The New Employment Economy

In several blog posts over the last year or so I have referred to “The New Employment Economy.” So what is it? In a nutshell – it is the future.

Anybody over the age of 35 has grown up in a world where they mostly understand work as a commitment to some organization or company that lasts for 8 to 10 years (maybe more) and you move on one or two more times before you retire. The company takes care of your insurance (increasingly less so) provides you with a career path, some on-the-job training and regular raises that maybe gets you a bit ahead of where you started.

In the next decade those days will be gone – replaced by the new employment economy

What are the main elements of this new economy?

• Technology has enabled people to work wherever, whenever they want. Everything from tools that support remote access, to the rise of self-service HR, has made it easy for employees to work from anywhere in the world. This has also made it easy for people to choose to be contractors – or short term employees.
• Twenty-somethings don’t see themselves as employees. The generation coming into the workplace today doesn’t feel the need to attach themselves to one corporate entity and stay there for several years. They are more interested in the work. Where the work is interesting, they will go.
• The rise of entrepreneurship. It is no longer that hard to strike out on your own. More and more people are choosing to start up a business than ever before. These businesses are predicated on a new model where people work together for a common goal, then move on.
• The lessening role of the corporate support infrastructure. Companies just don’t offer much in the way of incentives to work for them anymore. Benefits are not that good, layoffs are always a possibility, training and investment in your future is more limited, retirement plans are dismal, and raises are usually just cost of living adjustments. What a deal!

The new employment economy is going to be characterized by the free movement of resources from job to job. The prediction that one day the company of the future will involve only 5% “traditional employees” is coming to pass. It has just taken a bit longer than first predicted.

If this seems farfetched to you, just look around and you will see it happening in many industries today. The entertainment industry is perhaps the best example. The actors, the production people, the editors, the support staff all come together to get a job done. They don’t get their benefits from the company – they get it from unions, co-ops and guilds. The resources required to create a play or movie or TV show come together for that project because they can ply the work they love. When the project is over, they move on.

I see this as an exciting challenge for the future of HR. The entire infrastructure that supports HR will have to be adapted to this new employee economy. I am looking forward to being a part of that change.