The Changing Nature of Work: The Solo Entrepreneur

The Rise Of The Solo Entrepreneur Intelligenthq
The Rise Of The Solo Entrepreneur Intelligenthq

The independent workforce is growing, and fast. There are many changes that have led to this occurring. One of the most important is the development of the Internet, and in particular companies like Elance, Guru, O-Desk and Freelancer that have led to organisations being able to outsource to independents located all over the world. This has led to many people that would not have been able to in the past, following an independent career.

MBO Partners examines independents in the USA every year, and its 2014 survey had some interesting findings. In 2014, more than 11,000 independent workers were surveyed and several hundred were also interviewed. Looking at definitions first, an “independent” is someone that works more than 15 hours a week independently of a company. In fact it was found that most of these people work more than 35 hours a week, and this has led to them being termed as “solopreneurs”. These people keep doing their own thing despite the fact that the economy is improving and there are more jobs and more hiring than in recent years. It was also found that there are “Side-Giggers” who work less than 15 hours per week in independent roles. They do this work either in addition to being retired, in addition to family responsibilities, or in addition to a regular job. A staggering $1.1 trillion of revenue was calculated to have been generated by solopreneurs during 2014. This means that as a group they cannot be overlooked. In the USA one in 12 households were reliant on independent work for more than half of their income.

What Leads People To Be A Solo Entrepreneur ?

It was found that there were three main drivers to being an independent. One was wanting control over the kind of work performed. Another was the flexibility to decide when and where they will work. The third is the autonomy to work in the way that they feel is best. These findings were true of both Solo entrepreneurs and side-giggers. Side-giggers were also motivated by making extra cash by supporting their income with extra work. Interestingly it was reported that 82% of independent workers were highly satisfied or satisfied with their working style, with far more being highly satisfied than just merely satisfied. Most planned to continue working independently.

Other interesting findings include the fact that many independents hire other independents to help them out. Though most are Solo entrepreneurs and do not have employees as might traditionally be hired, they instead hire other independent workers to help them out. It was found that in 2014 38% of solopreneurs spent $92 billion hiring 2.2 million full time workers via a contract hiring approach. Also very interesting is the fact that one in seven independents was found to be thinking of building a bigger business. Clearly these individuals will create additional economic activity and help with the building up of the economy. Independents also have multiple revenue streams going to make sure that they do not have too much risk. Some have a job either full time (4%) or part time (15%) to achieve this spread of risk.

Image source: MBO Partners
Image source: MBO Partners

 

One factor that is perhaps unsurprising is that women and men have different reasons for being independent workers. While the study found that women and men choose independence at close to identical rates, have similar satisfaction levels and plan to stay independent at similar rates, the reasons for turning to independence in the first place or staying independent differ. In the case of women it was found that they want flexibility and work that will fit well with their lifestyle. Men had a different approach and want to be in control, be their own boss and be able to maximise their income.

The report shows that the independent workforce is likely to continue to grow. Reasons for this are given to be structural shifts in the economy and a continued interest in controlling one’s own future career path and personal life. Another important reason is the lowering of the barriers to entry to getting started in this type of work. It is consequently expected in the USA that the solopreneur workforce will reach 24.5 million by 2019. Independents are no longer marginal and this begs the question of how governments worldwide will handle them in the future, given that they have different priorities and needs than other businesses

How is the situation in the United Kingdom ?

It is not only the US that has seen a raise in Solo entrepreneurs. In a study done by Benedict Dellot for the RSA, the researcher gave evidence how  self-employment has been increasing dramatically in the UK since the millennium. In 2014, one in seven of the workforce were self-employed. Just as the solo-entrepreneurs, the British self-employed don´t tend to create extra jobs. In Dellot´s opinion, that’s a problem because the economy needs small businesses to prop it up, by creating jobs. According to the researcher  it is necessary to  have a different approach to the situation in order to boost employment in these small businesses and by sole traders.

The overall conclusion is that just as the American solo entrepreneurs, UK self-employed people value the same set of values as their American peers: independence, flexibility and the possibility of part-time. Mid-way through the second decade of the new Millenia, it is now a fact that the self-employed/sole entrepreneur is gaining momentum. In the Social Era, work doesn’t look like it used to.

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