Spend Matters recently interviewed Gene Zaino, president and CEO of MBO Partners, on his firm’s recent study looking at the rise of independent workers in America. In Part 1 of the interview, Gene began to share his thoughts on key takeaways from the MBO survey, surprise findings from the report and what it means for government and tax policy. Today, we continue our discussion with Gene.
Spend Matters: Could you share some further thoughts (continuing from the previous discussion) on the impact on government policy towards independents?
Gene Zaino: It will create a new industry to serve these independents as well as provide growth in good middle class income generation, innovation, a farm team for new small business start-ups and of course increased tax revenues. Government should stay out of the way and let the market fix itself.
SM: Where will the survey results be in a decade’s time? What will have changed?
GZ: In 2024, the number of independents will be at least half the workforce and it will be a standard expectation that most people will need to be more self-reliant with their lives and careers. The independents worker satisfaction rate will remain over 80%.
SM: Are corporations and procurement ready for this evolving transition? If not, what should they do to prepare?
GZ: No many are not. They need to build systems, processes and programs that make it safe and easy to do business with independents. They need to create functional areas that manage this and build a culture to become “clients of choice.”
Curiously, to this last point, many of the “top compensated” independent workers – which we can read as the most valuable to corporations, in the majority of cases – are likely to come from untraditional (i.e.. now staffing/MSP program) channels, according to MBO’s research:
“The importance of networks and networking for independent workers cannot be overstated. By far the most important source of work for solopreneur independents is network generated word-of-mouth referrals. Almost 3 out of 4 survey respondents listed word-of-mouth as their top method of getting work and an additional 16% listed this in their top three ways of getting work. Interestingly, independent workers making $100k or more rely on work-of-mouth even more, with 84% reporting it’s their top method and 92% listing it in their top three.”
There’s no doubt that corporate services procurement programs will have to evolve past staffing-/MSP-led efforts to tap this rising source of talent. As important from a procurement perspective, these “freelance” resources often cost 20-50% less (based on the same profile) than if they had gone through a staffing channel.