Independent work: choice, necessity, and the gig economy

~162
M
size of independent 
workforce in the 
US and EU-15, 
counting both 
primary and 
supplemental 
earners
The Industrial Revolution moved much of the 
workforce from self-employment to structured payroll 
jobs. Now the digital revolution may be creating a 
shift in the opposite direction. 
1. SIZING THE INDEPENDENT 
WORKFORCE 

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20
McKinsey Global Institute
1. Sizing the independent workforce 
Some have been commonplace for many years, while others have grown out of new digital 
business models. 
Our definition of independent work hinges on autonomy and the short-term 
nature of the business relationship
We define “independent work” as the increasingly broad range of ways in which individuals 
earn income outside of the traditional long-term employer-employee relationship. Our 
definition focuses on the characteristics of the work itself rather than the legal arrangements 
surrounding it. The independent workforce includes the self-employed, independent 
contractors, freelancers, some small business owners, and many temporary workers, 
including those who get short-term assignments through staffing agencies.
13
 
Media coverage of the “gig economy” has created the perception that most independent 
workers are driving for Uber or performing household chores through TaskRabbit. But 
these activities are actually a small subset of independent work, which spans the full range 
of skill levels and income brackets. While independent work is prevalent in the construction 
trades, household and personal services, and transportation, it is also widespread 
within certain types of specialized knowledge-intensive occupations, such as lawyers, 
tax accountants, architects, interior designers, and writers. It is common for university 
professors to supplement their income by writing textbooks or consulting, activities that 
qualify as independent work. Many health-care professionals, including doctors, dentists, 
and therapists, are self-employed and would fit our definition. 
Because no single criterion can fully capture the nature of independent work, we focus on 
three defining features: 
 
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A high degree of autonomy.
 A key feature of independent work is that individuals can 
exercise control over their workload and work portfolio, giving them a greater degree 
of flexibility than traditional workers who must work within parameters set by their 
employers. Independent workers can decide which assignments to accept or reject for 
a variety of reasons (such as the fee being offered, the desirability of the client, or the 
timing of the task), and they can change those choices over time based on economic 
need, personal reasons, and other factors. While their clients or customers may set 
deadlines or have expectations about how quickly a particular task must be completed, 
independent workers can choose whether to accept that assignment or not. On the 
whole, independent workers have more flexible schedules and autonomy than traditional 
workers in determining when and how they choose to work.
 
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Payment by task, assignment, or sales.
 Rather than earning a fixed salary, 
independent workers are paid by the hour, day, contract, or task. An independent tax 
accountant gets paid based on hours spent or tax forms filed; a dentist is paid by the 
number of patients seen; and a freelance editor is paid by the hour or the assignment. 
Their income is therefore dependent on the amount of work performed. Unlike a salaried 
employee, they are not paid for time not spent working. Additionally, many self-employed 
workers find that their income is driven by their business revenue, which is a function 
of the goods they sell or the number of clients they attract. As a result, independent 
workers often have more variable income than workers with a fixed salary. However, we 
recognize that many traditional workers are paid hourly, by commission, or by piece rate, 
and many are given highly variable schedules, so this criterion alone is not sufficient to 
distinguish independent work. 
 
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Short-term relationship between the worker and the client.
 Independent earners 
tend to perform short-term assignments, such as giving someone a ride, designing a 
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  We exclude the traditional employees of temporary staffing agencies.

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McKinsey Global Institute
Independent work: Choice, necessity, and the gig economy
website, treating a patient, or working on a legal case. Both the worker and the customer 
acknowledge and accept the limited duration of the relationship, and independent 
workers will often work for multiple clients in succession or even simultaneously. Some 
independent work involves contracts that may extend for months or even years, at 
which point the nature of the working style becomes indistinguishable from that of a 
traditional employee. For the purposes of this research, we define “independent work” 
as assignments or contracts of less than 12 months. Some self-employed independent 
workers may have a long-term relationship with a client or customer (as with a doctor and 
a patient, or a housecleaner and a homeowner). But each time services are provided, it is 
a discrete event, and payment is received on those terms. Either party could choose not 
to reengage in the future without any ramifications. 
Combining these criteria helps to identify an independent worker as someone who chooses 
how much to work and when to work, who can move between jobs fluidly, and who has 
multiple employers or clients over the course of a year. In short, independent workers are 
ultimately their own bosses. Exhibit 1 lists a number of examples and shows which ones fit 
within our definition.
While independent earning always involves work, we also broaden our lens to include 
people who earn income by selling goods (either physically or via e-commerce) and those 
who rent out assets (for example, by listing a spare room on Airbnb). These activities involve 
an investment of time and labor, and they can provide a way to earn either a primary living 
or supplemental income. In reality, some of these activities can overlap: a worker may 
have to own assets such as a computer and software, a goods seller has to put in labor to 
make goods and to pack and ship them to customers, an Uber driver is offering both labor 
and the brief use of his car, and an Airbnb host may clean the rented unit after each guest 
leaves. But we make a distinction based on the core attribute that is subject to supply and 
demand matching. The designer’s time and effort, not the software, is what matters in 
the marketplace. 
It is also important to clarify the terminology we use for the two or three different parties 
that may be involved in independent work. We use the terms “independent worker” and 
“independent earner” interchangeably to denote individuals who provide services, sell 
goods, or rent assets. On the other side of the exchange is the buyer of the service or 
task. We call this party the “customer,” the “buyer,” the “consumer,” or the “client.” Finally, 
independent work is sometimes facilitated by a third party, such as a temporary staffing 
agency or a digital platform that coordinates the match. We call this party the “intermediary” 
or “digital platform,” applying similar criteria as those used by the US Department of 
Commerce.
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 However, intermediaries are not a necessary component of independent 
work, most of which still involves direct transactions. 
We exclude contractors or temporary workers who are not truly independent. Among the 
exclusions are so-called permatemps who have long-term contracts and are expected to 
work regular hours. We also exclude people who are regular employees of a company’s 
subcontractors (see Box 1, “Distinguishing independent work from fissured work”). 
14
  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.
Our definition of independent work hinges on 
autonomy and control; being paid by the assignment 
or sales; and its short-term nature.

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McKinsey Global Institute
1. Sizing the independent workforce