In Fight for Talent, Is Pendulum Swinging Back to Corporations?

The last decade saw the pendulum swing: Faith in business and corporations to offer secure career paths dwindled, and top talent more frequently leveraged tech-based opportunities to “do their own thing.”

Indeed, as we pass the 10-year anniversary of the Lehman Brothers collapse — and the unofficial beginning of the Great Recession — the effects have been clear. But might the talent pendulum be ready to swing back in the opposite direction?

By an increasing number of measures, the gig economy has grown over the past 13 years, from 10% of the workforce in 2005 to just under 16% in 2015. The gig economy, of course, is the name given to non-salaried workers, who may be classified as freelancers, temporary workers, contingent workers, contractors, or on-call employees.

But are the jobs it provides satisfactory to workers and the overall U.S. economy? The gig economy has become a phenomenon of such durability that it has attracted a spate of new books, which are summarized in a recent Harvard Business Review article.

Are Workers Happy? It Depends

One new book, Gigged, pinpoints an increasingly stark divide in the gig economy. For creative jobs and people whose skills are in-demand and relatively highly paid, the gig economy can, in fact, be a boon. It provides flexible arrangements and the opportunity for entrepreneurship.

But for workers participating in the gig economy whose jobs are relatively low skilled, not in demand, or feature intense competition for jobs, gig jobs are a mixed bag. They provide an opportunity to work and earn. But gig jobs do not have benefits, and the salaries in an employer’s market can be low. As a result, these workers may be worse off in the gig economy than under a salary-and-benefit system.

At their best, gig jobs can offer flexibility and entrepreneurship.

The Reasons for the Shift to the Gig Economy

Another new book, Temp, focuses more on the long-term reasons for the shift to the gig economy. While the move is often attributed to technology news such as the rise of the digital economy and the concomitant ability for workers to perform many jobs remotely, the move actually started, according to Temp, more as a combination of business strategy theories and changes in corporate values.

Business strategies increasingly began to emphasize the benefits of flexibility, ranging from just-in-time supplying to abilities to expand or trim the workforce according to needs. Values morphed into an emphasis on short-term profits.

These combined to produce a shift from a midcentury standard that could include virtually lifetime employment and premium salaries and benefits to a more flexible ideal.

At the same time, job market phenomena, such as the rise of the temporary agency, were developing a template for workers who worked only as needed and employers who used third party organizations as contractors for flexible labor.

Can the Gig Economy Work Better?

Both books ultimately note that workers can definitely gain flexibility and entrepreneurship, but that the gig economy also comes with some drawbacks, particularly in the area of benefits and the social networks jobs have traditionally provided.

One solution is to rethink the provision of benefits, traditionally the province of only the salaried job. Temp notes that portable benefits could be a workable solution, offering workers benefits such as healthcare insurance and retirement savings.

What will the gig economy hold in the future? Stay tuned.