The New Work Landscape
How gigs, contract work, and other alternative work arrangements are polarizing our workforce.
Happy Thanksgiving!
I’m spending today with family and friends, and have the day off. I recognize that’s increasingly a privilege. Lots of people are going to be working today and tomorrow, and not just because it’s Black Friday (though that’s a huge part of it).
In this piece, I’ll talk about a survey paper from researchers at UMich, on the new landscape of work, which is increasingly full of what the authors term ‘alternative work arrangements’ - part time jobs, platform-enabled gig work, contract work, seasonal work.
Introduction
The nature of work is changing a lot, all over the world. We have a presidential candidate saying we need to provide job guarantees for people, while we have another saying well-paying jobs aren’t coming back, and we just need to give people money so they can be free to pursue what they want.
I’m interested in how it’s changing, and what it’s leading to. Are part time jobs all they are cut out to be? Can you make a living as an Uber driver? Should I start accepting work on Upwork to improve my resume? Flexibility is important to me, but how feasible is that?
This paper looks at a whole bunch of papers on this changing nature of work, and tries to categorize jobs in different ways, as well as gauging how people experience those types of jobs, and their impacts on society. It also goes into a bunch of future directions for research, which I’m not going to go deep into.
To start with, most definitions of a ‘traditional jobs’ are where work is performed on a fixed schedule, at the firm’s place of business, under the firm’s control, and with mutual expectations of continued employment.
But now, job growth is increasingly in jobs with permeable boundaries of when, where and how work gets done.
Between 2005 and 2015, the percentage of workers in alternative work arrangements rose from 10.1% to 15.8% of the total labor force. Almost all the growth in jobs came from these non-traditional jobs. The fastest growing among these is in platform-enabled gig work, even though they are only 0.5% of all workers. Increasingly, flexible work is taking over the workplace. Only 50% of all workers work a traditional 9 to 5.
There’s three dimensions of flexibility that have been observed
Flexibility in the employment relationship
Flexibility in scheduling the work
Flexibility in how work is accomplished.
The experience of workers differs by if workers actually seek out the flexibility to fit in with their lives, or are forced into it because of limited options. Typically, professionals and people who are in the higher levels of companies have more flexibility than lower level employees.
Why is this sector of work growing?
Companies are going from a stakeholder model to a shareholder model. Remember how all those ‘90s movies talked about the scrappy protagonist ‘making partner’ at their law firm? That’s a stakeholder model, where employees own part of the business. With a shareholder model, companies focus more on short term gains, and on making investors and shareholders happy. They usually don’t work for the company, and are often investment companies or the general public.
So there’s increasing pressure to cut costs. Guess what costs a lot? Regular employees. It’s hard to deal with them when market needs change so suddenly, and they also cost a lot in terms of benefits and training.
Given that, companies are happier to outsource to agencies, or hire temporary or contract workers. Companies like Uber prefer having gig workers to keep the business going until they can switch wholesale to self driving cars.
This way, ‘precarious work’ has increased, where there’s no upward mobility, training, or health/retirement benefits.
Secondly, technology has improved such that work can be done from anywhere, anytime. Cloud tech and collaboration software has improved so much that even employees in the same location use them to work together.
Third, now work can be split right down to the task level that parts of it can be contracted out, or outsourced.
Fourth, whenever there is an economic decline, self employment rates increase. After the 2008 crisis, there has been a larger spike in these kinds of flexible jobs that let you cobble together a living on your own terms. It surprised me that 56% of contract workers chose to work those jobs because it fits their needs better and offers more freedom and flexibility. When we need two incomes to run a household, it’s natural that at least one of them feels the need for more flexibility in their work, so they can be the primary caregiver to children or elders in the family.
Finally, more workers want out of the grind and do work that they personally find fulfilling, and flexible jobs help them achieve that aim.
Classifying Alternative Work Arrangements
There’s three dimensions of flexibility - employment relationship, scheduling, and place of work. What this paper does is to go into the different types of flexible relationships between employers and employees, and then weigh them on scheduling and place-of-work flexibilities.
Flexibility with employment relationship
There’s multiple kinds of relationships here
Direct employment beyond standard relationships:
This is employment where there’s a regular employer-employee relationship, but with a few adjustments. This includes part time work, seasonal work (e.g. farm workers), and on-call work (e.g. substitute teachers). The authors didn’t find any studies on the nature of oncall or seasonal work, so let’s dig into part-time work.
Part-time workers often do the same work as full-time employees, but they don’t advance as far in their careers.
One type of part-time workers are those whose companies hire them, because they want to retain high performing employees who want flexibility, or are retired but still want to contribute. These employees have the same kind of commitment to their jobs, and have the same socialization and manager satisfaction as fulltime employees. These employees are called ‘retention part-timers’, and they are relatively privileged.
The other type of part-time worker is one whose companies hire them so as to be able to have more schedule flexibilities and to reduce the cost of wages/benefits. These workers are a secondary labor market, who are either supplementing low wage jobs or who are unable to find a fulltime job and are cobbling together a living with multiple part time jobs. They are more stressed and have less job satisfaction.
Agency work
These have work relationships between a client organization, a staffing agency, and the worker. The contracts can be short term, or long term. The agency is the employer for all regulatory purposes.
The reasons companies employ people from agencies is to lower admin costs and to hire people based on specialized skills. I notice this to be the case for startups who are still figuring out their tech stack and business models. Often, it is also a way of auditioning workers to transition to fulltime employment.
This makes these jobs to be an important part of a path towards upward mobility.
This means those with more chances of becoming a fulltime employee are happier and more satisfied with their jobs than others. But this also means workers concentrate more only on completing tasks related to their job, rather than looking at contributing peripherally to overall running of the organization, or towards being social and making connections within the company.
Contract Work
These are people who have specific skills being brought on for a short term project. The more skilled of these call themselves freelancers.
People with less need for employment security are drawn to these jobs. I’ve noticed that people with spouses in high earning jobs often are contractors, as are single men. These positions also don’t offer much in terms of learning on the job, or training, so in general people who consider themselves already highly skilled take up these jobs.
In general, contractors tend to either have very high or very low levels of experience.
Contractors tend to be as satisfied as regular employees, but they don’t feel as committed to their organizations as regular employees, and studies have shown contractors provide lower levels of customer service.
It’s also a very time-dependent job, which means those contractors with more levels of family commitment are less successful than those with lower levels.
Flexible Schedules
Companies may offer flexible schedules because of fluctuation in customer demands. With on-call employees, the flexibility is often not predictable. With agency employees, it depends heavily on the client. Once employees choose a client, they don’t have much choice in when they choose to work. Gig employees can choose their schedule, and those jobs are the most flexible.
There’s been studies that show that millennials are more likely to pick a job that offers flexible schedules.
Flexible schedules result in less absenteeism because employees can take time to go to appointments when they are available during the workday, and make up for it later in the day. An important factor in satisfaction is if employees can control when and what they do during breaks. They also help reduce conflict between work and family. Workers reciprocate by working more and longer hours.
But the issue with most jobs that offer flexible schedules are that they become deals between managers and employees. Unfortunately managers can deny or penalize flexibility. In a lot of workplaces, there is a stigma against those taking advantage of flexible scheduling. It even extends to bias against people who seem like the sorts to take advantage of flexible schedule. For example, people might assume a mother is going to be more flexible in her schedule and be biased against her, while considering the guy who goes rock climbing and works from random remote locations as cool. I’ve personally experienced this when I had a temporary health issue, and it definitely is not great.
Manager level negotiations for flextime isn’t sufficient in the average workplace. There needs to be organization level policies or system-wide interventions to make sure of a level playing field. This paper cites the example of an intervention in certain teams of the Boston Consulting Group (BCG) where there’s a rotation for one employee to get the night off. This means they don’t have to take any client calls and won’t be interrupted for an entire evening, and this led to more employee satisfaction, and less work/family conflicts. I am not familiar with consulting firms, but it definitely seems hellish if you’re on 24x7, and have to have interventions to take a night off, and I’m glad I am not in that line of work.
Results-Only Work Environments are another thing that I hear a lot about lately. They are workplaces where you can work whenever, wherever you want to, and don’t need to get permission from your manager for that flexibility. I wonder how they work in practice, and what factors are essential to ensure their success.
There’s a big need to institutionalize flexible schedules in a workplace, otherwise those jobs don’t get considered legitimate.
Flexibility in where work is accomplished.
Remote work is getting more and more common, now that high speed internet is widely available, and online collaboration tools are better than ever before. Also, there’s more technology to monitor employees’ work, so employers are more comfortable letting their employees work remotely.
These jobs are great as they lead to less stress, more feelings of autonomy, job satisfaction, and even increase job performance. The jury is out on work/family conflicts, because while workers can spend more time with their families because of lack of time spent commuting, the boundaries between work and family time are blurred, and they work longer hours.
One cool thing is, remote work reduces the impact of social stigmas and demographic differences, because you tend to be interacting more often with someone’s work rather than their person, which means you are less likely to view them from a discriminatory lens.
These jobs however tend to be lonely, and have less engagement from workers as they don’t have strong work relationships or a sense of community. When the whole team is widely distributed across locations and timezones, it makes it much harder to find the work meaningful, because you don’t get to celebrate wins in person. Workers also feel less sense of responsibility towards their employer because it feels like a distant abstraction. Fault lines also develop along the lines of who is available on what period of time, and it can be hard to fix them once they have formed.
Employees feel happier and more secure when their managers reach out to them in the form of sharing information rather than trying to monitor them. I find this a big, vital difference, because one big complaint I hear from people who work from home are when their manager messages them over trivial things as a way of checking if they are working or slacking off. This communicates a lack of trust, and it affects employee relationships.
Summary
Platform-mediated gig jobs are the fastest growing sector of jobs. They are flexible across all dimensions of flexibility. But there hasn’t been much research on how people experience gig jobs, and that’s an area where more work needs to be done.
Workers are happiest when they choose the flexibility to fit their needs, rather than if they had to choose these jobs by compulsion. This is because getting to choose gives them a feeling of control.
Alternative work arrangements can be incredibly uncertain in terms of work schedule and income. In order to mitigate this uncertainty, workers need to have high levels of rare and valuable skills.
We can see two worlds emerging here:
High skilled, highly paid workers who everyone is fighting over; the authors call this a War For Talent. These workers have choice and flexibility
Low skilled workers who find it hard to hold a job with financial security. Gigs have high supply as compared to demand. In these jobs, there’s more discrimination likely because it’s usually an individual making a hiring decision rather than an organization. These workers also don’t choose this flexibility; they have few other options.
These jobs are hence precarious. This leads to the formation of a ‘precaritariat’, a new social underclass, united by the sense that their labor is instrumental to their livelihood, and employment is insecure. We can see that political candidates in America are warring for the votes of this group, by providing various solutions, be it bringing back the jobs, or creating a jobs program, or disbursing funds directly to these workers to provide them with even more flexibility.
Suggestions from the authors
The authors recognize that we need to create a more positive environment of work in this new landscape. Economic insecurity is a big feature of this landscape, and it’s something that needs tackling.
A big question of our time is, how do we create new jobs that pay a living wage with benefits, as well as offer workers some amount of control of what happens when the job is terminated. Studies show that ‘good jobs’ which offer all these actually have more profits, less costs (presumably from less turnover) and more customer satisfaction. But how do we create more jobs of this nature? That’s something that needs a lot more research into.
In this landscape, workers need to focus on managing uncertainty by learning to manage their income. There’s apparently apps that help you do that! The authors mention this one called Even. (Disclaimer: I haven’t really looked into what it does and if it’s legit). They also need to improve their skills, and they say MOOCs are great ways to improve skills. I personally disagree. MOOCs are great if you’re already motivated and if you know what you want to study. As the abysmal completion rates show, most of us don’t fall into those categories. You could definitely use them to improve your lot in life, but you can’t recommend them as a solution, because success rates vary very greatly on those programs.
There’s three dimensions the authors want to focus on to help build a better jobs landscape:
Purposeful work
With increasing flexible work, it’s becoming incredibly hard to grok the purpose of work itself, never mind the purpose of the tasks in front of you. With gig/contract work, you don’t get to get behind a brand or organization and use their values to guide you. While 24 year old me considered organizational values to be garbage, I now know it’s important in terms of guiding subjective decisions.
In order to improve your sense of purpose, connecting with people you come across in your line of work, especially those you see regularly, can be helpful. They can be clients, or others involved in the same tasks, or people who help you complete your tasks.
Supportive Work
If you work remotely, or alone, it can be hard to feel a sense of community or camaraderie, and it can feel like you are incredibly alone in your struggles. One way to beat that feeling is to engage in the communities in your coworking space. Another helpful way is to try personalizing your workspace with decor, and other affirmations. At an organizational level, companies like Uber or Upwork can themselves organize events and encourage their employees to participate in those events and join support organizations.
Career Success
These days, even fulltime employees rarely have a career path laid out for them by their employer. The nature of employment has changed, and most jobs that exist now didn't exist before, so we are still figuring out what paths they lead to.
This means we need to have more individually-directed career plans. You need to make your own career path, by identifying skills you need in order to achieve your own personal vision of success.
I read this book a while ago titled The Startup Of You. It’s by a founder of LinkedIn, and while I didn’t agree with all of it, I found it an interesting view of the job market and your place in it. Its central thesis is that you are the only person who can direct your career path, and doing so today means a lot of creativity and taking chances. More books will probably emerge on these lines.
But what we really need are ‘smart jobs, which come with a network that is devoted to helping you develop skills, which can help find your calling, and which encourage people to see themselves in different, transformative ways. Along with these, we also need agencies that help you create your own career path, especially for lower skilled workers.
My Take
It’s definitely interesting to categorize and split the landscape of jobs today this way to understand it better. I’m personally uneasy with how ‘average’ jobs, which a regular person with regular skills could use to move upwards socioeconomically are disappearing. This has become a reality with writing. There isn’t really a market for short stories and middling fiction in the way there used to be, and it’s certainly not financially viable to be a writer anymore. The same can be said of a lot of creative professions.
Again, it comes back to this Onion article about pursuing your passions on nights and weekends while working a soul-crushing job. Now, writing fiction isn’t even a lucrative enough side-gig, unless you’re working your ass off cranking story after story, and marketing all the time. And this is when you are doing reasonably okay for yourself.
I’ve thought a lot about switching to contracting as a way to still do my job while having more time to write, but I now realize my instincts on not doing so were right; I feel like I have a lot to learn, and writing a novel will probably have me be less successful at that career anyway. I also realize most of these flexible jobs don’t really care about any career development you might need. It feels like you have one purpose and one purpose alone at those jobs, and that is to complete those extremely specific tasks, and there isn’t much room to grow. That can easily stunt a lot of people.
It strikes me that a career development center for gig workers is going to be a hit, if someone figures out how to structure it. It’s hazy what that’s going to look like, but just for a lark, I wonder about interactive audiobooks that teach you useful skills while gauging your busyness levels, and help you learn, maybe a new language(?) while you’re driving.
That said, the unsettling part about the new work landscape is, it’s becoming more and more like the old work landscape, where you work for yourself doing a variety of small tasks to eke out an income. It’s probably leading to weird power structures and lifestyles. All I can say is it’s going to be interesting to watch.