He said this new era is forcing employees, employers and the government to confront a new reality as solo workers become the norm.

“These individuals — whether crowd-sourced or providing tactical solutions or finding their first project on a marketplace or providing strategic advice to client — these are the pioneers of the next era,” Zaino said at GigaOM’s Net:Work conference.

He said contrary to popular belief, most of the current independent workers (55 percent) choose this route instead of being forced into temporary work. And he said 80 percent of these workers claim they don’t want to go back. And 28 million traditionally employed workers said they want to go independent in the next two years. That might be because 50 percent of traditional workers say they are unhappy with their work situations.

Many independents are not average workers at least in their own eyes. Seven out of ten say they are experts in their field and have advanced skills and education. Zain said companies are turning to these workers not as a low-cost solution but as hired guns who can come in and fix specific problems.

There are still a lot of challenges ahead as this new era takes shape. Employers need to find ways to dole out more work to these independents. And they need to rethink how they look at work, as more of discrete projects to be assigned. And employees need to get used to habit of scrapping for new jobs and dealing without health care and other safety net provisions. Zaino said the government also has to figure out how to deal with a shift in independent workers when it comes to tax income and how to categorize these employees.

There’s still a lot that needs to happen, but this will be the new norm as technology unshackles workers and gives them the opportunity to work from anywhere and be open to jobs from all kinds of employers.

“We’re pretty confident this is new way of work; this independent way of work is here to stay,” Zaino said.

Photo by Pinar Ozger.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Personal tools lead to practical business
• Millennials in the enterprise, part 1: strategies for supporting the new digital workforce
• A 2011 NewNet Forecast

Elance’s look back at the year reveals that online hiring has soared more than 100 percent from 2010, and the number of professionals working on the site is up more than 120 percent. Cumulative earnings this year should surpass $500 million.

And like his oDesk counterpart Gary Swart, Elance’s CEO Fabio Rosati (who is speaking at Net:Work Thursday) doesn’t feel the economic doldrums are the sole cause of the growing attraction of online labor platforms. What is? Structural change to work, Rosati told us in an interview:

The state of [the] economy and unemployment is acting as a catalyst. It’s forcing a large portion of the workforce to look for alternatives. It’s forcing business to remain more flexible. But what we’re seeing is a change in how work is done and it’s similar to commerce. What caused e-commerce? Did the rise of e-commerce result from problems in the economy? Not really.

E-commerce started to be more effective in some categories than regular commerce, and I think that’s exactly what’s happening in the world of work. Working online in many ways is more efficient, more effective and more immediate than traditional employment. Businesses that use the flexible work model have distinct advantages over businesses that don’t, and there are some departments within these companies that have always used a flexible work model anyway. Creative departments, marketing departments [and] IT departments have always approached talent in a very flexible way on a project basis. They’re just doing it online now. So I don’t think we’re going back. I think this is really structural.

And while some may feel this shift towards global, online labor platforms undermine American workers by opening them up to competition from lower wage workers abroad, Elance is predicting in its report that professional services will become “America’s next great export.”

“The global demand for US talent has increased steadily over the past year and is set to grow even faster as online platforms like Elance break down global barriers,” says the release that goes along with today’s numbers. But Rosati is a little more understanding of those who feel the rise of these platforms is a mixed blessing for American workers.

When you create a global workplace and a global workforce, the dynamics are very different. Suddenly, you have a lot more competition cross-border. I know that is a very strong reality, and at the same time, there’s the other side of it, which is that for the first time, a very capable, talented, U.S.-based professional can access work and have clients all over the world, and we’re seeing exactly that on the U.S. platform. I feel that it’s an important side of what’s happening, because Americans have amazing talents. We’re seeing companies that may be hiring in some parts of the world for certain types of tasks, but for others, they love the opportunity to hire people based in the U.S.

I don’t doubt there are strong pressures when you compete with someone who is living in another part of the world. For example, it doesn’t even have to be someone who is in a lower-wage country. It could be simply someone who has access to public health insurance. So if you’re working in the U.S., and you have to pay for your own health insurance, you may be at a disadvantage to someone living in Norway who absolutely doesn’t because it’s all covered by the government. So that dynamic is definitely real and a challenging aspect of what is happening, but there are also many positive things.

You have to hand it to Rosati for acknowledging that, for all the psychological and lifestyle benefits of independent work, it does offload tasks and expenses ( (like obtaining health insurance, dealing with tax issues and building retirement savings) entirely onto the worker. Also to Elance’s credit is their partnership with eHealth to help U.S. community members compare health coverage options. “I wish I had the magic wand to address the problem, but I don’t,” says Rosati.

But health insurance isn’t the only external cost shifted from employer to worker in the paradigm shift these platforms are pushing. Though Elance clearly tries to make verifying work, billing for it and sorting out logistics as simple as possible with everything from an internal file management system to built-in virtual meeting facility, one can’t help but feel independent workers are more burdened with what Craig Lambert recently dubbed “shadow work” in the New York Times.

Lambert defines the term as “all the unpaid labor — including, for example, housework — done in a wage-based economy,” and muses that all of us, not just independent contractors, are being saddled with more and more of it in the name of corporate profits:

Science fiction novels of a half-century ago dramatized conflicts between humans and robots, asking if people were controlling their technologies, or if the machines were actually in charge. A few decades later, with the digital revolution in juggernaut mode, the verdict is in. The robots have won. Although the automatons were supposedly going to free people by taking on life’s menial, repetitive tasks, frequently, technological innovation actually offloads such jobs onto human beings.

The conventional wisdom is that America has become a “service economy,” but actually, in many sectors, “service” is disappearing. There was a time when a gas station attendant would routinely fill your tank and even check your oil and clean your windshield and rear window without charge, then settle your bill. Today, all those jobs have been transferred to the customer.

From automated airport check-in terminals and the near extinction of travel agents to understaffed retail outlets where we find our size ourselves, more and more places are shifting work, with all its attendant costs in time and energy, from companies to individuals, argues Lambert. In its well-intentioned way, Elance and its competitors appear to be doing the same.

Do the larger markets for our services and increase in lifestyle flexibility make up for these extra costs?

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Defining work in the digital age: an analysis by GigaOM Pro
• Examining the rise of crowd labor platforms in 2012
• Report: High-Impact Collaboration in the Enterprise

Corporations fail at authenticity not just in the sense of connecting with consumers as genuine when it comes to their products (though some have suggested mega brands will struggle as Facebook and the like acculturate us to expect greater authenticity and apparently personal relationships from brands). Instead, the great authenticity challenge of corporate American is in relation to workers.

Author Daniel Pink took to Fast Company recently to discuss this issue in relation to his book, Free Agent Nation. In the post, he explains that one of the biggest and least discussed drawbacks of climbing the traditional corporate ladder is a need to hide your true self. He writes:

As free agents around the country told me their stories, they repeatedly used the language of disguise and concealment to describe their previous jobs. They spoke of putting on “masks” or “game faces” at work. They talked about donning “armor” and erecting “smoke screens,” because exposing themselves in a large organization could be perilous. Only when they returned home after work could they shed the costumes and protective gear and return to being who they truly were.

The double life endured by many workers employed at big firms can be stressful and draining, according to Pink, who quotes industrial psychologist Peter Krembs to illustrate the point: “’Optimizing’ the organization almost necessarily means ‘suboptimizing the individual.’”

One of the great benefits of independent work, Pink concludes, is being able to more closely align who you are with what you do. But this collapse of work self and real self isn’t without its struggles.

“In free agency, work becomes more fully integrated with who you are. That can be rewarding. But because work is more deeply woven into yourself, it can be harder to cast off–which means work can occasionally consume and even smother identity,” he writes.

In your experience, do corporate jobs require a greater sacrifice of authenticity than independent work? Is gaining authenticity by working independently worth the increase in stress?

At Net:Work, we’ll explore how independent contractors, particularly those who work remotely, often struggle with stress and workaholism. The event will be held in San Francisco on Dec. 8.

Image courtesy of Flickr user wolfgangfoto.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Personal tools lead to practical business
• Millennials in the enterprise, part 1: strategies for supporting the new digital workforce
• A 2011 NewNet Forecast

They’re out there, and their stories aren’t all the same tales of solo practitioners earning the ability to work in their bathrobes and take home a comfortable but not impressive income. When we talked to oDesk CEO Gary Swart earlier this month, he shared examples of members of his platform who had built businesses by growing their client base to the point where they couldn’t handle all the available work on their own. Joshua Warren, a Dallas-based web designer, Swart told WWD, is a perfect example of this new breed of independent contractor turned mini-mogul. He started on oDesk at $15 an hour, then:

[W]ithin months he stair steps his way from 15, to 30, to $85 an hour, and even at $85 an hour he has got more clients than he can handle and he’s making more money than he was at his traditional brick and mortar job in Dallas. What he figures out is he’s an entrepreneur. He stops turning away business; he creates his own firm. So in March of this year he created a company by the name of Creatuity, and he expects to do over a million dollars in business this year. And he now is hiring on oDesk.

This idea of the million-dollar freelancer might seem unlikely, but Warren isn’t the only one to manage it. IT pro Sanjay Dange, in Nagpur, India, used various online labor platforms like Freelancer.com and oDesk to build a million dollar company. He recently spoke to Entrepreneur Journeys about how he built up his business using these sites:

I wasn’t very sure about venturing into the overseas market… Our Indian operations were yielding an annual revenue of around INR 10 million ($204,332). However the profit margin was going down and competition was increasing due to new players coming in. That’s why we also thought of expanding our reach by entering into the overseas markets. At that time, Freelancer.com was GetAFreelancer.com. We thought of bidding on it for three to four hours a day….

We started getting small value orders in 2005. The first major order was from ZZPerformance.com, a Grand Prix components manufacturing company in the USA. The order was to deliver a complete e-commerce site. We took it at a very low price of $1,000. The project was quite big in terms of technical requirements and it took us five, six months to complete it. It gave us a major breakthrough. Since then, we have worked on hundreds of dynamic content management sites and e-commerce applications.

We started with a small office of 200 square feet and three people… Today, we have a total office space of 6,000 square feet in Surat and 2,000 square feet in Baroda. We have 100 people on our payroll. We are on Elance.com. We are on PeoplePerHour.com. We are on various contest sites such as LogoGuru.com, Hatchwise.com, 99designs.com and a few others.

Curious to learn more about Dange? Check out the lengthy interview for a lot more detail. Or read our interview with Shane Pearlman, who turned too much freelance work into a sort of thriving freelancers collective, no online labor platform required.

Do many of us have outmoded and overly limited visions of what independent work can be?

Image courtesy of TaxBrackets.org.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Opportunities Abound as the “Rules of Work” are Broken
• Examining the rise of crowd labor platforms in 2012
• Personal tools lead to practical business

Sure, working for yourself can be empowering and, by spreading the risk of losing a job across a range of clients, actually offers an increase in job security for some, but independent contractors can’t join traditional unions (though the Freelancers Union aims to provide some of the same services) or engage in group bargaining. Does this matter?

The AFL-CIO met last Thursday to discuss the question, hosting a forum entitled The Future of Work and New Ways to Build Power.  (For those looking for the really deep dive, a video of the 90-minute webcast is available here.) A quicker round-up of the discussion comes courtesy of labor relations blog In These Times, which reports:

“We all carry around the mental mood of the workplace, where we have an employer and a worker. And our laws respond to that. But that no longer corresponds to reality,” panelist David Weil of Boston University said Thursday at “The Future of Work and New Ways to Build Power,” held in Washington D.C.

More than 10 million U.S. workers are currently classified as independent contractors and not allowed to organize legally…. The only way organized labor may be able to fight for these workers is by engaging in nontraditional labor campaigns that do not seek traditional collective bargaining arrangements at their heart.

Some in the labor movement sees the New York taxi drivers’ 15-year effort to win pay increases and improve working conditions as an example of how the labor movement can fight for workers in industries traditionally difficult to organize.

“We need to follow lead of the taxi drivers alliance,” says Justin Molito, an organizer with Writers Guild of America East. “The decentralized nature of work is creating a new decentralized nature of resistance they will not be able to stop.”

Of course, labor union membership has been on the decline in the U.S. for years, with a tiny 6.9 percent of private sector workers belonging to a union in 2010. Connected work and the rise of the so-called “gig economy” clearly isn’t responsible for this decline.

But that doesn’t mean the decline of unions won’t affect how well the future of work provides for workers of the future. Already many commentators feel that the feeble state of unions has something to do with rising inequality and fewer Americans sharing in the fruits of economic growth. It remains to be seen if independent workers can use decentralized resistance, or some other means, to get a square deal from employers without collective bargaining.

Are you worried about workers being able to advocate for themselves and protect their rights in a future full of independent contractors?

Image courtesy of Flickr user Fibonacci Blue.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Millennials in the enterprise, part 1: strategies for supporting the new digital workforce
• How HR can make the case for workforce analytics
• Startup growth and the new recruiting ecosystem

I spend a lot of time on this site talking directly or indirectly about why I love freelancing, or what makes it so great, but in the interest of being fair and balanced, I want to take a break from my regularly scheduled gushing to point out some very serious pitfalls about working on your own. Many may seem like common sense, but it’s amazing how often it happens that people forget to consider these downsides when choosing to pursue this lifestyle.

Every Day Off Costs You Money

I remember paid vacation. I remember being irate at the fact that I’d only get two weeks out of the year, at best. And yet now, I’d love for someone to actually pay me money to take two weeks and not do any work. It seems like some kind of fantastical dream.

Now, when I want to take time off, I either have to do a lot of extra work before and after to make up for lost revenue, work while I’m away, or just write the time off as a loss. It’s not only a burden on finances, but it weighs on your mind, too, if you’re the conscientious type. As a result, letting go and truly relaxing can be harder when you’re responsible for every dime you take in.

Convincing People and Banks to Trust Your Money is Harder

Try getting a mortgage when you have to tell the bank that your income is wholly derived from contracts you have with various employers that range from temporary to semi-permanent, but all of which could potentially end without much warning. It’s not easy. Some institutions offer special considerations for freelancers, but for the most part, these deals come with strings attached.

Even negotiating with landlords in high-demand markets is a bit of a challenge. When the landlord or property management company holds all the cards, they choose tenants carefully, and getting an employment letter isn’t always possible for freelancers. Basically, be prepared for every one to second-guess your ability to generate income on a steady basis.

Taxation, Expenses and Insurance Are Completely DIY

If you’re not used to keeping track of your own finances and preparing for tax time completely on your own, it can be a huge surprise when the time does come. Most employers automatically deduct taxation from your wages, but with freelance work, you’re often paid the full amount with the expectation that you will pay taxes when they come due. That means it’s very rare to get a return on your taxes. Instead, you’ll usually end up owing a hefty sum.

Preparing for that is a simple matter of putting aside an amount in excess of what you estimate your taxes owed will be, but that’s easier said then done. Money on hand seems like it’s there to be spent, especially when unexpected costs arise. If you’re not careful, tax time could find you seriously lacking.

Add to that the fact that health insurance is pretty much up to you, and you can see how what seems like a sizable income can quickly become a subsistence wage. Factor in insurance, retirement savings, and tax when you’re calculating your overhead for freelancing before you embark upon a career as an independent.

Weigh the Good and the Bad

If you’re dissatisfied with your day job and thinking about leaving the rat race for freelancing, you may not want to hear about the downsides to making such a choice, but knowing just what you’re in for is key to making a sound decision you can live with. And if you have very good reasons for wanting to go it alone, chances are the cons won’t outweigh the pros anyway. They certainly don’t for me.

Have you considered the cons (as well as the pros) of taking on a freelance career?

Image by toolfan.hess from flickr

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Personal tools lead to practical business
• Millennials in the enterprise, part 1: strategies for supporting the new digital workforce
• A 2011 NewNet Forecast

Yes, of course, I’ll sign the NDA, I said. I’ll sign it because I want this person to feel comfortable discussing her project openly with all of us. I have no interest – and no capacity – to steal her idea. And I understand that you have to protect your assets.

This got me thinking more about NDAs in more depth. So I turned to a lawyer type to get some inside skinny on NDAs. Here’s my Q&A with Tate Stickles, Attorney at Law at Grossman Law Group in Miami.

WWD: What is an NDA – in layman’s terms?

Stickles: A contract between parties whereby they agree not to disclose the confidential information covered by the agreement.  The kinds of information covered typically include non-public confidential, proprietary information and trade secrets.

WWD: When a Web worker (developer, consultant, etc) is asked to sign an NDA, what things should they consider before signing?

Stickles: What kind of information is covered, and is it clearly set forth in the NDA? What kinds of confidentiality obligations are you looking at? When are you allowed to disclose the other party’s confidential information?  Typically there are exceptions for when you’re ordered to by court order or by law. How long is the confidentiality obligation? What happens to the confidential information at the end of the relationship?  Is it returned, or does the NDA lay out the approved methods of destruction? Are any non-compete provisions also thrown in?

WWD: When should a Web worker ask for someone else to sign an NDA?

Stickles: If they have any valuable information of their own that they want to protect.  For example, we commonly see developers that have their own set of development tools and trade secrets they’ve come up with over time that extremely valuable to them.  That developer would not be out of line asking another party to sign a NDA in order to protect their assets.

WWD: How enforceable is an NDA?

Stickles: Generally they are very enforceable.  Every contract is unique, but you should never sign a NDA assuming it’s not enforceable.

WWD: What is someone refuses to sign your NDA – what should you do/not do?

Stickles: The obvious answer is to not disclose any of your confidential information to them.  You’re also going to be looking at a business decision on whether you can continue the relationship without the other party having access to your confidential information.

WWD: How retroactive can an NDA be? That is, what if confidential info is revealed and THEN someone asks you to sign an NDA. Can that work?

Stickles: It’s not preferable, but it can work provided the NDA contains language that the term of the agreement and the confidentiality obligations start as of the date of first disclosure of the confidential information.

WWD: Is there or should there be an expiration date on an NDA?

Stickles: You can put a term on how long the agreement is binding, but the “expiration date” would actually be how long the other party is obligated to keep your information confidential.  Two to three years is the norm, but there are exceptions.  Trade secrets are another matter though, and if they are part of your confidential information you should ensure that the other party never discloses your trade secrets for so long as they remain a trade secret.

How often have you been asked to sign and NDA and do you always do it? If not, why not? And how often do you ask others to sign an NDA? Has anyone refused? If so, what did you do?

P.S. An interesting read on trade secrets litigations is The Trade Secrets Blog.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Personal tools lead to practical business
• Millennials in the enterprise, part 1: strategies for supporting the new digital workforce
• A 2011 NewNet Forecast

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• How to deliver the next-generation web experience
• The fourth quarter of 2012 in mobile
• How to manage the signaling storm in 2013

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• GigaOM Research highs and lows from CES 2013
• How HR can make the case for workforce analytics
• The 2013 task management tools market