Thursday, September 20, 2012

The Contingent Workstyle

There is a trend in business I’ve been watching closely. Personally, I don’t like this trend and consider it another example of the deterioration of the work place. When I started with IBM they had a full-employment practice … which meant they didn’t lay-off workers. Instead they would retrain, remission, and move workers to keep them employed. I was personally involved with that practice when I ran the Programmer Retraining Program.

In addition, in those days, all the cafeteria workers, maintenance workers, security, warehouse personnel, secretaries, etc. were all full-time IBM employees. These were starting level jobs and led to many careers and successful and well-paid employees.

Then things started to change. I don’t blame IBM. They held out the longest with good pay and marvelous benefits. But slowly things changed. IBM hired vendors to run the cafeteria. Contractors did security. Day labor filled the warehouses. Slowly technical work was outsourced, and even in-house, IBM depended more and more on contractors and temporary workers. Secretaries came from Manpower and instructors were retired IBMers coming back as consultants and contractors. IBM had to compete in a global marketplace, and their competitors such as HP or Microsoft did not have the great benefit packages that IBM provided for so long. As the saying went, IBM had to become "lean and mean." Often "lean and mean" meant less benefits for employees and even "less" employees.

My own son worked several jobs at IBM as a contractor. It was a way to increase IBM’s flexibility and lower costs. Contractors typically didn’t get benefits and their salary tended to decrease from year-to-year as new contracts were written with providers. Not only didn’t these contractors partake in the excellent IBM education program, but IBM had to be careful not to provide training for fear that the government would declare them IBM employees. Microsoft got in expensive trouble that way. The government declared many of Microsoft’s contractors actual employees and both fined MS and required payment to these workers.

There is a positive side to this trend. Some workers like the freedom of part-time work and working on individual projects with an end date. They can then take an extended vacation before looking for the next work project. That is one big difference between my generation and today’s x-gen and millennium generations. They value their time off, while my generation sought the stability of a life-long job with one company.

In fact, among my generation, it was not unusual to have workers that built up unused vacation, saving months fro future use, and often were forced to take time off to prevent loosing these saved days. I recall a few years ago when we were required to take a week off without pay (to save on the budget and prevent layoffs). We had a strict rule that we could not log on and do any work. Apparently, most IBM employees log on and work — even while on vacation.

It has actually become an issue in business to force employees to take vacation and not bank large numbers of days since that creates a tax obligation for the employer. Virtually every large corporation in America now requires employees to take a certain number of their vacation days or to limit the banking of unused days. I have to admit that that was not an issue for me. I not only took all my vacation days, but I would extend my vacation time and travels by working several days remotely while on vacation. Maybe that was actually my own personal version of this new trend of work. Maybe I was ahead of the trend.

According to a recent article in Harvard Business Review, more and more people are choosing a contingent work style — that is, temporary work that may be project-based or time-based — over full-time or part-time work. Temporary placement service providers predict that the rate of growth in contingent workers will be three to four times the growth rate among traditional workforces, and that they eventually will make up about 25% of the global workforce.

One reason for the increasing popularity of contingent work is involuntary: not everyone can find full-time employment. But, intriguingly, more and more people are choosing a contingent work style.

Some contingent workers say they are seeking better work / life balance; others want to create or design their own careers by choosing the kind of work or projects that create a unique set of skills, making them more desirable prospective employees. Contingent employment can expose individuals to a broad variety of challenges, demanding constant learning and new skills, which make work more interesting for them.

Often, contingent workers say that it was their full-time employment experience that convinced them to strike out on their own. Research published in 2010 indicates, among workers who voluntarily chose to become independent, that 74% of respondents cited a lack of employer engagement as their principal reason for leaving.

New technologies and services for contingent workers make it easier and less painful to make the choice to go independent. New types of talent brokers such as online networks of retired and veteran scientists and engineers, or organizations which offers crowdsourcing services to companies with innovation challenges, connect free agents with project-based work in virtual marketplaces. The lack of benefits such as health and life insurance and disability benefits has been an ongoing major deterrent to contingent work, but even that situation is changing. Insurance and other benefits can be obtained from organizations such as the National Association for the Self-Employed (NASE) at highly competitive rates. Some professional temporary agencies offer there members continuity of benefits when they are between assignments.

Contingent workers can add to an organization's intellectual capacity and provide instant expertise as needed. Going forward, employers are likely to incorporate contingent workers into their talent strategies. The use of contingent workers by corporations offer several advantages:

Cost flexibility: Not only can organizations derive a cost savings from adjusting staff sizes up and down based on business requirements, but they are also able to control the wages paid for particular tasks by using contingent talent on a project basis.

Speed and agility: Talent needs can change on a dime. New technology or new competitors can expose talent gaps in any organization. Employing a contingent talent strategy enables a company to access the right talent to meet specific skill or competitive challenges quickly, without incurring longer-term costs or disrupting the organization. "Virtual talent" is much easier to find than it was even a few years ago, and can be brought on board rapidly.

A boost to innovation: Contingent talent brings in new knowledge and fresh ideas based on experiences outside of the company or even the industry. Companies that have programs or processes in place to facilitate knowledge and expertise transfer from contingent workers to full-time workers capture that knowledge on a permanent basis. If contingent workers' roles involve moving across the organization, they can also share best practices across organizational boundaries more easily than do internal employees.

To take full advantage of this emerging cadre of workers, employers will need to change the common perception of contingent workers as somehow less important, less skilled, or less committed than "permanent" employees, and must abandon the idea that contingent workers are simply an economic play. Contingent workers bring unique experiences, fresh thinking, and new approaches to problem-solving. Today, the growing contingent workforce provides opportunities for talent-hungry corporations.

Is this progress or is this a decline. Empowered by technology, working from home — or elsewhere, adjusting work schedules to match your personal needs, mixing periods of work with periods of extended vacation, focusing on maintaining your own career goals rather than depending on your boss to manage your career, these are all positive prospects of this new way of work-life.

Of course, many participating in this new trend are from my generation and are using the contingent work-style as a way to ease into retirement. Rather that quit a 40-hour a week job "cold turkey," many are keeping some income cash flow as well as a foot in the business world while enjoying "partial" retirement.

To me the question is whether this is really what today’s workers want, or is it what they have to settle for? My personal experience with many younger workers is that this is what they want. Maybe when the kids start growing and it’s time to pay for college or retirement looms, they will change their minds. But work / life balance with plenty of emphasis on “life” seems to be what the younger generations are seeking.

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