Where Have All the Workers Gone?

Low unemployment is frequently cited as the reason for a shortage of qualified job candidates.

But a change in worker preference contributes to recruitment challenges. The gig economy is large, and continues to grow.

What the Numbers Show

The McKinsey Global Institute (MGI), the business and economics research arm of management consulting firm McKinsey & Company, estimates that the total number of independent workers in the United States is now 54-68 million, and represents approximately 27 percent of the workforce.
Other estimates vary, and some are higher.
Brad Smith, CEO of Intuit, a provider of business and financial software that includes the popular TurboTax, recently said the gig economy is now estimated to be about 34 percent of the workforce and is expected to grow to 43 percent by 2020.

Who These Workers Are

Independent workers include individuals in a wide range of occupations, from business consultants to landscapers, financial service professionals to plumbers, and so many more. In fact, there are few, if any, employment categories that don’t include independent workers.
These workers also have a wide range of skills, educational backgrounds, and employment histories. CEOs and other senior executives have left the corporate arena to become independent workers, and teachers have abandoned the classroom.
Any preconceived ideas you have about today’s independent workers are probably wrong. They are young, old, middle-aged, and natural-born and new citizens.

Why They Work Independently

The reasons people are independent workers vary as much as their backgrounds and job descriptions.
Some became independent workers out of necessity, when they lost their jobs during the recession. Others chose the entrepreneurial life for the flexibility it offers. Still others like the idea of being a small business owner, even if that business is only a business of one.
Many independent workers cite the ability to control their own destiny as a primary reason for their choice. They say working independently allows them to set their own hours, choose the people they work with, and take on only those tasks they enjoy.

What They Compromise

Independent workers also face challenges, however. Among these are financial challenges, like the rising cost of health insurance, higher income taxes, and business expenses.
For some, income stability is a challenge as well.
Yet, most wouldn’t change their employment status.

What Companies Have to Offer

So, where does this leave companies with open jobs?
Companies often have positions that could be filled by independent workers. But it requires a shift in the corporate mindset.
The old school of thought is that contractors are not as loyal, not as reliable, and won’t do the jobs as well as traditional employees. Companies that routinely work with contractors say otherwise.
Not all positions lend themselves to contract arrangements, but many do. As the number of independent workers continues to grow and qualified traditional employees become more difficult to find, companies will want to take a closer look at their job openings.

Paula Santonocito, Contributing Editor for Recruiting Daily Advisor, is a business journalist specializing in employment issues. She is the author of more than 1,000 articles on a wide range of human resource and career topics, with an emphasis on recruiting and hiring. Her articles have been featured in many global and domestic publications and information outlets, referenced in academic and legal publications as well as books, and translated into several languages.