The fastest-growing segments of America’s job market — by far — are temporary and part-time employment. According to the Bureau of Labor Statistics, the number of US part-time employees hit a record high of 28 million. Temporary employment has jumped 50% since the depths of the financial crisis. This “ephemeral workforce” phenomenon isn’t just American; the UK has also set records in the contingently employed. Something profoundly structural is going on. Even healthier economic growth won’t make it go away.
More companies want far greater flexibility with far fewer people. Their greatest human capital concerns have shifted. They seem increasingly focused on productively cultivating that core 20% to 25% of people who reliably generate the 70% to 80% of enterprise value. They’re rethinking their economic relationships with the rest.
Workflows and innovation initiatives have been artfully reorganized around “projects” to facilitate faster, cheaper and easier contingent participation. Technology makes reviewing, refining, redesigning and revising both jobs and job descriptions as dynamic as a commodities trading desk.
Have people been commoditized?
Of course not. But the ways people’s knowledge, skills and expertise get plugged into the workplace has been. For roughly half of America’s workforce, the role, rules and requirements of “the job” are dramatically different than they were even a decade ago. Just ask anyone working in the health care, financial services, automobile, retail, media, publishing, education, advertising, real estate or defense industries.
It’s not that troubled economies and disruptive innovations inherently shed more jobs than they create; it’s that ongoing global restructuring of markets makes temporary and/or part-time employment more attractive for more organizations. Outside of the enterprise core group, bringing full-time employees onboard is increasingly seen as a riskier and less rewarding business bet.
And higher education isn’t offering the human capital cure. A recent McKinsey & Co. study suggests that almost half of recent college graduates are working in jobs that don’t really require a degree. Do we really believe MBA or law degree credentials would better procure their full-time employment?
As this blog observed literally three years ago: “Most people looking for a job today aren’t competing against each other.
They’re competing against alternative ways to getting that job done. For most organizations, people are a means and medium to an end. They’re not hiring employees, they’re hiring value creation. If they can get that value — or most of it — from contingency workers, outsourcing, automation, innovative processes or capital investment, why wouldn’t they? If [technically] tweaking a process or program empowers three people to do the work of five, then tweakonomics is the way to go. The profound difference between today  and 2005 is that good hires looked like better investments than great tweaks back then. In 2010, good tweaks look like better bets than even great hires.”
The “New Permanent Temporary” has arguably been the biggest employment change since I wrote that post. Like Smartphones, part-timerism’s global growth proliferates. In fact, temps with Androids and iPhones already use services like Gigwalk and LinkedIn to more profitably find and manage their part-time and/or temporary work. Amazon has its below-the-radar “Mechanical Turk” workplace market. For the gainfully underemployed, everyday is BYOD; their technologies are becoming their toolkits. Technology doesn’t just facilitate automation and innovation; it makes contingent, temporary and part-time job markets more efficient and effective.
The economic irony for both sides of the enterprise equation is that maximizing the value of part-time employment has become a full-time job. Employers from WalMart to PepsiCo to Adecco to Microsoft pay premiums to assure their armies of independent contractors and temps cost-effectively get the job(s) done. Conversely, serious part-timers quickly learn that productively juggling several temporary positions requires more skill than luck.
Holding the uncertainties around Obamacare, government regulation, automation and/or economic growth responsible for full-time employment aversion misses the larger point. The rise of part time jobs means the absence of full-time commitment. Growing number of employers are increasingly committed to not being committed.
It’s analogous to the demographic rise in cohabitation before marriage: the nature and expectations around formal commitment are being redefined. Just as cohabitation doesn’t necessarily lead to marriage, temporary and contingent employment doesn’t necessarily lead to full-time jobs.
The most serious question going forward is not simply whether or how more full-time jobs return, it’s whether or how part-time and temporary workers become more valuable. Will employers invest in developing the knowledge, human capital and capabilities of their contingent workforces and independent contractors? Or is the new “permanent temporary” merely about a fair day’s work for a fair day’s pay?
As Daniel Pink’s Free Agent Nation and Tom Malone’s E-Lance Economy argued well over a decade ago, the innovatively self-employed can earn handsome livings if they’re willing to adapt, invest in themselves and learn. But who invests in the not-as-innovative and not-quite-as-adaptable part-time worker? Who is their Salman Khan? What are their media and mechanisms for becoming more valuable?
As the brilliant economist, Treasury Secretary and former Harvard University President Larry Summers once observed, “In the history of the world, no one has ever washed a rented car.” If this implies that no employers will invest in the upgrade of their “rented” temps and part-timers, that bodes very poorly for this rising class of workers.
My bet? Underemployed assets are frequently undervalued assets. Undervalued assets attract savvy investors and entrepreneurs. Prepare for the next New Permanent Temporary.
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