The Gig Economy: The Complete Guide to Getting Better Work, Taking More Time Off, and Financing the Life You Want, by Diane Mulcahy
FIVE years ago Diane Mulcahy began teaching an MBA course at Babson College on the ‘Gig Economy.’ The course was named one of the “Top Ten Most Innovative Business School Classes” in the US by Forbes.
The Gig Economy is still in its early stages, certainly in South Africa, but is nevertheless disrupting how we work. Just one generation ago, the generally understood view of “real” work was to be a full-time employee in a secure full-time job, with the prospect of promotion.
The current spectrum of work has at one end the traditional corporate job with the traditional career ladder. The employed are surviving in their full-time jobs, but will struggle if they lose them. At the other end are the unemployed.
In between is a broad range and variety of alternative work, what Mucahy calls the Gig Economy.
While there has always been contracting, consulting and part-time work, what is new is the spread of the Gig Economy into middle class and white-collar jobs. It is now baked into the business models of high-value businesses.
‘Gig’ work without benefits used to be largely limited to the ‘bad jobs’ in fast food, retail and other service companies, but is now transforming our labour markets. White-collar and professional work is now being restructured, contracted out and purchased more cheaply.
The good news is that skilled workers can turn good jobs into great work, and the less-skilled workers in traditionally ‘bad jobs’ can turn those bad jobs into better work.
While the facts I describe below are from one of the most developed economies in the world, the US, the trend for emerging economies like our own is already apparent. In some ways, it is even more severely so.
The average life of an S&P 500 company was 67 years in the 1920s, but today it is just 15 years. This is not even long enough to have a traditional career in the largest companies in the US! This makes most jobs short term (less than five years for most age groups), and all insecure.
In 2015, the rate of ‘retrenchments’ (a sanitised word for an awful human experience!) included companies such as Microsoft (7 800 workers), Proctor & Gamble (6 000 workers), JP Morgan Chase (5 000 workers), American Express (4 000 workers), and Target (2 250 workers). Walmart and McDonald’s both ‘shed’ hundreds of corporate jobs. High-growth technology companies like Twitter, Snapchat, and Groupon all retrenched staff in 2015.
While government work, teaching and academia still offer relatively higher levels of security, they too are under pressure.
Hiring an employee can cost 30% to 40% more than the equivalent independent worker, with the added costs of taxes and other benefits.
The size of the Gig Economy is staggering. Americans engaged in alternative work increased by more than 50% over the past decade, from 10% in 2005 to 15.8% in 2015. All the net employment growth in the US economy from 2005 to 2015 appears to have occurred in alternative work arrangements, not from full-time jobs, Mulcahy points out.
SA figures may be more extreme than that.
What is driving the Gig Economy?
Full-time employees have become the workers of last choice for many companies and this is even more pronounced in economies with strong labour laws. They are the most expensive and least flexible source of labour for companies. Despite this, companies are eliminating the full-time jobs they do have through retrenchment, downsizings and reorganisations. When companies purchase the labour they need by the project, task or by the hour, they can realise greater efficiencies.
Of course, this doesn’t mean that there won’t be some demand for full-time employees.
Moving from a bad job to better work
Low-skill workers in the Gig Economy have the chance of moving from a bad job to better work – a change in the right direction.
“The Gig Economy is an economy of work, but our labour policies only offer benefits and protections to employees who work in traditional jobs,” Mulcahy notes about the US. We are hardly different.
The larger part of The Gig Economy deals with coping with this reality. Denial is a common strategy for dealing with job insecurity, but hardly a useful one.
The question this book answers is how to successfully navigate the Gig Economy.
The first order of business is to articulate your deeply held version of success: what is my definition of a good job, a good career, and, even, a good life? (This is far too important a question to answer quickly. It is a good question to have buzzing about your head while on vacation.)
There are two mindsets we need to consider: the employee and the opportunity mindset.
The employee mindset seeks to answer: what job can I get? A worker with an employee mindset wants an employer to structure a career for her with a predefined version of success at the top, by way of title and salary. This is a relatively passive mindset.
The opportunity mindset seeks to answer: what work can I do, and what value can I bring? Those with an opportunity mindset think more strategically about what skills, experiences, networks, references and knowledge they will require for a better future. This takes more effort than an employee mindset, but is far less risky.
“Diversification is the new normal of the Gig Economy,” Mulcahy explains. This is opening new opportunities, networks, and skills. (The ever-prescient Charles Handy used the term “portfolio workers” for this idea in 1999 in the Age of Unreason.)
A portfolio worker purposefully chooses to build a diversified life made up of multiple roles and projects, both paid and unpaid. Income is derived from ten to 20 places every year, so if one ends, one doesn’t have to worry.
For many readers a full-time job or a significant contract assignment could be, at least temporarily, the anchor gig of the portfolio.
Rules for success in the Gig Economy
Mulcahy has 10 rules for succeeding in the Gig Economy. I note just a few, briefly.
Diversify by identifying and then finding gigs to increase your opportunities, improve your skills and expand your network. Face the fear you have of entering the Gig lifestyle by breaking the fears into manageable risks, and developing an action plan to overcome them.
Be mindful of your time and spend it on what matters. Restructure your financial life, and increase your financial flexibility and security. In this vein think access, not ownership. Access the things you want with less debt and more flexibility, such as the Baby Boomer myth of home ownership. Save for a traditional retirement, but don’t plan on having one.
Your father (or grandfather) probably had one job in his lifetime. Today you might have six. Your young children will probably have six jobs at the same time. They are likely to enter a workforce where fewer people are full-time employees in full-time jobs. Having a diverse portfolio of work will be the new normal, and being a full-time employee for a single employer, the exception.
“When we ask kids of the future what they want to be when they grow up they won’t have an answer. They’ll have a list,” explains Mulcahy.
Readability: Light --+-- Serious
Insights: High -+--- Low
Practical: High -+--- Low