Independent work: Choice, necessity, and the gig economy
The McKinsey Global
Institute examines all the ways people are earning income, as well as the
challenges independent work presents.
Working nine to five for a single employer bears little
resemblance to the way a substantial share of the workforce makes a living
today. Millions of people assemble various income streams and work
independently, rather than in structured payroll jobs. This is hardly a new
phenomenon, yet it has never been well measured in official statistics—and the
resulting data gaps prevent a clear view of a large share of labor-market
activity.
O’Reilly Media CEO Tim O’Reilly and
MGI director James Manyika discuss how the on-demand economy is changing the
norms surrounding independent work and income.
To better understand
the independent workforce and
what motivates the people who participate in it, the McKinsey Global Institute
surveyed some 8,000 respondents across Europe and the United States. We asked
about their income in the past 12 months—encompassing primary work, as well as
any other income-generating activities—and about their professional
satisfaction and aspirations for work in the future.
The resulting
report, Independent work: Choice, necessity, and the gig economy,
finds that up to 162 million people in Europe and the United States—or 20 to 30
percent of the working-age population—engage in some form of independent work.
While demographically diverse,independent workers largely
fit into four segments : free agents, who actively choose
independent work and derive their primary income from it; casual
earners, who use independent work for supplemental income and do so by
choice; reluctants, who make their primary living from independent
work but would prefer traditional jobs; and the financially strapped,
who do supplemental independent work out of necessity.
Those who do
independent work by choice (free agents and casual earners) report greater
satisfaction with their work lives than those who do it out of necessity (the
reluctants and the financially strapped). This finding holds across countries,
ages, income brackets, and education levels. Free agents reported higher levels
of satisfaction in multiple dimensions of their work lives than those holding
traditional jobs by choice, indicating that many people value the nonmonetary
aspects of working on their own terms.
Independent work is
rapidly evolving as digital platforms create
large-scale, efficient marketplaces that facilitate direct and even real-time
connections between the customers who need a service performed and the workers
willing to provide that service. Today, just 15 percent of the independent
workers we surveyed have used a digital platform to find work, but the
so-called on-demand economy is growing rapidly.
While this digital
transformation unfolds, several other forces could fuel growth in the
independent workforce: the stated aspirations of traditional workers who wish
to become independent, the large unemployed and inactive populations who want
to work, and the increased demand for independent services from both consumers
and organizations.
The growing prevalence
of independent work could have tangible economic benefits, such as raising
labor-force participation, providing opportunities for the unemployed, or even
boosting productivity. Consumers and organizations could benefit from the
greater availability of services and improved matching that better fulfills
their needs. Digital platforms can amplify all these benefits through their
larger scale, faster matches, seamless coordination, and richer information
signals, enabling trust.
Yet some key challenges
still must be addressed for this shift to be a feasible and satisfying
development for workers. Issues such as benefits, income-security measures, and
training and credentials offer room for policy makers, as well as innovators
and new intermediaries, to provide solutions. Independent workers and
traditional jobholders alike will have to become more proactive about managing
their careers as digital technologies continue to reshape the world of work.
By James Manyika, Susan Lund, Jacques Bughin,
Kelsey Robinson, Jan Mischke, and Deepa Mahajan
http://www.mckinsey.com/global-themes/employment-and-growth/independent-work-choice-necessity-and-the-gig-economy?cid=other-eml-alt-mgi-mgi-oth-1610
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