The MBO Partners 2016 State of Independence in America report was released this week. This is the 6th annual edition of this study (Emergent Research works with MBO Partners on this study).
One of this year's most interesting findings is the total number of independent workers who work 15 or more hours as independents in a regular workweek declined versus 2015.
As the chart below shows, this decline comes after several years of effectively no growth.
The reason for this is clear from the data. The strong job market is pulling independent workers back to traditional employment.
This is especially true for the group we call "reluctant independents".
We use cluster analysis to identify this group and on average they are more likely to not have chosen to become independent, more likely to be less satisfied than average being independent and more likely to say they would prefer a traditional job.
You can see the impact of the reluctants leaving in the chart below. In general all of the independent worker satisfaction metrics have been improving over the life of this study.
Part of this is the stronger economy, which is making it easier to succeed as an independent worker. But digging a bit deeper we found declines in the number of reluctants is also a major factor.
In other words, one reason the overall scores are going up is because folks unhappy with independent work have been able to return to traditional jobs.
There are a number of interesting implications from this data:
1. The business cycle plays a greater role in the choice between independent and traditional employment than we (meaning Emergent Research) realized. Yes, we knew it played it a big role and we spend a lot of time looking at the competition between traditional jobs and independent work.
But the independent workforce continued to grow well into the economic recovery and despite steep declines in the unemployment rate from 2010 to 2014. This led us to believe the business cycle impacts were not as strong as they've turned out to be.
2. Having said that, the longer term, powerful structural trends driving the growth of the independent workforce are still in place. This, coupled with the fact that the independent workforce declines are relatively modest despite a very strong job market, lead us to continue to believe the number of independent workers will continue to grow.
It's likely the numbers will pick up again in the next 18 months, especially if the job market weakens (which may already be happening).
Bloomberg View's Most People Just Want a Regular Job provides additional coverage of this topic.
We'll have more on this and other data from the 2016 MBO Partners State of Independence report over the next couple of weeks.