The profound social, economic and especially technological changes that we are currently experiencing are disrupting many ways of thinking, living and doing things. Take the wage system, for example, one of the solid foundations on which the working world leaned just a few decades ago, and which is slowly but surely crumbling, giving way little by little to an increasingly present reality, independent work.
To be sure, independent work is not new, but its scope has historically suffered from a lack of precision. As a phenomenon in high growth, independent work is much better circumscribed today. As the McKinsey Global Institute says in a report[1] published on the subject, independent work can now be defined as an activity characterized by a high degree of control and autonomy, by the establishment of short-term relationships between the independent worker and his clients, and lastly by payment by the action or task.
According to the same report, independent workers in the United States and the fifteen original European member states now comprise between 20% and 30% of the active population of these two groups, around 162 million people. The Intuit firm thinks no less, and states in a recent report[2] that independent workers could comprise up to 45% of Canada’s workforce by the end of the current decade. But take care, the portrait of the independent worker is far from being black and white! The McKinsey Global Institute reports that while more than two-thirds (69.8%) of some 162 million workers are estimated to have opted for this professional lifestyle by preference, independent work is nonetheless only a supplementary income from more than half of them.
Whether by choice or by necessity, the wheel is turning and it is clear that the phenomenon of independent worker is expected to grow more in the coming years and decades. And for the accounting profession, this is just good news! Because although independent work involves a good dose of independence and autonomy, it also involves a certain isolation, sometimes coupled with a lack of knowledge of basic accounting concepts and tools, essential instruments for the good financial health of the independent worker. It is clear that not all independent workers are well versed in bookkeeping or tax optimization! The report from the Intuit firm mentioned above indicates that two independent workers out of three acknowledge the fact that a better understanding of the financial basics related to their professional activity would be useful!
A multiplicity of engagements, fragmentation of tasks, management of income, collection of taxes, payment of income taxes: independent workers face many challenges and there are many opportunities for accountants to make use of their expertise for these workers of the new millennium.
[1] McKinsey Global Institute. Independent Work: Choice, Necessity, and the Gig Economy. October 2016.
[2] Intuit Quickbooks. The Rise of the Self-Employed Economy in Canada. January 2017.