All signs point to growth in the US contingent workforce. Buyers are bullish about expanding their use of contingent workers — something we have been seeing in the past decade for a variety of reasons.
This includes Staffing Industry Analysts’ latest Workforce Solutions Buyer Survey for the Americas region, which found buyers expect contingents to comprise 25% of their overall workforce in 10 years’ time.
Peter Reagan, senior director, contingent workforce strategies and research, discussed the future of the contingent workforce in a keynote speech last week at the CWS Summit North America conference in San Diego. He recently sat down with CWS 3.0’s Katherine Alvarez to further discuss the topic.
CWS 3.0: What are the main changes that you expect to see in the future for the contingent workforce?
Reagan: The fact of the matter is, I think we tend to maybe overestimate the short term for the next two years, but in the next 10 years, personally I think we are severely underestimating it.
I think that what we now know as “jobs” are going to get broken down far more into tasks where robotics, automation and artificial intelligence will automate so many of these tasks, and the human beings will be performing their value-added task in their piece. And I think that the transition from jobs to fulfilling tasks will fuel the gig economy, will fuel contingent work.
My view is that far more work that needs to get done is going to be suitable for gig workers, because organizations are going to need shorter periods of focused talent to perform smaller tasks. We’ve gone from jobs for life, through contracting, and I think we are going toward more entrepreneurial gig workers. I think that getting people into an office in 10 years’ time, 15 years’ time, will largely be a thing of the past.
And most importantly, I think the way that we see the future is tainted with our own impurities, our own experiences of how we grew up. But as I said in my keynote, the hardest thing to do is to answer these questions about the future, from the future. We’ve got technology that is just accelerating this exponential progression. It’s not going one, two, three, four, five, six; it’s going one, two, four, eight, 16, 32, 64, 128 and so on.
The people we talk to in our temporary worker survey say they want permanent work. They say that they are using contingent work as a bridge to get permanent work. However, the answer to that question depends not only on who you ask, but also when you ask them. Yes, you may have people today who are looking for permanent work, but I think that if you ask that question in 2030 or 2040, people would say contingent work. I think that there will still be corporate die-hards in 10 to 20 years’ time, but I think that they will be a falling breed.
California just passed Assembly Bill 5 for determining independent contractor compliance. Where do you think we are heading legislatively, and how is that going to play into the ability and the desire to work independently?
The thing is, and again I mentioned this in my keynote, what happens when technology basically outpaces legislation? We’re already seeing it. You talk about independent contractors, we’re already seeing this with the emergency IR35 legislation in the UK. Every government around the world is a business. It’s a profit and loss account, and they depend on taxes and social security contributions to pay the bills. When you get this influx and growth in the gig economy, they can depend on the big corporates to pay taxes and social securities for their employees, but this transition to gig workers — they are nervous about it. So I think we are going to see over the next few years some legislation that comes up on an emergency basis. We’ve seen it in GDPR for data protection, because there is so much data out there now; we’ve seen it in IR35 because of tax.
But legislation won’t keep pace and my personal view is that legislation won’t be able to stop it (the gig economy). So many of the barriers that we currently feel — including hesitation to use human cloud platforms because of intellectual property — it will be a thing of the past. I think that we are already seeing collaboration. You won’t be able to control intellectual property in the future. I think we’ll end up in a world that we’re all just sharing and there is no such thing as ownership of intellectual property. That will become, I think, an archaic idea.
How will intellectual property and technology intersect?
You see so much sharing. There are tons of fantastic crowdsourcing platforms. The reason I don’t think IP and technology is going to be that important going forward is because people at the moment in today’s world get consumed with the technology. It’s not about the technology. Don’t get caught up in the technology; it’s what the technology can do for you.
Whether you have got 10 fantastic crowdsourcing platforms — you’ve got great VMS systems out there, you’ve got great accounting systems out there — it’s the people that are going to make the difference.
And going forward?
At the moment we are relying on the technology to do so much of the work, but as human beings transition to do work that only humans can do, the technology is going to be nothing more than an enabler for humans to do more productive work that only humans can do. An that’s where I think the difference is going to be.
What can contingent workforce managers and the buyers of talent do to prepare?
Today, I think organizations need to look outside of the building. They need to be aware of all this technology because if they don’t keep up to speed with what’s going on in the world, their competitors will.
And they might not be the competitors you expect! We’ve gone from organizations to jobs, and organizations now are kind of transforming into platforms. Companies like Airbnb and Spotify and Uber and Deliveroo are platforms. These companies employ sometimes just 200, 300, 400 people. They are worth billions. They’ve never had an office. They don’t have offices they wouldn’t even think of having an office.
People need to be adaptable to change and be ready for change and be changing. It’s not the time for complacency. The future is not a single destination. There are multiple destinations and the future has never happened and it never will happen. But it’s not one place. You have got to decide and make a best guess. You are going to have to make some no-regrets decisions in your businesses, but you are also going to have to make some bets as well as to where your future lies. You are going to have to reassess that on an annual basis to be agile.
And it’s not all about where you want to be. As I mentioned in my keynote with a picture of Buzz Aldrin on the moon, your starting point is almost as important as your end destination. Not everyone is starting from the same place, so it’s maybe, “one small step for some, one giant leap for others.” Organizations must not only think about the future, but also about where they are going to start from.
Do you see them taking those steps and moving in that direction, or do you think they are being more complacent?
It is challenging and it’s a mix. Most companies out there, including the big ones, need to make money. Every single year they have to hit their P&L and budgets. They can’t just transition their business overnight. People are proceeding with caution, but I do believe that if you don’t invest in this change now, you are going to get left behind. What was a “wow factor” yesterday is a “must-have” today.
You have to proceed with caution. You’ve got to make bottom-line profitability. You need to plot your path and where you are. And if you fail, if you get it wrong, it’s not because of inaction. You made an effort.