Are We at the End of the Employee Era?

June 26, 2018

 

 

Walk into any major company and you can see how contract staffing has transformed the employment landscape. Over the past 15 years, companies have increasingly adopted contingent staffing models not just for low-skilled “temps”, but also for more impactful, high-skilled positions with strategic impact. 3rd party outsourcing and contingent staffing have made it so that people spend less time in any given job than they used to. Contingent staffing has also helped to lower the stigma attached to “job hopping” as companies more and more recognize that employees take on contracts to work on a wide variety of projects and enjoy certain lifestyle advantages.

The shift towards contingent staffing hasn’t benefited everyone – certain workers would prefer to be working as permanent employees with the benefits and stability that those positions allow. But for certain high-skilled workers (for example in Supply Chain and Procurement), contingent staffing represents an opportunity to gain a wide variety of skills in a wide variety of industries – while allowing companies to be more nimble and flexible in their hiring.

A Wall Street Journal feature (just a heads up, it’s paywalled) digs deep into the rise of this contingent (contract) workforce.  Though it came out a few months ago, it hit close to home to what we’ve experienced at Argentus.

We’ve long-covered the rise of contingent work because it’s relevant to our business as recruiters – where we place high-skilled contingent labour in Procurement and Supply Chain. We’ve spent quite a few years reading predictions about how this segment of the workforce will grow to 50% at Fortune 100 companies by 2020. We’ve noticed it in our own business: from our perspective, contingent staffing now makes up about half of our recruitment for high-skilled professionals in our niche. So it’s interesting to see such great reporting about the true depth of this shift in the way companies hire.

According to the Wall Street Journal’s reporting, Google’s parent company Alphabet now has a 50% contingent workforce, which means they’ve matched up with the predictions mentioned above – in fact, they’ve even arrived ahead of schedule. And these contingent workers aren’t only doing low-skilled labour: according to the WSJ, they’re managing marketing and data projects, improving product usability, and doing other work that directly impacts Google’s business – even if they’re not hired directly.

There’s sometimes a perception that an increased reliance on contingent workers is all about relentlessly cutting costs. But in our experience, companies really adopt this approach to control costs, maintaining less overhead through permanent staff but sometimes hiring contractors through the roof when the business calls for it. As the WSJ puts it, “Contractors help businesses keep their full-time, in-house staffing lean and flexible enough to adapt to new ideas or changes in demand.”

Bank of America, Verizon, Procter & Gamble, and FedEx now all employ thousands of contractors, joining the other thousands of companies adopting the contingent workforce as a staffing model. But the WSJ article goes on to make a bold claim: it cites an Accenture study that predicts that the world’s biggest 2000 companies will have no full time employees outside the C-suite within 10 years.

Let that sink in for a second.

It could be the end of the full-time employee – unless that full-time employee happens to be at the upper level of management.

It might be too bold of a prediction, but even if it isn’t, it’s clear that contingent staffing is here to stay, radically transforming the way that companies hire and people work. Try to picture a world without full-time employees, and you might picture a world of precarious employment, with workers hopping from job to job without the security that they seek. But you might also picture a world where the contractor-client relationship – or government regulation – has evolved to provide contingent workers with some of the other advantages that full-time employees receive, while also giving them the opportunity to adopt impactful, project-based work.

Like every broad shift in employment trends, there’s a huge spectrum in terms of who reaps the benefits.

We’ve written about research showing that many high-skilled contingent workers have higher job satisfaction than permanent employees – particularly the “free agent” class who pick up contract work as a lifestyle choice rather than out of necessity. Despite this, there are still obviously some issues for employees who would prefer not to work contingent, or – as this article raises – those who don’t mind working contingent, but feel that it blocks their opportunities for advancement.

We think those issues need to be dealt with as this employment model continues to come to the fore. It’s a wide world in contingent staffing – encompassing everything from janitors who’d rather be working full-time to high-priced Procurement consultants who hop from business transformation to business transformation, affecting organizational change and spending the extra time between contracts travelling or with their families. But whatever side of the spectrum you fall on, contingent staffing is where things are going – and we’re going to, as always, be ever-curious to see how it develops.  

 

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