There is an old saying among real estate developers, “You don’t build the church for Easter!” In other words, when designing seating capacity, the incremental cost required to accommodate outlying scenarios is not worth the investment. For decades, conventional wisdom has held that this same principle is true as managers design their organization’s workforce. You can’t accommodate every demand, right? Management does its best to meet a majority of its employees’ needs and stops there.
Yet, when it comes to workforce planning, we now confront a dynamic where one group of workers might be content with an established set of rules, while another group is looking for something completely different.
And in today’s social-media culture, the age-old premise that “majority wins” is no longer viewed as acceptable. We are accustomed to having the ability to manipulate and define a long list of preferences and settings. It now appears that when it comes to your workforce you really do have to build the church for Easter. It is expected that modern and progressive companies will implement workforce solutions that meet most of their workers’ needs.
But, that’s the here and now. What about tomorrow?
One of the fastest growing segments of the workforce is freelance workers, with one estimate saying that 34% of the workforce is now comprised of contingent workers. I call these individuals “gig” workers. Gig workers are not looking for a traditional employment relationship with a single company; instead, they prefer to set their own schedule and to work on discreet projects for a variety of companies and clients. Uber, Lyft, and to a certain extent, Airbnb, have successfully built their businesses on this burgeoning movement. Instead of relying on a corporate HR department to come up with innovative solutions, gig workers create and define their own workplace vision.
Studies suggest that Millennials are interested in a different concept of work-life-balance. Quality of life is a key goal, with plenty of free time and the ability to stay close to family and friends. Social issues and volunteerism matter, too. If these are the primary goals, then what can beat the ultimate flexibility afforded a gig worker? It seems reasonable to expect a strong shift towards a contingent workforce model.
Not all of the benefits of freelancing solely benefit the the gig worker. Organizations also benefit from a contingent workforce in that it is much easier to manage costs and to control the process of scaling up or down.
Reductions in force will be less costly and disruptive, as it’s much less painful to turn off the spigot of work rather than conducting a mass layoff.
Yet it remains to be seen whether companies will be able to derive real value from this emerging labor pool. Certainly the pool will include talented workers with broad experience. The challenge will be whether broad experience can serve as a substitute for deep institutional knowledge. Also, a visionary who is on the outside as a freelancer loses the chance to harness and channel the resources that large organizations are able provide. Would the iPhone exist today if it had been left to a group of freelancers to drive the project to fruition? What happens when a key engineer indicates she is done for the summer so she can travel to to Tibet?
Another potential pitfall is the mismatch between short-term and long-term consequences. For example, a contingent worker might be fully invested in a particular project for which she has a strong interest, but she might overlook concerns that could negatively impact the organization from a long-term perspective. It will be a challenge to get contingent workers to not only buy-in to the project, but also to buy-in to the company’s vision.
It goes without saying that business leaders will be faced with a new set of challenges as we experiment with a growing contingent workforce. Here is a trivial example: it won’t really matter whether you stock the break room with soda or juices. The gig worker stocks his own refrigerator with whatever his wants. Setting aside the humor, though, the larger challenge will be (apart from what will surely be a tangled mass of legal and tax consequences) how do managers evaluate, coach, motivate, direct and otherwise lead a workforce segment that is wholly or partially disengaged from the underlying organization? In this sense, management will have to rely on its leadership abilities far more than in the past. No longer will the threat of losing one’s employment help ensure that workers stay in line with managements’ desires. Gig workers have the privilege of simply saying “no.”
At least in the debate between the Millennials, Generation X, and the Baby Boomers, one important characteristic remained the same. In a sense, the employer “owned” the employee. While that concept sounds draconian, it is true that in a traditional employer-employee relationship, the employer gets to control where, when and how the employee does his or her work. It really will be a brave new world when you think about the gig workers’ flexibility and the power they have to redefine the employment relationship. The way we work and how organizations create output may be dramatically different in 20 years.
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