Think Uber, Spotify, Netflix and Airbnb. New ‘Uber-like’ business models are now being embraced in the field of employment too, writes Denis Pennel.
Denis Pennel is managing director of EUROCIETT, the European Confederation of Private Employment Services.
Work and the workplace are witnessing a revolution. To be successful organisations must react quickly, reduce product lifecycles and focus on core business and delivery.
The latest business models, based on digitalisation and connected users, illustrate the shape of things to come. Think Uber, Spotify, Netflix and Airbnb. Each taps into global demand and wide diversity. Their lean business models allow them to make and grow markets and margins very quickly. In just four years, without owning any real estate, Airbnb has gathered the same number of hotel rooms as Hilton Hotels amassed in over 90 years in business. Similarly, Uber is the world’s largest taxi company, but does not own any cars!
New ‘Uber-like’ business models are now being embraced in the field of employment too. Today, added-value is no longer created by companies but by customers and networks. Mass customisation has replaced mass industrialisation and increasingly information products have replaced tangible goods. Low-cost IT and communications means work is increasingly digitalised and divided into tasks. New ‘online staffing’ players and services like UpWork, TaskRabbit and Workana allow people to hire workers for specific tasks – either remotely or at home/work.
Labour markets are increasingly complex for workers too. OECD data shows almost 20% of jobs terminated within one year, while over 33% last less than 3 years. This is forcing workers to embrace a more entrepreneurial approach to finding and maintaining work. Traditional jobs are disappearing as routine work is replaced by machines, fastidious work is increasingly outsourced and creative work is now highly prized and artisanal.
Meanwhile, workers want more authenticity, collaboration and opportunity from work. This together with the fact that we are all living longer and may need to work into our seventh decade, means the very concept of employment needs to be completely redefined.
The optimistic scenario is that this will prompt the creation of new industries and jobs and a host of economic opportunities for people to be micro-entrepreneurs. The reality is that the very nature of work is changing. Work used to be a place to go – now increasingly it is a series of tasks to be carried out often remotely via ‘the cloud’. Organisations used to be hierarchical and work repetitive. Today, organisations are flatter and individuals undertake project-based tasks. In future, work will be different in the way it is sourced, sold, valued, paid, intermediated, carried out and terminated.
So what does this mean for the matching of supply and demand in the workplace? To me, three words illustrate how we must simplify the complexity of the labour market to meet the changing needs of companies and workers: Simplexity – providing easy solutions to complex problems; Flexicurity – balancing flexibility with adequate levels of security for companies, workers, and labour markets; and Adaptagility – providing agility that enables adaptation to change. The recruitment and employment industry must be a trusted partner supporting businesses in providing complex, agile insourcing and outsourcing solutions; matching supply with demand; offering training and development; and providing integrated workforce solutions.
We are experiencing a casualization of work, centred around IT and outsourcing. Work is no longer linked to organisations but to individuals employed under a range of different contracts – temporary, fixed-time, part-time subcontracted, self-employed etc. Contracts are no longer ongoing but based on a demand for expertise and their duration is reduced from years to just days or even hours. Workers increasingly autonomous withcompanies no longer working for companies, but rather individuals coming together to deliver projects in real-time marketplaces.
This reduces direct costs for employers, but places stress on the sourcing, training and adaptation of workers. Companies will increasingly outsource their HR function to ensure the right people in the right jobs at the right time to meet the ebb and flow of customer demand.
The changing nature of employment relationships will require a complete overhaul of welfare and social security systems. Rights will need to be portable, with pensions, sick pay, holiday pay entitlements etc attached to individuals not organisations. When assessing the quality of a job, we should look not at the type of contract, but at the conditions set by governments and regulators, and how the assignment improves a worker’s future employability.