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IT Free Agency: A Migraine For Managers

Knowledge workers continue to stampede out the door and onto their own. It's a trend that will only intensify, and it could put you at a competitive disadvantage.

Hear that steady clomp, clomp, clomp? It's the sound of another nearly 1 million Americans who in the past year alone have willingly hoofed it out of traditional employment and into the ranks of a happy and growing workforce of free agents. As of this very moment, that workforce stands at an estimated 16.9 million strong.

And if free agency gave baseball owners headaches, it may well give IT and business managers a migraine.

This is a real and present marketplace phenomenon, and its size, scope, and importance are being brought home thanks to the second annual State of Independence in America report, released last week courtesy of MBO Partners, a firm that specializes in serving as an intermediary for people who work on their own and the companies that hire them.

Just so you know, we're not talking about the underemployed or the kids who cut the grass. These are knowledge workers, very much like the IT contractors familiar to you InformationWeek readers. But now their numbers are reaching a critical mass. All told, these independent workers account for nearly 10% of the entire U.S. labor force--and an even bigger percentage once you narrow the universe down to those who provide expertise and services to business and IT managers.

[ For more on how to keep your best employees from fleeing the cubicle, see How To Keep Your Best Talent. ]

Here are a few of the report's key findings:

Growing ranks. The number of independent workers in the market rose 5.6% in the past year alone. In five years, their total is expected to reach 23 million.

Even happier to be there. Never mind uncertain income, benefits, retirement programs, and job security, 71% were highly satisfied with their lot, an increase of 13 percentage points over the number of satisfied workers in the 2011 study.

Across-the-board attraction. Nope, these aren't already-retired workers double-dipping or Baby Boomers easing into their golden years. While Boomers account for 36% of all independent workers, almost as many--35%--are Gen Xers, workers 33 to 49 years old, in the throes of the most productive years of their lives.

Changing attitudes and values play a part in the steady march to independence. As the study notes, the across-the-board imperative to do more with less hasn't exactly made traditional employment a barrel of laughs.

But the biggest driver may come down to just how easy it is to create a global corporation of one. The combination of affordable microprocessing power, the Internet, powerful mobile devices, and inexpensive cloud services is giving rise to what I call the "incredible shrinking enterprise," or the "micro-enterprise." The Bureau of Labor Statistics noted earlier this year that the size of all U.S. startups has dropped--from 7.6 persons in the 1990s to 4.7 in 2011.

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Here's the thing: These ant-like entities will challenge the corporate establishment on any number of fronts. Because of its reliance on people with transportable technical expertise, IT is especially vulnerable.

The allure of independence threatens to ratchet the competition for talent. It's not just a matter of brain drain. Even if you can manage to keep your team intact, your rivals have more options than ever before because they can dip into a rich pool of expertise. That pool will also enable smart companies to react faster and more flexibly to market conditions, and as we all know, it's all about adaptability.

It looks like more companies, in fact, are getting smarter, at least on this count. In a 2011 survey, Staffing Industry Analysts found that companies expected to bolster their use of contract workers by 26 percent over the next two years. "It's kind of an accepted way of working on both sides of the equation," says MBO Partners CEO Gene Zaino, noting that more and more companies see contingent workers "as a strategic part of their workforce."

Make no mistake: This isn't a blip. The growing number of independent workers represents a structural change in the economy.

It's also going to intensify for a reason that few have factored in just yet: Healthcare reform. If the Affordable Care Act, aka Obamacare, survives this election cycle, it will in just two more years open new options beyond traditional employer-provided healthcare plans, mitigating one of the biggest risks involved with going at it on your own.

So that clomp, clomp you hear is only going to get louder. And because of it, you might do well to clomp yourself over to your company's HR department and ask for a plan to cope with a trend that will affect the marketplace for years to come.

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Leo Regulus
Leo Regulus,
User Rank: Apprentice
9/13/2012 | 3:09:14 PM
re: IT Free Agency: A Migraine For Managers
'Stampeding Out the Door'? WHO started the Stampede in the first place? And why do these people want to only work for you only on a temp / contract basis? You start to answer these questions by LOOKING IN THE MIRROR.
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