2020 has been the year of change for many people.  We are doing so much more online, businesses that used to be struggling have found some new avenues to succeed and others that were strong are struggling.  The unemployment rate is up across the globe.  As with most storms, if you look closely at the economic landscape there are silver linings out there to be found. 

I propose that one such silver lining for workers and businesses alike is the idea of fractional work.  What is fractional work?  I will come back to that in a minute.  First let us talk about the employee mindset.  For years I personally passed up the opportunity to be my own boss, aka business owner.  The main reason continued to work for others was the idea that the salary and benefits were the safer option.  So, the classic trade between owner and employee is higher earning potential vs. “guaranteed” income.

What did 2020 teach me?  The safety of the employee income was simply a veneer and was never truly the insurance policy I had believed it was.  As the owner of ProjectHelpYouGrow.com I have seen thousands of people sign up and look for help since COVID-19 has decimated the economy.  Most of the people who I have spoken with that were laid off had no desire to switch jobs, nor did they think they were in danger of losing their job entering the year.

A New Way to Look at Working

If your job and the income it generates is not truly safe, don’t we truly need to adjust our safety vs. higher income potential equation?  Yes, we do.  Some people have never thought business ownership was ever a realistic financial option for them.  Perhaps because they are not wealthy or feel like they do not have the classic business skills to run a company.  What people need to understand is that there is not a huge difference from owning your own business and being an employee.  Truly most employees are like business owners, with only one customer, their employer.  The one client calls the shots as to when they work, how they work, what they get paid, when they can take a vacation and more. 

Fractional work offers another option to both employers and workers.  Fractional employees are independent contractors (aka business owners) who work part time for multiple companies.  Akin to a part time job, fractional work has advantages for both employers and employees.  The employer can bring in specific skillsets or specialists on a contract basis from an on-call basis to an agreed upon hourly or project basis.  The contract can be set up millions of different ways but almost always exclude full time work and the benefits that are included with hiring a full-time employee.  Most businesses understand this value, so arguing the merits is not needed.

Employees on the other hand are typically scared out of their minds when they hear about this type of “employment” business ownership option.  I understand.  Many workers both blue and white collar are not mentally prepared to accept the risk of business ownership, however I believe many could benefit in the short term and the long term from changing their mindset.

Changing the Mindset

How many are unemployed now, because they only consider full time or traditional roles with benefits?  I have talked to job seekers who do not even look at contract or part time roles.  If you’ve been searching for work for months or even longer and not been successful, I would implore you to consider a few things in adjusting your strategy including what roles you are open to.  Contract, part time or fractional work could be the answer to your immediate and long-term goals.

Fractional work first entered my conscious mind in the form of “bridge jobs.”  These are found commonly in our society today as side hustles or even MLM opportunities where people are looking to make some “extra” income but don’t consider themselves to be true business owners.  Many MLM and side hustle workers are in fact small business owners and the mindset needs to expand.  Once you allow yourself the freedom of seeing yourself as a business owner, the possibilities of how you earn a living will expand and with it your overall earning potential will increase along with it.

Benefits of Fractional Work

Earning potential, reduced commute, total hours of work, off time, creative liberty, pursuit of passions and customizable scheduling just some potential advantages of fractional work for the new business owner.  You can earn a higher hourly wage, but also you can string together more work and increase annual income.  If you work from home, you can eliminate your commute or adjusting your schedule to more commute friendly times.  If you’re like me, you’ve missed countless kids’ activities in your children’s school because they were during work hours.  Fractional work can afford you the opportunity to attend those events in the future.   

Are there downsides to fractional work.  Sure there can be.  As a business owner you have to sell or find someone to sell your services.  You’re not guaranteed an annual salary by one employer, so you have to produce and make sure the clients stay happy.  Benefits are not provided for you so you have to buy those for yourself and of course you have to pay your own taxes, instead of having them withheld from your paycheck.  The negatives can seem daunting, until you realize you can pay other people/businesses to help you with all of it. 

Fractional work can be far more stable than a traditional job.  Remember employees might feel they are secure, but most of us work in “right to work” states under “at will” employment contracts.  We can be terminated for just about anything and/or laid off with the blink of an eye.  This happened to me.  I thought my six figure income was safe because I was a “rock star” according to my boss in a conversation just eight weeks before I was let go.  Your salary security is not real. 

The Sum of the Parts is Worth More than the Whole

Fractional workers can secure more safety by having multiple streams of income.  The more you add, the more risk adverse you become.  Have 4 clients each paying you 25% of your overall income and lose one job, you’re only out 25% of your total revenue.  That’s not nearly as devastating, especially when you consider fractional work typically pays more by the hour, so you could be making the same on the three jobs working 75% of the time with no commute, then you were working one full time job with an hour commute in a traditional role.

Is fractional work going to become the new normal?  I believe it will become more and more common.  There are simply too many benefits for businesses and new contractor (business owners!) converts (former employees) to ignore.  Prepare for the paradigm shift in the labor force.  I believe it’s at the door step and about to become the new normal.

Looking to hire fractional workers? Consider hiring Panna Knows to help you! Want help figuring out if fractional workers are a strategy you should consider as part of your overall workforce? Consider hiring us at Exit Your Way to help via our consultant offerings.