In February we published a post and started a survey on the contingent economy.

The contingent economy refers to the move by many companies to reduce dependence on full-time workers and to increase the use of contract workers. Many of these people will work on projects and will move from company to company. Some will even work on more than one project for more than one company at the same time.

This has also been referred to as ‘Workers on Tap’ by The Economist and is closely related to use of the ‘The Hollywood Model’ where teams come together to deliver a project and then disband. For more on the contingent economy see this article from Forbes.

Our basic question was about the impact of the contingent economy on workers.

• Bad for workers and society 15%

• Good for workers and society 5%

• A bit of both 70%

• It’s not a big deal 5%

• Who knows 5%

Perhaps it was an error on our part to give people the choice of an in-between position. We could have forced people to choose ‘utopia’ or ‘dystopia’ but that would have been misleading. At TeamFit we believe that this change will have mixed results and that it is up to each of us to push things in a positive direction. Making sure that the contingent economy turns out to be more good than bad is TeamFit’s mission.

By far the most interesting thing about this survey where the comments made.

There were many comments on the impact that the contingent economy will have on healthcare. This is a big issue in the US but is also relevant to Canadians many of whom rely on extended benefits from their companies for pharmacare and dental care, not to mention physiotherapy.

Several people mentioned the trade off between the advantages of flexibility, especially when it comes to meeting obligations to care for others like children or parents, versus the loss of security and benefits.

The contingent economy will also change the meaning of leadership and make top level leadership much more difficult. The best contingent workers will always be managing their options for other work and will have an eye on their own careers. They will take responsibility for their contributions and want to have these acknowledged to the world (so they can use them to get future projects).

Here are some of the most interesting comments with a few key points in bold.

Connecting workers to jobs is good for the economy. It allows persons with specific skills to quickly find jobs to leverage their strengths, and it allows companies to find the right person at the right time. Perhaps I’m biased because this is a TeamFit survey, but the key to the success of this on-demand economy will depend on employers are able to accurately assess the abilities of the on-demand worker. This assessment is typically achieved by crowd sourcing (for better or worse).

I know a lot of people who plan their life around their medical benefits and job security (i.e. I won’t get pregnant until I have a f/t permanent job). For the higher-level jobs, I don’t think it is an issue – these people are usually “together” and have already accounted for these differences. For others, it will be a tougher change but they will be required to adapt. It will be interesting to see how this changes demand for professions that depend on medical benefits like RMTs, physio, etc. From a work perspective the toughest thing to maintain will be maintaining a team culture and communication clarity if people are in/out of organizations as needed.

This will result in total lack of job security, erosion of employer-employee trust, short sightedness in planning, volatility in the job market and the list goes on.

Less stability, more stress to pay mortgages/rent/etc…

On the company side, less payout in benefits, variable costing structures/budgets, less overhead in downtime.

It enables more liquidity and makes geo less of a barrier. It also reduces barriers, institutions and conventions, which will tend to push wages down. More of a pure market, which will be good as long as the market is well behaved and not ruined with over supply.

I believe the new on demand economy will depend less on good leadership from individual leaders and more on good leadership from every member of a work team. And that, in turn, will drive quality up. Productivity however may suffer when there are too many divergences and no clear decision making process to allow work teams to focus and move forward.

Positive effects if fresh perspectives are brought to existing teams and clients – Potential for emergent professionals to experience a variety of projects and team situations, and to gain valuable experience – May have consequences on consistency of team’s makeup and chemistry – Potential unpredictability of output, schedule and deliverables – Effects on productivity and overhead if new workers always have to be trained and brought up to speed with other new team members, or even existing team members

An on-demand workforce shifts the risk of benefits and security from the company to the individual. This shift can raise a lot of issues. Obviously, companies stand to gain from this and if costs go down, consumers do as well. Workers also gain flexibility. However, the lack of job security and benefits, while it can be fine for younger individuals and those who prefer the flexibility, can be stressful for those who are looking for stability. This may also bring up issues with public welfare as freelancers/contractors no longer have a company to support them in areas such as pensions or health benefits: this may increase the burden on taxpayers. I feel like there may also be a disconnect between company culture/brand and the contracted employee, especially if they do not stay very long. I wonder if society will become more individualistic as people are no longer tied to a company identity.

There is less job security and benefits. However, I believe that this flexibility allows greater work/life balance, and/ or the ability to try new positions and challenges without being locked in for a long time. Jumping into a full time job in a new area that you “think” you are interested in is terrifying – what if you were wrong, and once you are in the thick of it you realize you do not like it. This contingent economy allows for low-risk “testing the waters.” This can make for happier people who enjoy what they are doing so work hard and have more positive results.

Questions will come up – how do we build culture? how do employer-employee relationships change in terms of loyalty, treatment, expectations? how will we define “good” working conditions and “adequate” compensation as the standards start shifting

I’ve seen this networked approach work on a small scale – entrepreneurial companies & their leaders with a network of associates working on a contract basis. This contingent workforce you speak of is already happening, but perhaps isn’t clearly visible (many people report themselves as self-employed, some have made micro-consulting firms out of it). For the marketplace of work to be fair, contractors must have access to information and opportunities so they can negotiate with clients successfully. A successful market of this nature should be fair, rather than be vulnerable to inequality and information arbitrage and asymmetry.

People will be less likely to make large purchases because of reduced job security. I personally do not like the stress associated with constant interviewing, not knowing where your next paycheque will come from and health benefits. It can be good for people wishing for greater flexibility.

Pluses = flexible parental time
Minuses = less job security

Are we going to have enough for everyone? Those who are busy will be busier. The income gap will widen. There will be a pool of low-paying jobs

There are pros and cons of each and that depends on the position, the individuals and the company.

Knowledge transfer within companies becomes non-existent.

In the face of flux, the future of the “resilient contingent worker” is in freelance clusters hired/fired as “atomic unit(s) of resource” (See: https://hbr.org/2013/02/the-future-of-talent-is-in-clusters)

History teaches us that any technological shift creates winners and losers, i.e., creative destruction. This is no different. What’s new here is that the new environment will favour highly educated workers who can manage themselves independently.

Doing work for someone is a type of relationship. In that regard, on-demand employment is, by definition, temporary. That may be fine, if it is what is wanted by both parties, but in some cases it creates an imbalanced relationship, with one party or the other having more power. That is “unfair”, and will create economic ineffiency.

Just in time resources, cost efficiency.
Lack of long-term thinking, precept of loyalty.

It will depend on whether a contract workforce will be additionally compensated for a lack of benefits, etc.

How well does it get done when completion of task is your employment contract? I believe for the doers it will drive performance. When teams start hiring themselves out as package we will have arrived.

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