Detaching work from employment – subcontractors, Uber and the Ontario budget
On Oct. 20, a group of HR professionals gathered to discuss the future of work and the significant implications for HR with David Creelman, co-author of Lead The Work, and co-authors John Boudreau, a professor at the University of Southern California in Los Angeles, and Ravin Jesuthasan, global talent practice leader at Towers Watson in Chicago.
Future leaders need to “lead the work” versus leading employees, according to Creelman, and HR needs to focus on a broader “human capital community” that may include free agents, contractors and employees.
HR needs to be ready to lead this seismic shift. Susan Meisinger, former president and CEO of the Society for Human Resource Management (SHRM) in the United States, recently wrote about a SHRM study of C-level executives, including HR, in which 40 per cent anticipated a non-traditional employment model (or project-based employment) would be the employment model in the next decade.
Organizations have a growing comfort with flexibility over face-time in the office. Employees can work from home, use hotelling, enjoy results-only work environments or go to a local Starbucks to meet or work.
If knowledge workers do not need to be in the office all week, do these resources need to be employees?
The event also featured a panel that included Angie Kramer, CEO of online talent platform JobBliss, Glenn Mosher, a long-term contract employee in IT, and Jay Wall, founder of Studio Jaywall, who makes good use of both freelancers and employees.
They highlighted the trend of selectively outsourcing a job or project to free agents instead of outsourcing an entire business process or function.
The ‘gig’ economy
The “gig economy” is an emerging mindset that extends the idea of enabling work to be done outside the organization. Creelman highlighted three examples:
•Ion Torrent needed a computer program (complex algorithm to address genome sequencing) and used an online talent platform (Topcoder) to find a team to solve the problem without creating “jobs.”
• Procter & Gamble needed people to make a video and found freelancers through Tongal to perform the work faster and less expensively than traditional channels.
• A German telecom used WorkHub to find and organize an army of online clerical talent to tag 10s of 1000s of customer comments.
The premise is that future organizations will have fewer employees.
Currently, it is the finance or procurement departments, not HR, that write the contracts and pay the bills of freelancers or contractors. Managers must find outside talent and define the work.
Consider the current business model in marketing, where they repeatedly use freelance translators, designers and writers or retain an ad agency, where these resources may in turn be contractors.
HR should play a bigger role. HR could define the work and skills required, build a pool of “warm” outside talent and help attract and motivate non-traditional talent.
With its expertise in job evaluation, job design and organizational development, HR can help define the work that stays in-house and aspects of jobs that can be contracted out.
Jobs are often not well-designed. Think about your own role or that of your peers: What portion of your time is spent on high-level activities? What portion is a specialized function?
And how much time is spread among the more general administration or communication activities?
Future jobs do not need to be a mish-mash of activities at different skill levels, to keep people busy all week. For example, freelance specialists could work on lower-level activities or specialist areas that are not part of a team’s core skill set.
Exacerbating poor job design, managers want to make a fast hiring decision and may choose an acceptable candidate, but perhaps not the optimal resource. This leaves the organization with an employee who is permanently sub-optimal.
An employer may also hire someone highly suited to the design and launch of a program, but the role later evolves into an administrator role, managing a program.
The original hire may not have the right skill set or motivation for this role, and the organization is left with an employee who no longer fits the need.
Free agents can be reliable and intent on doing the best possible job. The serial IT contractor on the panel indicated that over 17 years, he has repeat clients and contracts that were renewed. His comments reminded me of a boss early in my career, who used to offer challenging work and say, “If you do a great job, you get to keep it.”
HR’s role is to identify the experts or freelancers, help successfully contract the work to be done and retain talent for successive assignments. Human resources can mitigate the risks of free agents departing with institutional memory and possibly intellectual property.
HR can develop solid knowledge management processes, non-disclosure agreements and contracts with service-level agreements in place.
To embrace the new economy, future legislation may govern work more broadly. For example, Uber drivers in California, as part of a class-action suit, are arguing they are employees and should be treated accordingly. Currently, in the United States, a talent platform is considered an online intermediary — it lacks employees but builds connections and relationships.
Kramer was part of an economic summit hosted by the Ontario government in October on the sharing economy. Ontario’s 2015 budget noted, “These software-driven applications often involve 1000s of individual operators. As these business models are quickly emerging, the labour landscape is changing. Moreover, aspects of the regulatory and taxation environment may need to adapt to new and previously unconsidered business models.”
In the United Kingdom, the title of “human capital strategist” is emerging to reflect the notion of breaking work into components, said Kramer. As human capital strategists, they can help answer key questions: what work must remain with employees (core skills or IP); how are jobs parsed out into specialist work, high-level work and admin-oriented tasks; how is knowledge retained and documented; and how should free agents be attracted, retained and motivated?
The world of employment is being disrupted — is your HR function ready?
Tony Kerekes is a partner at NVision Consulting in Toronto. He can be reached at (416) 406-2308, firstname.lastname@example.org or for more information, visit www.nvisionconsulting.ca.