working at home - consultingIn today's stuttering economic recovery, the job market remains at center stage -- from President Obama's urgent meeting with his Jobs Council to spur private sector hiring to a slew of cover stories on career reinvention. But while the traditional hiring remains tepid, there is a sector whose strength isn't necessarily fully counted by the Bureau of Labor Statistics, that does seem to be experiencing real growth: Independent consulting. At this point, going it alone may not just be a good move, it could be your only move.

Once you make the switch, you may find yourself smiling: There are indications this growing segment of the workforce may also be the happiest. According to the Gallup Healthways Well Being study showed the highest happiness rates among self-employed people and business owners. The self-employment trend is booming with boomers. A Charles Schwab survey finds as many as 9.5 million Americans are considering coming out of retirement and going back to work in some capacity, and AARP reports 79% of baby boomers say they don't plan to stop working at age 65.

When it comes together, self-employment, home-based freelancing or "e-lancing" give people control over both their incomes and their lives. Still, while that can be a recipe for happiness, it's not a cakewalk.

Many professionals making the switch from employee to independent struggle with replacing the safety net their employers once provided, particularly as regards health insurance and retirement plans. They also often don't know how to address issues like taxes, business liability insurance and contract management.

Handling the Bookkeeping

One company, MBO Partners, has built a business helping independent workers put the pieces together, and it's seeing record growth -- more than 40% year over year. By working through MBO, contract employees also get a single W2 even if they are working for multiple companies, which means they are paying taxes and being tallied in the latest job numbers. That's significant from a compliance perspective. MBO's fees are transaction-based in the neighborhood of 3% to 6% vs fees of more than 20% to 30% for staffing companies that find you work.

The company thinks of itself as playing the role of "business manager," providing a resource for talented consultants who don't want to be bothered -- or don't know how to deal -- with things like bookkeeping. And, by pooling thousands of consultants, they're also able to secure bulk discounts on things like insurance.

We spoke with Gene Zaino, the company's president and CEO, who admits working independently it's not always the first choice of individuals or the entities employing them, "It's not optional for a lot of people. Companies are being forced to be more agile, buying work in little pieces and making smaller commitments." He thinks the shift is fundamental, calling it "the new normal." But, he notes, "once people try working as an independent consultant, 80% don't want to go back to their old way of working."

Case in point: Retired Lt. Gen. Jan Huly became an independent consultant after a 37-year career in the Marine Corps. "I wasn't sure what I wanted to do post-retirement," he says, "but I knew I wanted to enjoy myself, have more freedom, and yet still make a positive contribution with my skills." Huly has found "unsurpassed freedom" in his new career, part of a growing population of retirees leaving the traditional workforce and beginning second careers in which they control when, where and how they work. As independent consultants, these new retirees can even combine work and travel, taking assignments in other cities or countries. It's a nice second act -- if you can pull it off.

Independence Days

MBO will soon begin a "State of Independence in America" study characterizing the independent workforce. Here are some initial trends they have found in self-employment:

Women are going solo: The growth rate of women's enrollment as independent consultants on MBO Partners is approaching double the men's rate, rising 250% from 2008 to 2010. Zaino says the company is approaching a 50/50 gender balance.

Growth spans the generation gap: Enrollment rates show growth across all generations in the past year with Millennials in the top spot (more than 110 percent growth), followed by Gen X (64 percent growth) and Baby Boomers (26 percent growth).

The nation's capital leads the nation: While the traditional labor market in Washington, D.C., is stagnant, with unemployment rates on the rise, independent work is skyrocketing. The D.C. metro area is MBO's largest and fastest growing region, thanks to employees making the shift to independent consulting. Government work tends to be project-specific and federal retirees often consult.

Big in the Big Apple: New York City is another hot spot for independent work. Enrollment growth rates in the metro are topped 270% from 2008 to 2010.

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June 30 2011 at 12:53 AM Report abuse rate up rate down Reply

There is no job security and I know many sub-contractors that have taken major hit in the construction stand still in Florida and many other states. With the economy expected to get worse, my family has cut back in all areas but still continued to struggle. I am so thankful because someone shared with me an opportunity to eliminate my family’s grocery and gas expense. If this would help you check it out:

June 28 2011 at 3:24 PM Report abuse rate up rate down Reply

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June 23 2011 at 4:04 PM Report abuse rate up rate down Reply
Felipe Adams

The unemployment problem will stop when the government put a cap on the outsourcing of jobs to other countries. The unemployment problem would be over if 50 percent of the manufacturing plants return to the U.S. There are some interesting reports about job outsourcing at

June 23 2011 at 8:40 AM Report abuse rate up rate down Reply

If you're busisness card says, "Consultant," It means just one thing. You've been out of work so long you'll grab anything and hope you can fake it for at least a full pay period, while trying to figure out the least painful, most disabling injury you can come up with in less than 10 working days. That's how top consultants do it. As for the amazing Ms Lewis, she favors us with the following gem.

June 23 2011 at 1:15 AM Report abuse rate up rate down Reply

This is what the corporations rather do anyway, you 1099 the person(s) and your done. No other loss of money in benefits allowing the CEO to get a bigger bonus at the end of the year for saving the company money. It is all about the company now days. We have gone to cold harded business country, no repect to the American worker. This now puts more American's in the uninsured colunm, they won't make enough to pay their taxes (now on their own) and bills. Be carefull these dog eat dog corporations will now under pay independent contractors because they will be competing against other independent contractors for the same work.

June 22 2011 at 1:41 PM Report abuse rate up rate down Reply

without using "contract" employees how in the world does one expect that the CEOs, who are trying to hire more and more people even with just the small Bush tax breaks, can keep thinking about hiring faster than they are trying to do..
..until we cut the corporate taxes and taxes of those of us who make over $500,000, our hands are tied as far as hiring people . and that minimum wage needs eliminated immediately so we can really hire and train a lot of family men and women in their 30's-50's . we can't affort to hire them at these outragous hourly wages, easily as much as 300-600% higher than in other countries like Uganda, Bolivia, Mirimar, pakestan etc. we need lower taxes for us and lower wages and benefits for our (potential) employees..

June 22 2011 at 1:36 PM Report abuse rate up rate down Reply

Contracting employees is means you aren't really hired, you don't have any benefits and you will owe MORE TAX money on your wages (because the "employer" doesn't have to report/pay them). This is a lose/lose for the American employee. Self-employment is good for a small percentage of people but its tough -- tough to get business and even tougher to get paid. Corporations used to take care of their employees and their stockholders, now they just take care of the CEOs (at everyone's else expense).

June 22 2011 at 12:48 PM Report abuse rate up rate down Reply
1 reply to ccm989's comment

Oh they still take care of their stockholders it the everyday worker that will suffer. Cut, Cut, Cut the big business has bought the goverment and convinced the greedy American public that the problem is high taxes even though they aren't paying much themselves. A govermnet without revenue will not be able to govern and protect it's people from corporate greed and defunding the goverment is a way to get it done. We can't put the whole blame on corporate America we must put most of the blame on us for being stupid and listening to the GOP'S cry of too high of taxation. No such thing, they took the surplus the goverment had and gave us peanuts as people but gave the corporations and the richest 2% billions in tax credit exemptions and the American people put these idiot in office last year.

June 22 2011 at 1:47 PM Report abuse rate up rate down Reply

the best reason-cash no receipt. Off the books contractors and illegal workers are costing us billions in unpaid taxes. Even touy housekeeper is "off the books" cash only,and the guy who cuts your lawn?

June 22 2011 at 10:55 AM Report abuse rate up rate down Reply
Oil Trader

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June 22 2011 at 10:30 AM Report abuse -1 rate up rate down Reply