Independent work: choice, necessity, and the gig economy

Box 1. Distinguishing independent work from fissured work
In recent decades, many large corporations have undergone a fundamental structural 
change. They have split off non-core functions that were once managed internally, turning 
over these functions—and the jobs associated with them—to vendors and subcontractors. 
This has altered the nature of the employment arrangement for the workers involved.
1
 But 
so-called “fissuring” does not fit our definition of independent work because the individual 
workers do not have autonomy, flexibility, and control over their schedules. 
Franchising, for example, enables parent companies to create and control a business model 
that others replicate, thus spreading a brand without assuming the full burden of goods 
delivery or cost control. An individual may buy a janitorial franchise from Coverall, which 
brings in clients and sets prices and boundaries but leaves expenses and payroll to each 
franchise owner. The franchise owner is likely self-employed but may lack control over the 
time he works due to guidelines set by the parent organization. Any employees may have 
traditional jobs, although their employer is the local franchise rather than Coverall. 
Subcontracting firms are the prime examples of fissuring. Companies often contract 
out functions such as customer service, technical support, or travel booking to external 
providers. Hotel maids, for example, typically work for property management companies 
rather than individual hotels, although the various guidelines they follow are set by 
those hotels. 
Fissuring is one dimension of the larger trend of companies becoming leaner and hiring 
externally for certain roles so they can focus on what they do best. But this particular 
practice has come under fire, since many larger companies outsource to small enterprises 
that compete fiercely on price. Doing so can increase their margins and remove 
liabilities—but many fissured workers receive lower pay and fewer benefits than what 
the purchasing organization offers its staff employees. Because most of these workers 
are traditional employees of subcontracting companies, they do not fit in our definition of 
independent work.
1
  For a deeper discussion of this issue, see David Weil, 
The fissured workplace: Why work became so bad for 
so many and what can be done to improve it
, Harvard University Press, 2014.

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24
McKinsey Global Institute
1. Sizing the independent workforce 
 
Starting with Adam Smith’s famous example of a pin factory, the efficient, mechanized 
production that emerged during the Industrial Revolution depended on standardizing not 
only machinery and processes, but also the way labor was deployed. Long hours and 
six- or seven-day workweeks were commonplace as most factory owners sought to keep 
assembly lines humming and maximize output. The fight for a more humane eight-hour 
workday became the defining cause of the labor movement in the late nineteenth and early 
twentieth centuries. Unions engaged in a protracted and sometimes bloody struggle to 
shorten working hours in both the United States and Europe.
16
 
A turning point in that fight in the United States came courtesy of Henry Ford. In 1926, the 
Ford Motor Company adopted a regular five-day, 40-hour-a-week schedule for its factory 
workers, reducing their six-day-a-week schedule and the length of their shifts. Ford himself 
was quoted as saying, “It is high time to rid ourselves of the notion that leisure for workmen 
is either lost time or a class privilege.” But he was also following a business instinct: Ford 
guessed correctly that well-rested factory workers would be more productive, and their 
newfound leisure time would boost consumption across the economy. The company later 
extended this policy to its office workers, setting a precedent that would catch on for white-
collar work across the United States.
17
 
A decade later, the 40-hour workweek was enshrined in US law with the 1938 signing of 
the Fair Labor Standards Act, one of the central legislative planks of the New Deal. The law 
16
  See, for example, James Green, 
Death in the Haymarket: A story of Chicago, the first labor movement, and 
the bombing that divided Gilded Age America
, Pantheon, 2006.
17
  See Douglas Brinkley, 
Wheels for the world: Henry Ford, his company, and a century of progress, 1903–2003
, 
Viking, 2003, and Jean-Yves Boulin et al., eds., 
Decent working time: New trends, new issues
, International 
Labour Organisation, 2006.