Navigating the Rise of Sudden Solopreneurs in an AI-Shifted Workforce – Solo Workforce – June 10, 2026

By Staff Reports - June 10th, 2026

A Conversation with Sara Wilkinson, President & CEO, SoloWorkforce; and Elizabeth Murphy, Vice President of Operations

The American workforce is undergoing one of the most significant structural shifts in a generation as the traditional employment social contract itself transforms. Layoffs and restructuring driven by artificial intelligence, automation and cost pressures are pushing workers out of full-time roles faster than many can reenter them. Meanwhile, the pathways back into stable employment are narrowing, especially in the middle of the labor market where administrative, operational and entry-level professional jobs once served as dependable anchors.

The result is a new population of “sudden solopreneurs”: highly skilled professionals who find themselves building businesses overnight, without a roadmap for navigating taxes, licensing, healthcare, insurance or compliance. In theory, the gig economy offers flexibility. In reality, it thrusts newly displaced workers into an administrative maze that most corporate employees never see.

In a recent vidcast conversation with BizTechReports, Sara Wilkinson, President and CEO of SoloWorkforce, and Elizabeth Murphy, Vice President of Operations, shed light on this shifting landscape. They discussed how employer-of-record (EOR) models — once designed to help large companies manage compliance for distributed teams — are now becoming the survival infrastructure for solopreneurs navigating an unpredictable, AI-influenced labor market.

Here is what they had to say:

BTR: We’re seeing major changes across the employment landscape. From your vantage point, what’s driving this surge in solopreneurship?

Wilkinson: What we’re seeing is that many people aren’t choosing independence because it’s trendy or aspirational. A significant portion are doing it because they’ve been pushed out of traditional roles. Their jobs were automated, reorganized, consolidated — whatever the reason, they suddenly find themselves without a full-time position and with very few traditional roles available to re-enter.

They still need to earn a living. They still need healthcare. They still need to comply with tax laws and contractual requirements. And they are doing all of this at a time when the complexity of self-employment has never been higher.

Murphy: It's important to emphasize the timing. Displacement doesn’t come with a planning period. It’s not like people say, “I’m going to spend six months preparing for independent work.” The shift happens overnight, and they wake up the next morning with a whole new set of responsibilities they didn’t anticipate — especially administrative responsibilities.

We hear the same sentiment over and over from new solopreneurs: “I didn’t know what I didn’t know.”

BTR: How much of this transition is tied to AI and automation?

Wilkinson: AI isn’t replacing all work, but it is fundamentally reshaping certain categories of jobs — especially entry-level functions and predictable administrative roles. Those functions have historically been the on-ramp into corporate life. When those roles are eliminated or consolidated, the workforce loses an entire layer of stability that people used to depend on.

We’re watching AI shift the ground under people’s feet. Some companies are overcorrecting, downsizing roles because they assume automation will fill the gaps. Then they realize they still need certain human skill sets and bring people back — but often under contract, not as full-time employees.

Murphy: That creates what Sara calls “elasticity.” Companies contract, then expand, then contract again — but not in traditional ways. They bring people back as contractors because they still need the skills, but they don’t want the long-term financial obligations of full-time roles, or they don’t have the budget for benefits or overhead.

This is creating an environment where solopreneurship isn’t a choice — it’s a default outcome of restructuring.

BTR: For workers who unexpectedly become solopreneurs, what tends to be the biggest surprise or shock?

Murphy: Healthcare. Without question. Losing employer-sponsored health insurance is one of the most destabilizing aspects of sudden self-employment. People immediately find themselves trying to navigate ACA marketplace plans, COBRA premiums or individual-policy options — often at much higher costs.

Wilkinson: Then comes the business formation side: Do I need an LLC? Should I be an S-Corp? When do I need a business license? What qualifies as tax-deductible expenses? How do quarterly estimated taxes work?

People don’t realize how much administrative infrastructure their employer was carrying for them until it’s gone.

BTR: This is where employer-of-record services come in. For those unfamiliar, what does an EOR actually do?

Wilkinson: At its core, an employer-of-record is a third-party organization that becomes the legal employer for someone who is performing work for a client. It creates a framework that allows individuals to remain fully independent — choosing their projects, setting their rates, managing their client relationships — while the EOR handles the legal employment infrastructure that would normally be provided by a traditional company.

What that means in practice is that the EOR manages the worker’s payroll as a W-2 employee and takes responsibility for tax withholding and reporting. It handles multi-state compliance issues when someone works with clients across different jurisdictions, and provides access to benefits like healthcare and retirement plans. It also supplies the protections associated with formal employment, including workers’ compensation and unemployment insurance, and manages the administrative requirements around contracts, onboarding, and verification processes that corporate clients increasingly expect.

In other words, the EOR gives solopreneurs the administrative backbone of a company — the legal, financial and compliance infrastructure — without taking away any of the independence or flexibility that drew them to solo work in the first place.

Murphy: And it’s important to add that this model isn’t new. Corporations have used EORs for decades to legally engage workers in states or countries where they don’t have entities. What’s has been less understood is that individuals — not companies — can leverage these capabilities to support their own services and interests.

People are saying, “I want to be independent, but I need the protections and stability of being a W-2 employee.” 

EOR solves that.

BTR: What about business credibility? How does EOR status affect client relationships?

Murphy: Clients — especially enterprise clients — want assurance that the people they hire are covered. They want to know the contractor has liability insurance, workers’ compensation, a business structure, and compliance support. When you’re on your own, that’s a lot to manage. When you’re with an EOR, those boxes are already checked.\

Wilkinson: We’ve seen situations where clients hesitate to work with a brand-new independent consultant because they’re not sure about the consultant's ability to handle the administrative side of things. An EOR essentially puts a recognized corporate framework behind that person. For some solopreneurs, that’s the difference between landing a contract or not.

BTR: Healthcare seems to be one of the most urgent stressors. How does the EOR model change this?

Murphy: A lot of new solopreneurs try to navigate the ACA marketplace on their own. Some find workable plans; others face limited options due to geography, income thresholds, or family needs. COBRA is often prohibitively expensive. Association plans can be hit or miss.

The EOR model provides access to group coverage with more predictable pricing. People underestimate how comforting that is when they’ve just lost their job and are worried about providing for themselves and their dependents.

Wilkinson: You can have two clients one month and four the next, but your health insurance stays the same. That makes a huge emotional difference.

BTR: Beyond healthcare benefits, what other challenges are sudden solopreneurs facing?

Wilkinson: Taxes are a big one. Independent contractors must handle quarterly estimated payments, 1099 income documentation, and track business expenses in a compliant way. This is completely foreign to many people coming out of corporate environments.

Murphy: Multi-state compliance is another. If your client is in a different state — or if you move — you may need to register your business in multiple jurisdictions. Most people never even consider this. They assume freelancing is simple until they encounter state-level tax regulations.

Wilkinson: And then there’s contract vetting. Some contracts ask for terms that don’t make sense for an individual. Without guidance, the solopreneur either signs something risky or walks away from work.

An EOR acts as the administrative buffer so workers can focus on doing the job they’re actually hired to do.

BTR: You mentioned earlier that some solopreneurs eventually return to their former employers — but not as employees. What’s driving that pattern?

Wilkinson: This is the elasticity effect. Companies let someone go because they think automation or restructuring will fill the gap. Weeks or months later, they realize they still need the person’s expertise — but they don’t have the budget or justification to bring them back in a full-time role.

So they engage them as a contractor under a different budget category.

Murphy: It’s a win-win in many cases. The worker gets continuity with a familiar client, and the company gets the expertise without expanding headcount. But it only works smoothly when the solopreneur has an administrative structure behind them — and that’s where EOR becomes essential.

BTR: Let’s talk about financial resilience. How does EOR help solopreneurs regain stability after a layoff?

Murphy: One of the hardest realities solopreneurs face is proving income stability. Even if you’re earning consistently, lenders and landlords want W-2 documentation. They want to see predictable payroll, not a mix of 1099s.

Wilkinson: We had a consultant who made good money as a 1099 worker but was denied a mortgage because they didn’t have two years of independent returns. They came to us, we onboarded them as a W-2 employee through our structure, and their first paycheck — literally the first one — allowed them to qualify.

It was all about about documentation.

Murphy: This is where the EOR bridge becomes powerful. You can have diversified income streams, multiple clients, the flexibility of independent work — and still maintain the W-2 identity that lenders, insurers and other institutions rely on.

BTR: It sounds like solopreneurs are looking for a hybrid model — flexibility plus stability. Is that what you’re seeing?

Wilkinson: Absolutely. People want to choose their work, choose their clients, manage their schedules — but they also want healthcare, tax support, compliance coverage and continuity. They don’t want to feel like they’re one decision away from losing everything.

Murphy: It’s flexibility without chaos. Independence without vulnerability. That’s what today’s solopreneurs are searching for, and that’s what the EOR model provides.

BTR: Based on everything you’re seeing, what does the future of work look like in the next three to five years?

Wilkinson: I think the boundary between “employee” and “independent” will continue to blur. Companies will keep restructuring, technologies will keep advancing, and more workers will move in and out of independence throughout their careers.

The winners will be the workers who have support structures — financial, administrative, and emotional — that allow them to adapt quickly.

Murphy: And the employers who adapt will be the ones who embrace flexible talent models while maintaining compliance. The old system is not coming back. What’s emerging is a blend of autonomy and support — and solopreneurs will need both.

BizTechReports Conclusion

The rise of sudden solopreneurs marks a significant shift in how work is structured, valued and supported. As AI reshapes the labor market, the traditional safety nets of corporate employment are no longer guaranteed. Yet independence does not have to mean instability. EOR models offer a modern infrastructure for workers navigating uncertain transitions, allowing them to preserve flexibility while regaining the protections, continuity and credibility once tied exclusively to full-time employment.

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