250,000 Under the Radar – our Self-Employed Workforce

Late October’s headlines were dominated by the battle to threaten, then to retain, The Hobbit’s filmmaking in New Zealand. The whole episode was instructive at several levels, but for me the fascination was in Warner Bros’ abhorrence of organized labour. Warner Bros’ hardball bargaining extracted pragmatic and urgent legislation to ensure that their contractors cannot morph into employees partway through a film shoot. The hundreds of affected contractors, who have apparently earned little in recent no-film months, were mighty relieved.

Which got me thinking about the place of the self-employed in our economy, how Business engages their talents, and how the contracting parties share risk. Publicly available data are minimal, but from Statistics NZ, I did discover that in 2008, selfemployed made up 12% of the 2,140,000 total workforce. This translates to 1 for every 7 Permanent Employees. And from the Chamber of Commerce, that that ratio has almost certainly risen, due to the many laid-off skilled employees repositioning as contractors, consultants, commission sales, and fee earners of various kinds.

Responding to evolving labour laws, Business has for over 20 years favoured and facilitated this significant shift of the workforce into a contracting engagement. And while the definition of an independent contractor has become more technical and legally demanding, contractors now dominate many skilled and semi-skilled occupations. From rural contracting to software development, from van sales to copywriting, from business analysis to construction sub-trades to gardening franchisees – the self-employed are everywhere. And apparently they work longer hours and are happier than their employed brethren. Certainly contractors accept their engagement terms as requiring measurable value to be delivered to the client, while their tenure is generally limited to the completion of the job. This puts the contractor in the same risk space as their client.

This lengthy recession is the first to occur since this structural shift to widespread contracting and consultancy. Discretionary spending without a rapid payback is being sharply and widely curtailed. Inevitably, the thousands of self-employed professionals – in software, safety, marketing, communications, quality, design, strategy, analysis, surveys, human resources, architecture, business advisory, capital transactions and all – are doing it tough. This cloud has a silver lining for Business. Access to well-priced, motivated, timely and valuable professional support has never been better.

So, if you have a stack of projects to be undertaken, discrete packages of work to be done, improvement opportunities to be harvested or growth momentum to be resumed, you should consider contractors as impact players to advance the Strategic Health and Value of your Business.

However you tackle the improvement of your Business, just keep at it!