One of the most important trends of the last few decades is the growing use of contingent workers. This is a structural shift towards employer use of contractors, freelancers, part-timers, etc. instead of hiring full-time, permanent employees.
While hard data on this shift is not available, most analysts following this trend (including us) believe around 30% of America's workforce currently is contingent. The general consensus (again including us) is this will rise to 40% - 45% over the next decade and become the majority way people work between 2020 and 2030.
The reasons are pretty straight forward: (1) technology makes it easier to hire and manage contingents; (2) it is cheaper; and (3) it provides companies with increased business flexibility.
While everyone focuses on the lower cost of contingent workers, we believe the increased business flexibility they provide is at least an equally important driver.
This trend started decades ago, but is getting a lot recent attention because the recession has accelerated its use, and a lack of jobs draws attention to the practice.
Although he doesn't use the term, Reich's article focuses on the growing number of necessity-preneurs. These are folks who turn to self-employment because they can't find a job. The CNN article focuses on the growing use of temps.
The growth of the contingent workforce is a profound shift in America's employment structure. The secondary effects of this shift are not well understood, but it is clear it is impacting society on many levels.
We've followed this trend for years and included it in our 2010 Top 10 Small Business Trends list. It was also a key factor in our 2008 forecast that the number of small businesses would increase during the recession - a forecast that met with a lot of skepticism but proved correct (OK, I admit to patting ourselves on the back on this one).
We continue to research this trend - we are currently looking at large company use of contingent workers - and will report back with our findings.