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A new workforce ecosystem is emerging: That of the gig economy

Roslyn KuninDuring a strike, it is customary for workers from various sectors and industries to show solidarity with their fellow workers on the picket lines, with passing motorists often offering supportive honks.

However, the recent strike by federal government workers did not receive such backing. Instead, passing motorists were more inclined to yell, “Go back to work,” rather than offer encouraging beeps. There was little sympathy for the demand to align public sector wages with the increasing cost of living.

This lack of support stemmed not only from the fact that – as Gwyn Morgan has outlined – government workers already enjoy higher pay, better benefits, pensions, and job security than those in the private sector but also because it is the less generously rewarded private sector workers who contribute the taxes that provide for the civil servants. It was also compounded because an increasing proportion of the Canadian labour force is not even employees in the usual sense of the term.

woman-laptop gig economy employer/employee relationship workforce ecosystem
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Since the industrial revolution and until the current century, work structures have been pretty simple and fairly straightforward. Most workers were hired by a boss or a company. They worked in a set place for fixed hours, got regular pay and could expect their job and income to continue.

Initially, pay and working conditions were pretty dismal, and benefits non-existent; but gradually, through unions and legislated labour standards, pay and working conditions improved. Benefits like paid vacations and pensions became the norm. In the 20th century, being an employee in a country like Canada was not a bad situation.

Now, in the 21st century, this picture is changing. The proportion of economic activity conducted within the traditional employer/employee framework is declining. Even government bodies and large corporations are increasingly relying on self-employment, contract work, consulting, and gig arrangements instead of offering permanent jobs with long-term continuity and benefits. In these newer work configurations, security lies in knowing what you will do next, and benefits are what you can manage to save for your old age.

Transitioning from the old structured system to the gig economy brings both advantages and disadvantages for workers and organizations. The organization that needs the work done is no longer simply an employer.

Let us take some examples from academia. Traditionally, university faculties were primarily led by tenured full professors who enjoyed prestige, stature, and job security. Junior faculty members aspired to secure these coveted positions and often succeeded. Contract-based work, often performed by graduate students, involved limited research and lower-level teaching.

Today, tenured and tenure-track positions are diminishing and less attainable. More of the teaching is done by contract staff on a term-by-term basis at low pay with no benefits and definitely no job security. Further, these contract workers are less likely to be graduate students and more likely to be full PhDs who had hoped for tenure-track jobs. However, as long as such qualified contract workers are available, they provide the university with the benefits of flexibility and low costs.

On the other hand, a university that we shall not name recently attempted to hire an eminent environmental scientist. They offered her a full professorship with tenure and were amazed when she turned it down. Unlike many newly graduated PhDs, her reputation and network meant she could do better through consulting and contracting.

The above examples illustrate that all organizations will face many different types of challenges under the new systems of work, particularly during the current tight labour market. Disparities between employees and other workers will have to be dealt with. Employees may resent the high rates of pay received by specialized contractors, who in turn might resent the comfortable security and benefits enjoyed by employees. Differences among non-employees can be substantial.

As Elizabeth Altman and other researchers have noted in the MIT Sloan Management Review, organizations will have to develop whole new workspace ecosystems to attract, retain and effectively deal with the workforces needed to keep their companies functioning. They will have to be proficient and make effective use of online platforms to access the talent they can no longer keep permanently on staff. They will have to have systems that fully integrate contract workers into their human resource bases and into the values and structures of the company. They will have to cultivate acceptance, fairness and co-operation among all workers, staff or not.

Their research clarifies what is happening and what must be done in this new workforce ecosystem. How it will be done is still to be determined.

Dr. Roslyn Kunin is a public speaker, consulting economist and senior fellow of the Canada West Foundation.

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