The next small thing

We are experiencing the worst global recession since the 1930s. One of the more remarkable successes in the labour market during this time has been the proliferation of online platforms that allow knowledge work to be bought, sold and exchanged between individuals and now, increasingly, companies. Odesk, for example, a service that's a kind of 'eBay for work', has seen a 400 per cent increase in transactions and is now turning over upwards of $250m per annum. Many others — including eLance, Guru, PeoplePerHour and ki work — are experiencing high demand, as people either give up looking for a whole job or explore alternative forms of employment to restore their work/life balance.

What does it look like?
Imagine you're emigrating. You need to find and record the contact details of all the estate agents in the city you're moving to; all property for rent, broken down by price and proximity to local transport links, and all the open pharmaceutical job vacancies across the city that accept UK-specific qualifications. This would necessitate, at the very least, days of internet research. Instead, you post this 'job description' on Odesk and people from four different countries bid to carry out the work. Two people in India offer to do the job for £25 each. You decide to commission both of them to compare and increase the coverage of information. They populate an online spreadsheet using Google Docs, so you can monitor their work in real time. On completion, you pay the freelancers and Odesk takes its fee from each transaction.

People undertaking this kind of freelance work are likely to be 'fractional workers'. However, this new mode of fractional work is different from traditional freelance and portfolio work because these people have smaller gross income from more income streams, which come together to create the equivalent of a salary.

Earlier this year, BusinessWeek magazine's front cover announced the arrival of the 'disposal worker'. The article in question said: "On a recent Tuesday morning, single mom Tammy DePew Smith woke up in her tidy Florida townhouse in time to shuttle her oldest daughter, a high school freshman, to the 6:11 a.m. bus. At 6:40 she was at the desk in her bedroom, starting her first shift of the day with LiveOps, a Santa Clara (California) provider of call-center workers for everyone from Eastman Kodak and Pizza Hut to infomercial behemoth Tristar Products. She's paid by the minute — 25 cents — but only for the time she's actually on the phone with customers. By 7:40, Smith had grossed $15. But there wasn't much time to reflect on her early morning productivity; the next child had to be roused from bed, fed, and put onto the school bus."

This summary demonstrates a key point: crucially, with fractional work, if you don't perform, you don't eat.

What is fractional work?

A perfect labour storm
There was a time in Japan when a job for life was pretty much the norm. Few people realise that, in one of the world's most advanced market-driven economies, 30 per cent of the adult workforce is now made up of temporary workers. If current government policy prevails (that is, if no inbound immigration is permitted) only one in two people (yes, that's just half the workforce) will be fully employed in Japan by 2050. The Organisation for European Economic Co-operation (OECD) reports that, from the collapse of Lehman Brothers last year to the end of 2010, 25m more people in the developed world will be unemployed.

Recent US research from Professor Alan Binder estimates that 30–40m 'high end' white collar jobs could be lost to offshore service providers within the next generation. According to US politician and academic Robert Reich: "Since the start of the Great Recession in December 2007, the US economy has shed 8.4m jobs and failed to create another 2.7m required by an ever-larger pool of potential workers. That leaves [the US] more than 11m jobs behind. (The number is worse if you include everyone working part-time who'd rather it be full-time, those working full-time at fewer hours, and people who are overqualified for the jobs they're in)."

In the EU, short-term work contracts have increased as a proportion of total employment. In the Netherlands, this has gone from 12.7 to 18.3 per cent, with a jump from 8.5 to 14 per cent in Italy, and from 11 to 12.3 per cent OECD-wide over the past decade. This figure is even higher closer to home: an estimated 25 per cent of the UK workforce is on short-term contracts.

Mark Kobayashi-Hillary, the author of Who Moved my Job? and a lecturer at London South Bank University, wrote recently that "the internet has created a delivery mechanism allowing companies to find skilled workers wherever they are in the world... We are all truly competing with the world for a job today and there is little sympathy from employers."

Indeed, one likely outcome, perhaps ten years from now, is global wage parity, where a contact centre worker in England is paid the same as his counterpart in India, and a parking warden in Paris is paid the same as her equivalent in Beijing.

Opportunity or threat?
Our understanding of mainstream theories of organisation were developed at a time when human communication was primarily face-to-face and mediated by the printed word. Under that system, a number of people worked under the same roof, hermetically sealed from the outside world. Life has moved on and now there are too many signs of a tectonic shift in the nature of 'work', which can no longer be ignored by either organisations or individuals.

One of the few areas where real innovation has occurred in business and government is in the use of labour.

The models hadn't altered since the industrial revolution; we confuse the creation and evolution of the rights of workers with real progress. But recently this has all changed. In April, 2010, Computer Weekly reported: "IBM is considering cutting three-quarters of its 399,000 permanent staff in the next seven years and re-hiring them for projects as part of an HR strategy due to end in 2017. IBM told Computer Weekly that it could reduce its workforce from 399,000 today to 100,000 in 2017. Tim Ringo, head of IBM human capital management, said IBM would re-hire the workers as contractors for specific projects and, when necessary, use crowd sourcing."

If this initiative plays out as it should, it will set a precedent for a completely new model of work that will impact on the pharmaceutical industry; that of people on demand, in the form of fractional work. It won't be surprising if organisations start to leverage open source labour models, appointing network leaders responsible for delivering on-demand networks of people. This will allow companies to shrink and grow their workforce in real time, freed from the constraints of healthcare, sickness benefits and pensions payments.

Under this new model, there will still be a need for a core number of permanent staff, but this will be a vastly reduced number.

If you don't think this model would be attractive to big business, think again. For government, it has the potential to solve many of the problems arising from the mass redundancies they must now make because of their addiction to the model that insists on the notion of the unit of work being a whole job. They could put government administrative and customer services work on Odesk; even better, they could extend existing government websites in a way that enables the syndication of government knowledge work exclusively for UK citizens.

Uneven spread
It's public domain knowledge, but not widely known, that traditional command-and-control structures of work are, at the least, disabling people from working through workplace stress and, at worst, actually killing them. Since 2002, studies by the UK Work Foundation indicate that the majority of the 2.8m people on incapacity benefits receive them because of workplace stress. The command-and-control structure is to blame. In May 2010, the Independent revealed research that suggests "hundreds of thousands of the UK's 40m workforce suffer mental distress as a direct result of difficult, uncaring and burdensome jobs."

Employee 'rage' resulting in suicides is becoming a common occurrence. This is happening both in the West, with France Telecom's spate of suicides in 2007/08 hitting the headlines, and in the East, most recently with Foxconn in China, where several suicides have resulted from oppressive workplace practices. Instead of looking for new ways of working, leaders order the deployment of more safety nets to 'save the lives' of workers who are literally jumping out of the window.

"Imagine organisations in which most workers aren't employees at all, but electronically connected freelancers living wherever they want. And imagine that all this freedom in business lets people get more of whatever they really want in life – money, interesting work, the chance to help others, or time with their families." So said Thomas Malone, a professor at the MIT Sloan School of Management. Is this such a bad outcome for society and humanity to aspire to?

Companies, governments, small businesses and individuals must start to realise that a 'career' is no longer a feasible or desirable way of organising working life. Unfortunately public policy, particularly in education, work and pensions, is still based on the assumption that careers are the most desirable form of employment, and that they can be offered to more and more of us. People will have to view work as an instrument of self-development and personal autonomy and entrepreneurship; not as a status symbol, but as an attitude. The attitude that everyone is going to need: that fractional work is the next small thing.

The Author
Leon Benjamin designs people networks and is the author of Winning By Sharing.

To comment on this article, emaiil pm@pmlive.com

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