Story on trend to self-employment — will it continue as employment picks up?
St. Louis Post Dispatch covered the Dallas Morning News on this story by Victor Godinez: “Freelancing may be replacing the traditional lifetime job.”
“The rising cost of supporting a full-time work force, diminishing worker-employer loyalty and the proliferation of technology are contributing to what may be a permanent shift away from the traditional employment model.”
“While most workers will continue to hold conventional jobs, data show that more are becoming self-employed as contractors, freelancers, consultants or owners of microbusinesses” (defined and discussed here).”
“The self-employed historically make up about 7 percent of the U.S. labor force, but that could grow to as much as 10 percent over the next several years, said Ed Potter, president of the Employment Policy Foundation, a data research organization in Washington, D.C.”
“Some employment experts argue that the shift is temporary, saying that the economic downturn pushed many workers into contract status and that they will return to traditional jobs. Others see it as long-term for several reasons.”
“Workers are discovering that the perceived primary benefit of a permanent job – stability – doesn’t exist anymore, says author Dan Pink, who published “Free Agent Nation” in 2001.
“‘There’s a base amount of insecurity in the work force, period,’ he said in an interview. ‘I can either manage that insecurity on my own or let someone else manage it for me and lay me off whenever they want.’ ”
“At the same time, employers are reeling from the escalating cost of hiring and maintaining full-time employees, according to Dr. Mike Davis, a professor of economics at the Cox School of Business at Southern Methodist University in Dallas. He pointed to exploding health-care costs as one of the biggest burdens on employers. If those costs continue to rise [that's not much of an if!] , many employers may stop offering some benefits, which Davis said would demolish another pillar of the traditional labor model.”
“In the usual scenario, once the economy improves, self-employment goes down to a normal level.” But “[e]xperts say different dynamics are at play in this economic recovery.”
“One is that technology has advanced to where many workers have fully functioning home offices. Another is that more workers – the older, seasoned baby boom population and young professionals who received entrepreneurial grounding during the tech boom – may feel confident enough to go into business for themselves.”
There’s also an attitudinal change: “We’ve told people as employers that we’re not going to be as paternalistic,” said Robert Morgan, president of the employment solutions group for staffing firm Spherion Corp. of Fort Lauderdale, Fla. “We’re going to put benefits management in your own hands. We’re going to break the traditional contract of work for life. And guess what? Workers adapted, and they liked it.”
“Morgan said that researchers in Spherion’s latest study on the emerging work force, completed in July, found that 54 percent of workers are confident in their ability to leave their current jobs, set up shop on their own and earn a living.”
Overconfident? In many cases.
What will this trend mean for employment lawyers? More focus on contracts, independent contractor relationship issues, and more demand for advice and representation from small firms growing from “microbusiness” to “small business” as they hire more employees?
