Independent Contractors, Independent Consultants, Freelancers, Free agents: this day is for you.
Whether you are independent and free of traditional employment by choice, or one of the millions of reluctant independent contractors (people laid-off and out of a traditional job), you will get to see economic recovery before anyone else does.
The current recession will not end soon and that's where most of the attention is. Appropriately so. And yet, we are well on our way to a more flexible economy.
The Kaiser Family Foundation in their annual survey of Employer Health Benefits reported "Family Health Premiums Rise 3 Percent to $13,770 in 2010, but Workers’ Share Jumps 14 Percent".
We can see where the cost of health insurance is headed: you and I will soon be responsible for 100% of our health insurance costs, even if we are in a traditional employment relationship. If I were a traditional employee, that would be ok with me as a long term solution. It simplifies the employment relationship and puts employees more in control of their own benefits. But the transition is going to hurt, a lot. Wages are clearly not increasing. As the proportion of employee-paid health insurance premiums increases, it effectively squeezes-out personal income of traditional employees. There's no way any government stimulus can make up for that.
In the short term, traditional employees will have less discretionary income to spend. That in turn will squeeze retail businesses further. The news last week covered that point about the squeeze fairly well.
I didn't see any news or commentary about the long term implications of traditional employers' passing the cost of health insurance off to employees, which is what interests me the most. Do they get it? Do they understand where this leads?
While driving to my client's office for work, I was listening to news on the radio about the possibility of a worsening economy, as indicated by increasing unemployment numbers and further declines in home sales. This made me think about uncertainty and how I deal with it now. I realized, since becoming a Free Agent I have really changed the way I manage cash reserves and large expenses. I don't assume I have a perpetual income. As an employee, I did unfortunately slip into that way of thinking; that there would likely be an uninterrupted stream of direct deposits. Now, I tend to hold more cash.
My planning horizon is about 6 to 12 months, to anticipate the annual life insurance premium, annual purchase of airline tickets for vacation, any expensive car maintenance such as a set of tires. I delay discretionary purchases if I don't feel there's enough cash in the bank.
Check this article on executive pay at Hewlett-Packard. Whew! Those are some big numbers.
I'm fine with spectacular executive pay packages at public companies, if executives can get it legally. I just don't want to be an employee or investor there.
There may not be as many jobs these days, but the business of America still needs to get done. As independent professionals, independent consultants, contractors, Free Agents!... we don't need jobs, we need work and clients. Next time you are at your favorite trade and professional association meeting or anywhere else that brings you in contact with people thinking about business and talking about business, ask people... "How's business?"
An article in yesterday's New York Times describes in great detail how training has not paid off as some thought it would.
After Training, Still Scrambling for Employment
http://www.nytimes.com/2010/07/19/business/19training.html?_r=1
Saw this in the Orange County Register: 23% unemployed at least a year
The March (2010) issue of Money magazine* has an article called "Working without a net."
Those of you who are following us at Free Agent Source know we provide the net. But that's not the point I want to make. It's this one sentence from the article:
"As the unemployment rate soared last year, they felt they had more job security as freelancers able to get work from a variety of sources than if they were on staff, dependent on a single company or a single boss."
Exactly!
Back in September (2009) when FreeAgentSource.com went up, I posted this quote:
"If you're not somewhat embarrassed by your 1.0 product launch, then you've released too late."
Reid Hoffman
founder, LinkedIn
Fortune magazine, August 2009
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