The McKinsey Global Institute (MGI) has recently published the results of a new study it led into contracting, in ‘Independent work: choice, necessity and the gig economy’. The study shows that 97% contractors are much happier than their permanent counterparts, demonstrating higher satisfaction in practically all aspects of their work. Reflecting a deep sample pool of workers across the US and key European countries, the report shows that:
– In the EU as a whole, 68% of independent workers have chosen this route;
– In the UK alone, 57% of independent workers are female;
– Contractors consider autonomy and flexibility as the key benefits vs employment;
– There are roughly 162 million contractors in the US and EU; and
– Of this number, three in ten are contractors and four in ten are freelance, ‘casual earners’.
MGI found that people who do not work in their preferred manner, whether in independent or in traditional jobs, are less satisfied than those who are able to follow their preferences. Those working independently out of necessity reported being happier with the flexibility and content of the work they do as well as a higher sense of gratification overall.
Not unsurprisingly, the area where contractors didn’t report higher levels of work satisfaction than permanent staff were in their sense of security over income and work-related benefits. Overall however, self-governance and control over one’s lifestyle were reported as more critical factors. MGI points out that “these findings echo a large body of academic work pointing to the importance of choice, autonomy, and self-agency as key drivers of worker satisfaction. Free agents (contractors) cite higher satisfaction than traditional workers across issues ranging from the creativity they can express to opportunities for learning and recognition.”
Challenges for Contractors
MGI finds that “Lifetime employment at one company is largely a relic of the past, putting the onus on individuals to map out their own career trajectories, looking for their own business opportunities and taking charge of developing their own skills along the way.”
As more of us become contractors, MGI points out that we should continue to develop “differentiated skills and services to avoid becoming part of a low-wage generalist pool.” Contractors should foster administrative and planning skills to prepare for peaks and troughs in earnings, to effectively manage all tax and legal compliance, as well as planning for retirement. MGI proposes that contractors create financial solutions to help them maintain a steady income between assignments.
Thinking of becoming a contractor?
As the MGI survey shows, more and more traditional workers are opting to work as contractors and they are happier. iContract will help you find and manage your future contract. Register today and take advantage of our extensive resources and services tailored for your contracting lifestyle.