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Labor: The next marketplace transformation

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Draw a Venn diagram. Label one of the circles “What I’m good at.” Label the next “What I enjoy doing.” The third reads, “What someone will pay me to do.

Where the three intersect? That’s your career, if you want one. It’s also the core  framework hiring managers have in the backs of their minds when trying to staff their organizations.

They’re accustomed to hiring employees. They bring in contractors – independent workers, also known as members of the gig economy – for situations that call for individuals with a well-defined “sack o’ skills” for a finite duration.

Contractors are, that is, members of the workforce who have decided they won’t scratch their circle #2 itches through their careers. Their numbers appear to be increasing, very likely as an offset to those who prefer the traditional employment/career approach to earning a living.

Managers generally think of their organization as a social construct. When staffing a role, hiring an employee is their default, and for good reason. They want someone who will do more than just a defined body of work. Beyond that they want people who will pitch in to help the society function smoothly, who will provide knowledge and continuity, who find this dynamic desirable, and whose attitudes and approaches are compatible with the business culture.

Bringing in a contractor is, for most open positions, Plan B.

Which is unfortunate for hiring managers right now. The trend appears to be that if they want enough people to get the organization’s work done they’re going to have to make more use of contractors … and not only contractors but also employees who have no interest in pursuing a career, just an honest day’s pay in exchange for their honest day’s work – who want jobs, not careers.

A different approach to staffing to what we’ve all become accustomed to is evolving, one that’s more transactional and less interpersonal. Culture will be less of a force because contractors will spend less time acculturating than employees; also, the ratio of time working independently than in the team situations where culture matters most is steadily increasing.

In some respects it will be more expensive. Contractor turnover will be higher than employee turnover because that’s built into how the relationship is defined. The ratio of onboarding time to productive time will increase.

Managers who don’t want to head down this road do have an alternative: They can compete for those members of the workforce who don’t want to become independent. The law of supply and demand suggests that this approach will cost more. It will also mean thinking through how to make the work environment as desirable as possible.

One more factor, as if one was needed: The security ramifications of a more transient workforce are significant.

Bob’s last word: “Digital” refers to changes in a company’s marketplace that call for changes in a company’s business strategy in response. Digital is all about products and customer relationships.

The current restructuring of traditional staffing practices is the result of digitization, the rise of the remote worker digital technologies have enabled, and COVID-19, which accelerated it all. It’s the next digital marketplace transformation to which businesses must adapt, only this time the marketplace in question is the one that trades in labor.

Adapting to this nascent transformation of the employment marketplace is less familiar territory, but it isn’t different in principle. Strategists have always had to think in terms of where their organizations fit into an overall business ecosystem. Staffing has always been part of this overall ecosystem. It’s just that few business leaders, not to mention those of us who engage in punditry and futurism … anticipated how quickly and dramatically this ecosystem would morph.

Bob’s sales pitch: Ten years ago, when I published Keep the Joint Running: A Manifesto for 21st Century IT, “Digital” was still an adjective, “everybody knew” the rest of the business was IT’s internal customer, and “best practice” was a phrase people tossed around when they had nothing better to say.

Oh, well. You can’t win ‘em all. But even though Digital has been noun-ified, this book’s 13 principles for leading an effective IT organization are as relevant as the day the book was published.

Comments (8)

  • uh oh – my 3 circles didnt intersect! 🙂

    as to essay above by Bob – at my age my memory is not that good
    but I clearly recall that in the 80s contractors were plan A at many places
    and by by the 90s it was plan A for most places

    but way back when it was the choice of the companies using temps as disposable workers

    now it seems as if things have changed and workers see the enterprises as things to be used when it suits their needs

    and going back to the 60s and 70s it was the same but in a different format.
    the workers were ‘permanent’ but when they got laid off a competing company hired them.
    and then when they got laid of from that place they were hired again ‘permanently’ at the first place

    so while ‘permanent’ the companies used them as temps with jobs that lasted only as long as they held the contract then the workers moved to the next company having the contract

    cant speak to the oughts as I was too old and got laid off permanently so I did not have direct insight to what corporations were doing at that time.

    I did work briefly on a couple of contracts that were ‘guaranteed’ 5 years work but all ended quickly as the employers used workers as truly disposable, without any other company waiting to hire them lke in the 60s and 70s

  • A third reason for contractors is when that is all that senior manglement will hire. My last three positions have been contractor. I would have loved to be an employee where I am now, or at my last job. And my manager would love to hire me. But his boss’s boss’s boss declared a hiring freeze, which they supplement by paying more for contractors instead.

    • contractors have been the norm for a long time now
      sometimes you can get hired permanently but it is still not ‘permanent’ just the way payroll has you entered on the books

  • “Contractors are, that is, members of the workforce who have decided they won’t scratch their circle #2 itches through their careers.”

    Not always.

    There’s a big difference between wanting to commit to a career in a particular field, because “What I enjoy doing”; and wanting to commit to a career at a particular employer, because “Where it’s great to be, forever” — and that LAST circle there, a 4th circle, isn’t explicitly in your Venn diagram at all.

    Until recently, it wasn’t in MY Venn diagram either. Now it’s sort-of-maybe BECOMING there.

    For some hiring managers, and especially for some CEO’s and some founder/owners, that 4th circle ALSO isn’t there; sometimes, it’s there NEGATIVELY (e.g. I Want To Contract Out EVERYTHING But Me).

    I recently encountered a potential employer whose founder/owner is consciously pursuing “Where it’s great to be, forever” as a competitive advantage. I find myself obscurely shocked that ANY founder/owner would want to pursue so outdated an ambition. I also find myself obscurely shocked at my own cynicism, in simply having taken for granted for decades that such an ambition is as dead as the dodo.

    I never really WANTED to become an independent contractor. But various interlocking forces, much more complex and tedious to describe than I want to describe here, PUSHED me in that direction.

    For some people, the covid-accelerated rise of Totally Remote Work has enabled an increase in available gig-worker gigs to pursue. But for others, it has enabled an increase in available honest-to-gosh committed-full-time-employee jobs to pursue. For the economy as a whole, the More Gigs trend will probably be the dominant trend; but for individual workers, and individual employers, it could easily be a toss-up.

    • not sure what your fourth circle really is

      as to career: that is the one thing I focused on while hoping to stay employed long term while doing it; but as I had to keep moving I picked what was best for me and my career as well as interesting work

      I was at one place that was a hybrid of sorts
      there were some old permanent employees staying for their pension
      but they were all paid less than new hires but were comfortable in their ruts

      they hired a big bunch of us for a USPS contract that was scut work but they (usps) told us that when it was done we would get a nice fun contract. uh huh.
      that 5 year contract started bleeding people at one year and was totally done after two years. the company pretended to try to place us internally but those jobs always resulted in getting laid off one by one within a few months.

      nothing special about usps as this corp that was hiring had almost identical contracts with others that ended even faster as we got the work done and then it was whambam thankoo bunches but get out fast now that we dont need you any longer

      • The 3 explicitly named “circles” of Bob’s Venn diagram all concern what kind of work a worker might prefer to do. My 4th circle concerns what kind of hirer/worker relationship a worker might prefer to have. Both are relevant to the worker’s questions of “What kind of CAREER do I prefer to have?”, “What kind of CAREER might I try to get?”, and “What kind of CAREER have I so far ended up with? is it what I really wanted? should I try to redirect it towards something different?”.

        My 4th circle is not EXPLICITLY named as a Venn-diagram circle by Bob in the original post, perhaps because it relates directly to the actual subject of the post — the currently-changing nature of hirer/worker relationships, away from (ideally) permanent employer/employee relationships and towards (explicitly) short-term and temporary hirer/contractor relationships. This is not a recent change; it has been in the works, and widely commented on, for years; but recently, it has suddenly accelerated, and on a very large scale.

        Perhaps my “4th circle” isn’t explicitly mentioned in the original post, because it is the piece of paper on which the 3-circle Venn diagram is drawn.

        “Where the three intersect? That’s your career, if you want one. It’s also the core framework hiring managers have in the backs of their minds when trying to staff their organizations… Bringing in a contractor is, for most open positions, Plan B.”

        In YOUR experience — and much of mine — bringing in a contractor is frequently a hiring manager’s Plan A. No attempt is made to build a workplace “where it’s great to be, forever”; THAT isn’t even taken seriously as a goal, or an ideal, by the founder/owner — or by the hiring managers, the point-of-view character of Bob’s original post.

        My experience also includes a turbulent work environment in which THE ACTUAL EMPLOYERS THEMSELVES only last 3 or 4 years before they go out of business, or move impossibly far away, or get reorganized out of existence, or otherwise vanish. Under those circumstances, a JOB with an employer like that can’t actually be a CAREER, even if I want one that is, because the job is only temporary, because the existence of the employer itself is only temporary.

        But now I have encountered an honest-to-gosh potential PERMANENT employer. The founder/owner is explicitly bucking the trend towards More Gigs, trying to build a company “where it’s great to be, forever”, as a competitive advantage. It’s something of a minor scandal at that company when ANYBODY leaves, for ANY reason. My immediate hirer, who FORMERLY ended up job-hopping involuntarily every 3 or 4 or 5 years like myself, and whose career has intersected with mine at multiple points, has now worked there for 19 years. So, I now face a possibility that I had given up on long ago: do I actually WANT a permanent career with a single employer, where such an antiquated thing might actually be offered and might actually be POSSIBLE?

        A “career” can be the same KIND of work, in the same field; for many different employers in short-term gigs. It can also be THAT SAME KIND of work, for a much smaller number of employers, in (ideally) “permanent” employer/employee relationships. And BOTH questions, “(1) what kind of work?” and “(2) working for how many employers and how permanently?”, are relevant to “what kind of career do I want?” — and NOT just “(1)”, as the quote from Bob, “Where the three intersect? That’s your career, if you want one”, implies.

      • Now dang it! Drawing a four-circle Venn diagram is a whole lot harder than the three-ringed kind, especially if every bounded segment is going to get its own name. But I’m inclined to agree that the kind of work environment is a distinct and legitimate criterion for deciding what a career-minded individual should look for.

  • not sure what your fourth circle really is

    as to career: that is the one thing I focused on while hoping to stay employed long term while doing it; but as I had to keep moving I picked what was best for me and my career as well as interesting work

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