Is the Gig Economy the Start of a New Industrial Revolution?

Maybe. Yes. Some would argue that the gig economy is a natural outcome to the work world of today. But perhaps the gig economy is the beginning of a new industrial revolution that will completely change the dynamic of work for the future, empowering America’s workforce.

What is the gig economy? Really this is a fancy phrase for independent contractors. Think individuals with specialized knowledge, skills and abilities, or “artisans” that engage with companies on a contractual basis for a short-term arrangement. In return, the company pays a pre-negotiated rate for a specific outcome. What makes the concept new-ish, is that companies connect with gig workers via the digital marketplace (i.e. websites or mobile apps). Indeed, a study by Intuit predicts that by 2020, upwards of 40% of the workforce will be independent contractors.

Th origins of the first Industrial Revolution were a combination of innovation (steam power), social change (end of feudalism, population shift from rural to urban centers), market (demand for mass production) changes and good ol’ fashion work ethic. These same forces are also contributing to the latest version of the industrial revolution.

Advances and innovation in tech and about every other industry there is have changed the talent needs of companies. Employers no longer seek brawn, they need brain. Knowledge workers are in demand. Employers do not have the time nor the tools and resources to train for these needs, thus they have to seek it out in an already pre-packaged human being who brings with them the knowledge and tools to complete the job. Companies also need bench strength, not full-time workers. They need to be able to call up their specialist when and how they need him or her. Gig workers fill just this need.

 

Social change, millennial and Gen Z grew up with information on demand, they did not have to seek it out, they look no further than their closest tech device. These generations of workers see no reason why work needs to be done in a certain location, at a certain time or in any particular way. Combine this total 180 view of the traditional American worker with deafening calls for benefits and rights that equalize the employer-employee relationship, such as paid family leave, paid sick leave, fair pay, etc… and you have a more empowered worker, a gig worker.

Empowered workers that hustle their asses off don’t need your company’s 9-5, they can leverage their specialized knowledge to negotiate their own terms and conditions under a contract. To some extent, these gig workers aren’t necessarily holding some specialized nuclear fission knowledge that only like .5% of the population has, gig workers are your drivers (Uber/Lyft) and your babysitters or dog walkers (Care.com).

Disruptive technology and the rise of the gig economy are already in play, viva la revolución.

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Work/Life Balance Is a Myth

Allow me to let you in on a little secret, Work/Life Balance is bullshit.

Much like the Easter Bunny, the Lochness Monster or calorie free macaroni and cheese, work/life balance is a myth. Just as Hallmark made up Sweetest Day to boost it’s bottom line, Work/Life balance was made up by Corporate America as a concocted promotion to convince employees that work and life are binary.

Corporate America created the problem, named the problem and then offered “solutions” to the problem. Corporate America created the problem, squeezing every little ounce out of its employees to increase their revenue streams, fatten the owners’ pockets and please its shareholders. Not surprisingly, this turned Americans into over-worked, over-stressed humans who felt put into a position to choose job or family and life. And voila, Corporate America invents the concept of Work/Life balance capitalizing on this zero-sum game. Americans choose work and lose, and Corporate America reaps the rewards. To quell the simmering anger, Corporate America threw us all a bone by offering “Work/Life” balance programs such as flexible scheduling, part-time opportunities, work-from-home, job shares and childcare-at-work. Yet, even with these programs Americans still report being just as overburdened as they were 5, 10, 15 and 20 years ago.

In a 2016 New York Times Article by Susan Dominus, Rethinking the Work-Life Equationthe author recaps the TOMO study by Phyllis Moen and Erin Kelly, professors studying the interaction between work, family and health. Moen and Kelly offer up what they call “Work-Life Fit”. Think of this concept not as life and work on the same linear plane, think of work as one little cheese wedge in the Trivial Pursuit playing piece of life.  Like this:

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And, in order for this mind shift to take place these things need to happen:

1) Give employees almost total control of how they work- including where, when and how they work. Focus on the outcomes of work against company goals and objectives and not how many hours employees work. As the TOMO paper states, this shifts flexibility from being a privilege to a given. Treating employees as self-sufficient human beings by empowering ownership of their work product should result in adult-like behaviors. In the end, most employees just want to do the work. Who cares how they do it?

2) Pay more-than-living wages. Let’s actually rethink compensation and the value of the work that employees provide your organization. Stop basing compensation on  your competitors, FLSA mandates and wildly fluctuating market conditions, and pay employees based on the purpose of his or her work towards the desired results of the company. Can’t find the money? Look no further then your top executives. Does the success of the company really and truly fall on the shoulders of one or two men and women? I can’t even really think of a scenario in today’s world where that could even remotely be true. As workers become more specialized in their expertise and skills, CEO’s and President’s, rely on a more collaborative team of knowledge workers to achieve the company’s vision and mission. Consider this, in 2015, CEO pay increased 16.4% from the previous year while every-day workers got dicked with a meager 2.4% increase to base salary. The money is there, it just needs to be given to ALL of those in the organization that bring value and worth.

3) Paid Family and Medical leave for all working Americans. Fair warning, throughout my blog, I’m going to beat this one to death. The United States is literally the only developed, first world country with ZERO nationally mandated paid parental and sick leave laws. So you can give us all the stupid flex schedules you want company, but if I have to decide between my health and work, I’m choosing my health. If I have to choose between my family or my job, I’m choosing family. This is not because I’m financially secure but  because my more actualized self compels me to make decisions that I will not regret on my death bed. And also, I’m little pissed Corporate America that you would force me to choose one or the other.

In reality, all of these things will take time and a great cultural shift to happen. As an employee of a company, think about how you can individually set boundaries for yourself, think about when and how you will turn work off, think about what emails and calls you will accept outside of work hours if any at all, and consider flexibility and ownership of work when you accept a job offer.

 

If Hillary Becomes President

Hillary Rodham Clinton

My post last week, If Trump Becomes President, hypothesized the impact of a Donald administration on the work world and HR. Historically, Democratic administrations have used the courts and their own executive powers to pass final rules and regulations that keep us HR folk very busy (see: ACA, FLSA, FMLA, ADA, etc…).

I can probably sum up a Hillary Clinton presidency like this: “more of the same”. While Hillary has her own agenda and plans, she will continue the policies and programs passed by the Obama administration.

Headline: Clinton Administration Creates “Good Paying” Jobs for Americans. Like Trump, Hillary promises to create jobs for Americans. She promises “good-paying” jobs  in an effort to strengthen the middle class. Based on her platform, Hillary intends to create jobs in the public sector, in the energy and tech sectors and also by increasing American manufacturing. Extrapolating further, Clinton’s initiatives to build and reinforce the country’s infrastructure signal a potential increase in construction jobs. And yes, these will be union jobs HR folks because, as Hillary states, “When Unions are strong, America is strong”. For those HR professionals already experiencing difficulty filling those energy and tech jobs due to a lack of skilled talent, Hillary hopes to increase your talent pool by “creating a life-long learning system better tailored to 21st century jobs”.

Headline: “HillaryHealth” expands ACA, Medicaid and reduces Americans out-of-pocket health spending. Will we still refer to the Affordable Care Act as “Obamacare” when he’s no longer in office? No? Then I propose “Hillary Health”. If Hillary plans to shore up and expand the Affordable Care Act, she will have her hands full as insurers stage an exodus from state-run exchanges. In a Hillary-led world, perhaps she will make administration less complicated both on those who need health care but also on HR professionals and Benefits Administrators.

Headline: DOL Goes Gangbusters on FLSA Enforcement. The FLSA’s new overtime rules are passed by Hillary and crew but, to throw a bone to small businesses, are implemented in a phased-in approach that also offsets the automatic indexing provision. The Department of Labor Wage and Hour Division commits additional resources making overtime compliance its number #1 priority. HR departments around the country must get smarter on the FLSA and begin to document the reasons why jobs are classified exempt or non-exempt. These changes force HR professionals to strategize on compensation with a future-facing approach and use “non-traditional” workers (i.e. gig workers, part-time and job shares) to reduce company expenditures.

Headline: Within 4 years, Clinton Narrows the Pay Gap . Hillary narrows the pay gap by passing the Paycheck Fairness Act. Wages and pay decisions become more transparent. All private employers are prohibited from asking job applicants about prior salary history and are prohibited from verifying wages via references. Further, HR drives employers to compliance by creating compensation philosophies, conducting annual compensation surveys, reviewing compliance annually and recommending salary adjustments based on internal equity. HR Departments create forms and documentation to back-up pay change decisions. HR Professionals support publishing salaries of employees to further transparency. HR Departments across the U.S. should boost their comp knowledge and prepare to invest in internal data analytics around discretionary and non-discretionary pay.

Headline: Paid Family and Medical Leave for All U.S.-based Employees. While Trump promises to pass paid maternity leave, this proposal seems to reinforce archaic gender stereotypes and familial roles. Hillary promises paid Family and Medical Leave for working Americans, and thus families no longer have to choose job or family member or their own health. While a triumph indeed for all Americans, it will be long overdue. Out of the 193 countries in the U.N., the United States is the only high-income, developed country without paid parental leave.

Headline: The Expansion of Federally Protected Classes. Under a Clinton administration, I highly anticipate the addition of federally protected classes and continued empowerment of the EEOC to enforce anti-discrimination, anti-harassment and anti-retaliation laws. HR Professionals would be served well to brush off that harassment prevention training and deliver it annually.

Headline: Hillary Nominates Obama as Replacement for Justice Scalia. Considering his political and legal career, Obama seems like a likely nominee to replace Justice Scalia. This will get interesting. There is a current contingent of Republicans that are in favor of ticket-splitting, they will vote Clinton for President but split the ticket, voting for Republican House and Senate Candidates. Republicans hope this strategy will moderate Hillary’s “liberal agenda”. A left-leaning Court + Executive Branch could equal a very active 4 years for HR departments across the country.

Hillary has a reputation for getting shit done. So I’m not betting against her. If she is elected President, I suspect that this will be an opportunity for HR practitioners to demonstrate our value to the organization as a strategic business leader and consultant.

Setting Up Employees to Fail

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Implicit within the employment agreement are certain things that the employer owes to the employee to set him or her up for success. If the employer neglects their end of the bargain, the employer ensures the employees’ failure. This is very basic. And I think almost every reasonable person would agree on what the role of the employer is. Yet time and time again, employers fail on this fundamental level. The way this usually plays out is when a manager is sitting in my office complaining about an employee who has barely worked 6 months and all of the shiny luster has worn off because reality has set in. It’s almost like the manager really wants to say (and in some cases does) “well, we hired the employee, now you’re saying we have to something with him:?!?!?!?!”.

Employers owe the following things to their employees as part of the employment agreement. These should be nonnegotiables and HR should be doing everything in their authority to make sure the employer is holding up their end.

The tools to do their jobs. Oh my god. This is so damn obvious. But we have all heard the stories of employees starting work and on Day 1, they do not have a computer, a login, a security badge to get in the door let alone an orientation, a resource to ask questions or a written training plan. Employees know they are hired to do a job. But without the proper tools and training, you, the employer, are making this impossible.

Decent compensation. All companies should have a compensation philosophy, at the end of the day it provides purpose for whether the employer decides to lead, lag or meet the market. This philosophy should be transparent and communicated to candidates and employees. So when the inevitable conversation arises about pay dissatisfaction, the company and the manager are prepared and feel comfortable reiterating the legitimate reasons behind an employee’s compensation.

Expectations. At every position I have been at I attempt to train managers on defining and setting their expectations from Day 1 with their new employee. This is also one of my greatest pain points. How does an employee know what is expected of them if you do not say it? Did you hire a mind reader?

Purpose. Employees need to understand how their individual contributions help achieve the goals of the company. Employees need to understand the purpose of their jobs. Employers who have business plans that flow top down and bottom up, should have no problem defining this line of sight for each employee.

Trust in Management and Leadership. The individuals that represent the leaders of the company must be approachable, they must be honest , they must be transparent and do what they say they are gonna do. Employees who do not trust their management and leadership will do just enough to fly under the radar and will be focused on when the next shoe will drop and not the success of the company.

Safety and security. I’m not just talking about guns or violence in the workplace. I’m talking about workplaces where there is respect for the individual. Employers that allow mockery, drama, off-color jokes, bullying are creating a hostile work environment for their employees. The only thing the employee will be focused on is how long they have to wait for another job to come along to leave their current one. They won’t be focused on helping the company meet its goals.

If an employer does not actively ensure these basic tenets are being met via partnership with HR, they are setting themselves and their employees up for failure.