As most who read these blogs know, I’m very interested in how the working world is changing. We have seen the big picture of this change for some time – it has called for individuals to take more responsibility for their employment and their on-going education so their skills and knowledge remain valuable to employers.
What has been a recent ah-hah for me has been the recognition that traditional employment may be on a major decline for most mid-skill and many high skill individuals leading to an employment scene where most workers are on limited term or part-time jobs in the future vs. the traditional full-time employment of the last era.
Now, I’ve been interested in freelancing and contract work because of its numbers growing steadily and it is a major change for people who have only been traditional employees. But I really hadn’t thought about it becoming the norm. Here is my thinking:
- The American workplace is not creating enough good jobs for mid-skilled individuals. Witness the estimated 75,000 jobs created in the most recent jobs report. Furthermore, Laura D-Andrea Tyson (Haas School of Business, Berkeley) wrote last September “60 percent of the net job losses (during the Great Recession) occurred in middle-income occupations … In contrast, these occupations have accounted for less than a quarter of the net job gains in the recovery.” (Economix blog of NY Times, 9/20/13) This she reports is typical of post recession job creation, what is not typical and creating the pain is that better jobs have not followed as the recession receded. Autor and colleagues point out this is a longer trend than just since 2008. (see http://economics.mit.edu/files/5554 for a paper on it) What is happening is a major restructuring of employment and the societal changes that will go with that (see Tyler Cowen’s recent book Average is Over for one of the latest people to come to that conclusion.).
- Downsizing has long been an accepted management strategy (in the 80s for manufacturing and since the 90s for everyone else) and there is no reason why that practice should suddenly fall out of favor. What this does is continue to cycle workers through unemployment allowing their wages to fall or their employment status to change when they re-enter the workforce.
- Contract workers and freelancers have been integrated into the organizational workforces where there are relatively large numbers of traditional employees fairly easily. Many researchers who looked at the change from the perspective of the old way of doing business have identified “problems” they expected from this combination of employment types such as contract workers feeling isolated and/or full-timers not being willing to take direction from contractors because of their lack of internal status. This might have slowed the move to contract workers but there is very little evidence that any of these potential negative repercussions being significant.
- Contract workers have identified that one of the big pluses for them is the ability to “tell it like it is” in relation to work they are doing because of the relatively light concern they feel for “organizational politics.” This actually works to the employers’ advantage because it makes for higher quality decisions and products. This along with the flexibility it provides employers both in overhead and getting new skills in the door quickly make contract workers more of a sale than in the past.
This is not horrible news. Workers have not had the comfort of job security for a long time and this will just make that lack of comfort more transparent. How will things change? Individual workers will:
- Get a better view of what their knowledge and skills are worth to employers. They will also have a better view of the working world and how they contribute or could contribute to profit. This broader perspective should lead more to make better career development decisions.
- The Affordable Care Act will eventually lead to more health care security for individuals of prime working age.
- There will be an opportunity for Financial Planners who can help with retirement savings and better investment decision-making. Something that has been missing in our system since defined benefit pensions went into serious decline in the United States.
- All workers will have a better sense of what kinds of services the government provides individual workers. Now much of that is not a big part of the traditional employees’ consciousness because the deductions are automatically taken out of their pay checks by their employers. This could lead to a reworking of the whole worker security net.
- What individuals do during their careers will be more able to evolve with their personal interests because they will not have long-term organizational commitments that overwhelm their personal interest. There will also be an opportunity for more coaches and “personal educators” who help individuals make their career shifts.
If average is over as Tom Friedman and now Tyler Cowen have said repeatedly, individual workers need to recognize this and give it more than lip service. As a culture the U.S. has traditionally been very enterprising. It is time for the majority to re-inhabit that reality.