Gene Zaino (US) - Challenges and Opportunities for the Independent Worker (Part 1)

In part one of his new two-part series on independent working, Gene Zaino looks at the challenges faced by independent professionals.

The independent workforce is emerging as a dominant sector in the United States.  In fact independent work is predicted to make up more than half of the private workforce by 2020.  But is it right for you?  The opportunity to have greater control over life and work has led many professionals to ponder the possibility of independence. While the benefits can be alluring, independence is not without challenges. This two part article will present a robust picture of independence, examining both the challenges and opportunities for the autonomous worker. Independence is not for everyone, but equipped with the proper information about the risks and rewards can help you decide if and when to take that step.


The independent worker has freedom and flexibility but also inherits the challenges, risks, and infrastructure of the employer. As a business-of-one, the independent worker assumes the responsibilities of a traditional employer including providing a steady pipeline of work, benefits, retirement programs, insurance, and taxes. In fact, according to a landmark study conducted by MBO Partners, worry about job pipeline (46%), planning for retirement (46%) and managing business details (28%) were among the key burdens identified by independent workers.

Finding work: The independent worker does not have a traditional employer providing a steady paycheck.  The freedom of choosing what, how and where you earn your living comes with the responsibility of developing a steady stream of work (aka your “project pipeline”). Building a network of relationships and opportunities comes naturally to some, but for others it is the most frustrating part of independent work.  But without business, you’re not in business. For an independent, finding work is a top priority. Most successful independent consultants receive the majority of work from their trusted network.  It is important to create an environment and a process that delivers an ongoing flow of opportunities, and realize you will have to continuously nurture a strong, active network.

In addition to developing and marketing your personal brand, you will also have to learn to properly qualify opportunities. Qualifying opportunities allows you to determine if you and the client are a good fit, and if the client is willing and able to buy. Many rookie independents make the mistake of failing to determine fit, and are so eager to work take on assignments for the money. Working outside of your area of expertise, over promising on deliverables or taking on a client that is not a good fit can quickly damage your credibility and opportunities for future business.

Your Business: As an independent you are the company and the worker. You need to be totally self-sufficient. Taking care of taxes, billing and collections; business and health insurance and compliance issues are the realities of operating your own business. You are also responsible for your personal benefits and retirement program. Unlike the traditional employee whose taxes are automatically deducted from their earnings, independents are responsible for both income tax and self-employment tax. In fact, the number one mistake made by independents is not properly saving for taxes. Failure to account for self-employment tax (or to fund quarterly tax payments,  if applicable) can result in an unplanned tax burden that may also include penalties and interest for underpayment.

The balancing act: The independent worker must manage the administration inherent in running a business while balancing new business development and client deliverables.  Aligning these details while also maintaining the freedom and flexibility of independence can be overwhelming. However, independent consultants can be happily self-employed by partnering with companies that offer an infrastructure for managing the risks and administrative details of business.  Outsourcing the details of running the business allows you to focus on doing the work you love and enjoying the benefits of independence.

Now that you’re aware of some of the challenges, in Part 2 (to be published April 12th) we will examine the opportunities of independent work.

By Gene Zaino, president and CEO of MBO Partners