Independent work: choice, necessity, and the gig economy

The growth of independent work could create efficiencies and strategic 
advantages for companies and organizations
Companies, government agencies, nonprofits, and organizations of all sizes could benefit 
from the ability to hire independent workers—and many are already doing it. One key 
advantage is the ability to expand their workforces in periods of peak demand and then 
revert to a leaner core team when the workload returns to normal. They can also hire quickly 
if the business is expanding rapidly. Furthermore, they can look for people with exactly the 
right skills when they need them. 
For many companies and other organizations, work has become increasingly project-based 
in nature, and they can benefit from accessing the right expertise to round out teams. In 
the marketing and advertising industries, long-term retainer deals to provide integrated 
84
  While studies suggest that happiness and productivity are linked, the evidence is mixed on this point. 
See, for example, Andrew J. Oswald, Eugenio Proto, and Daniel Sgroi, 
Happiness and productivity
, IZA 
discussion paper number 4645, December 2009; Julie Moreland, “Improving job fit can improve employee 
engagement and productivity,” 
Employment Relations Today
, volume 40, issue 1, spring 2013; and J. Anitha, 
“Determinants of employee engagement and their impact on employee performance,” 
International Journal of 
Productivity and Performance Management
, volume 63, issue 3, 2014.
85
  Martin Dewhurst, Bryan Hancock, and Diana Ellsworth, “Redesigning knowledge work,” 
Harvard Business 
Review
, January-February 2013.
86
  John R. Baldwin and James Chowhan, 
The impact of self-employment on labour-productivity growth: A 
Canada and United States comparison
, Statistics Canada, August 2003.
87
  Rudy Tellis Jr., 
Digital matching firms: A new definition in the “sharing economy” space
, US Department of 
Commerce Economics and Statistics Administration, ESA issue brief number 01-16, June 2016.

---

88
McKinsey Global Institute
4. Making independent work a win for all stakeholders
services are becoming less common as the share of project-based assignments grows.
88
 
Some pharmaceutical companies run clinical trials mainly with independent workers, 
from scientific researchers to administrative staff. Previous McKinsey research shows 
that two-thirds of companies with high adoption rates for digital tools expect workflows to 
become more project-based than function-based and that teams in the future will organize 
themselves accordingly.
89
 Organizational structures are beginning to morph as digitization 
allows them to connect in looser platform structures, with disaggregated tasks and more 
fluid teams.
90
 
The ability to call in specialized help on an as-needed basis has a great deal of value for 
small businesses and startups in particular. Smaller enterprises may need specialized 
help at particular times—say, a marketing specialist to help during a product launch, an 
accountant during tax season, or a logo designer to establish a brand identity—but may 
be unable to afford having those people on staff full time. The availability of freelance 
labor has vastly reduced the cost and lowered the barriers to starting a business.
91
 With 
minimal capital, an entrepreneur with an idea can now create a small company by calling 
in specialized help on a project basis, particularly by turning to platforms such as Upwork, 
Freelancer.com, or HourlyNerd, where they can identify external experts quickly.
For companies both large and small, it can be cost-effective to hire independent workers. 
First, they are fully utilized; they work only when there is a need for their services. Second, 
digital platforms that aggregate a global pool of workers can lower the cost for particular 
tasks and make the going rate more transparent.
92
 
While there is often a clear business case for outsourcing some tasks to independent 
workers, it does not apply universally. The pros and cons of keeping any job in-house or 
turning it over to an independent worker have to be weighed carefully against the institutional 
knowledge, experience, and on-the-job learning that long-term employees may provide. 
(See below for more on this issue.) 
But corporate use of independent workers is not solely about outsourcing. In other cases, 
it unlocks new opportunities for growth, as it may free companies to invest in projects they 
would not undertake at all if they had to expand full-time staff. A company that wants to 
create a one-time marketing brochure may call in writers and designers to create it; the 
alternative in this case is likely not hiring a traditional in-house publishing team but simply not 
producing the piece. The availability of independent workers may encourage some entirely 
new economic activity.