to be competitive. While it may be easier to win your first contracts by offering the lowest rate, future referrals may expect the same low rate again and again. Don’t get trapped in this cycle. Instead, do your research and figure out what the market rate is for the work that you’re doing and set your rate accordingly.

Effectively manage your workload.

While it may be an attractive option to take on every client you can to maximize your income, make sure that you can handle the workload. Biting off more than you can chew means you risk your reputation if you can’t deliver.

Operate like a business.

Even though you’re on your own, having professional contracts, invoices, and a business plan are essential. Not only are these important in projecting an image of professionalism, but they’ll help keep you organized and on track.

Don’t be distracted by “back office” tasks.

It’s hard to run a one-person software engineering or consulting business when you’re also acting as your own accounting, billing, and contracting departments. There are companies like MBO Partners out there to take care of this necessary but non-core work so you can bill more hours doing what you do best.

Caprino: How does MBO Partners fit into the overall picture of the independent work landscape?

Zaino: Independents are a growing part of the American workforce, but so many people and companies are ill-equipped to navigate the regulatory and administrative processes of going solo or engaging independents. MBO Partners works with company HR departments and with individual independents to make the process of engaging smooth and compliant.

MBO Partners empowers the independent workforce by delivering the tools, systems, and processes that they need to manage their businesses. Independents, especially newly independent workers, often don’t have the support they need to operate as efficiently as possible. In addition to the actual client work independents do, they spend time and money on things like payroll, benefits, compliance, and accounting that every business needs. When they partner with MBO, we handle these things so they can focus on their project work.

For more information, visit MBO Partners.

To building a successful independent career, visit kathycaprino.com and my podcast Best Work/Best Life