The Future of Work
Uncategorized | Sep 10, 2020 | Gabelli School of Business
By Stevenson Swanson
A sleek, new website describes itself as a talent marketplace that matches contract workers with short-term assignments around the world, noting that it posts more than 400 positions daily. If that sounds like yet another example of the growth of the freelance gig economy, it is. But this is no seat-of-the-pants, start-up operation. It is a platform operated by EY, the global accounting and professional services giant.
Called GigNow, it was launched in late 2017 and has already built a network of some 30,000 professionals, thousands of whom have worked on assignments at EY that last for an average of six months. For a company that traces its roots back to 1903, has a global workforce of more than 270,000 people, and operates in a business typically seen as bound in tradition, GigNow testifies to the changing nature of work in the 21st century—an evolution that has rapidly accelerated as a result of the COVID-19 pandemic.
“The tasks they perform are as varied as our clients,” said Dan Black, the firm’s global recruiting leader, referring to its contract workers. “GigNow helps us fill needs that we didn’t know how to fill before. For one thing, a couple of our practices have busy seasons—classically, the tax business. We’re also using them a lot in initial opportunities when we’re ramping up and we need people who know a particular industry and can help us hit the ground running. It’s almost like a professional version of an internship.”
The Technology Influence
Digital platforms are transforming a wide array of industries. Some of the best known are names many of us are familiar with: Uber and Lyft in transportation, Airbnb in lodging, and UpWork for a variety of professional services, including web design, marketing, and accounting. More broadly, rapid technological change in areas such as robotics and artificial intelligence are combining with evolving global labor markets, shifting regulatory regimes, and demographic trends to forge the future of work.
These trends were the subject of the “Work 2040: Future of Work in a Sustainable World” conference held at Fordham’s Lincoln Center campus on March 5. Sponsored by PVH Corp. and EY, the conference is among a series of events celebrating the Gabelli School’s centennial year. Speakers from the private sector and Fordham faculty explored what companies, institutions of higher education, and policymakers are doing to prepare for the workplace of the future, with the goal of inspiring collective action that preserves respect for human rights and promotes dignity and well-being in a sustainable world.
Wanted: A Human Touch
One of the most fundamental questions about the future of work is whether there will be jobs left for humans after robots and artificial intelligence-powered technology come into their own. Relax, says Haig Nalbantian, senior partner and co-founder and co-leader of the Mercer Workforce Sciences Institute, which studies workforce issues and provides consulting services for a wide variety of large multinational corporations. The jobs will be there—but the skill sets needed for those jobs are changing.
“The big concern on the part of our clients in the throes of technological transformation is having the right mix of skills— not just the right technical skills, but critical-thinking and team-building skills, and other things we might call ‘soft skills’—to be effective,” said Nalbantian, who presented at the conference. “Employees need a broader range of capabilities. They need to react quickly. They need to work well with other people. The real concern is having those problem-solving skills.”
In a workplace where data analytics and artificial intelligence are constantly evolving, employees have to be more adaptable than ever, according to Black, who also spoke at the conference.
“Robots are not taking your jobs,” he said. “They are taking tasks. The job that an accountant does right now will be different five or ten years from now. But thank goodness, there will still be accountants. However, being flexible has never been more important. Being open to the fact that change is virtually inevitable prepares you mentally and psychologically that it is going to happen.”
Shifting Workforce Demographics
In studying demographic trends worldwide, Nalbantian has found that the workforce is aging as people work longer, motivated in part by the decline in pension plans and the need to save for a longer retirement as life expectancies increase.
Employers sometimes take a dim view of older workers, who are seen as less productive and less comfortable with new technologies, among other stigmas. That is not necessarily the case, however. Nalbantian questions some of the assumptions behind studies that show older workers are less productive.
More important, he and his colleagues have found positive results when older workers are part of a team. Groups with more older workers or with higher average ages are often more productive than groups with more younger workers. They have also found that younger workers are less likely to quit if they are part of a team with older employees.
“If you rely on the more conventional, individual gauges of performance, you’re going to come away with a concern that this aging workforce is a liability,” Nalbantian said. “The contribution of older workers shows up not only in their own work but in the outcomes of the group as a whole. There’s a spillover effect. The behavior of older workers has an effect on younger workers. Through the broader lens of the group or unit performance, older workers can be seen as an asset.”
Since March, employees and employers have had to swiftly adjust to new models of work to keep businesses running in the midst of the pandemic. Looking ahead longer term, flexibility will be a built-in requirement in every job description.
Creative Recruitment Strategies
Of course, even if the workforce of the future may be older, there will still be millions of young people in the millennial and Gen Z generations looking for work—whether it’s their first job or, with their reputation for job-hopping, eyeing a move from one employer to another. Recruiting and retention strategies are already adapting to find, hire, and keep these young and restless workers engaged on the job.
At EY, which will hire roughly 85,000 full-time employees globally this year, Black said the firm’s campus recruiting efforts have been successful in finding a much wider array of sources for talent. In addition to recruiting on campus at colleges and universities around the world, EY leverages online job boards and talent hubs, employee referrals, and student-centric employment apps. The vast majority of candidates participate in video interviews, which allows EY’s recruiters to get a sense of a wider swath of individuals early in the selection process.
Black questions whether millennials are more likely than earlier generations to flit from job to job. Rather, they might be more vocal about expressing dissatisfaction about their work assignment or prospects for advancement. To help counter that, Black advises taking a proactive approach and seeking out new challenges at work.
“A lot of companies are saying it’s increasingly incumbent on the employee to throw their hat in the ring and try something new,” he said. “When I speak to students, I tell them it really does take outreach and energy and focus on their part to make it happen. Did you really put in the time and effort to have a better and different experience? That’s even more important now, given the quickly changing nature of work.”
An Alternative to 9 to 5
Of course, one of the biggest factors driving workplace change is the growth of the gig economy as an alternative to the traditional model of full-time employment. Freelance and short-term contract work is nothing new, said Apostolos Filippas, Ph.D., an assistant professor at the Gabelli School who studies the peer-to-peer economy, which includes gig sites such as Uber and sharing sites such as Airbnb.
What has changed in the last decade or so is the technological capability to organize short-term work projects on a massive scale. Still, hard numbers about the size of the gig economy are notoriously elusive because there is no single definition of a gig job and the U.S. government tracks such work sporadically. In 2017, the Bureau of Labor Statistics reported that 5.9 million people were true gig workers. While that estimate includes those who make all of their income as independent contractors, it does not include everyone else who might have a full- or part-time job who makes a little extra money with an occasional “side hustle.”
Other studies paint a different picture. Intuit, the financial software firm, and Emergent Research, a consulting firm that focuses on small business, estimated in 2017 that freelancers of all descriptions made up about 34 percent of the U.S. workforce. Similarly, a 2018 study by Gallup, “Gig Economy and Alternative Work Arrangements,” concluded that 36 percent of U.S. workers, or 57 million Americans, have a gig work arrangement in some capacity.
For gig workers, perhaps the biggest attraction of their jobs is the flexibility to work when they want to. That makes it popular with people with full-time jobs who want to supplement their income or people who are caring for young children, aging parents, or other dependents. For younger workers or career-changers, freelancing is also a way to gain experience that could lead to a full-time job.
Yet the downsides of this unfettered way of working are considerable. For example, simply getting paid for one’s labor can be a challenge. A survey by the New York-based Freelancers Union found that 50 percent of respondents were either paid late or not at all. Even if payment is not an issue, the work comes with no benefits—no health care, no paid vacation or sick leave, no contributions to a retirement plan.
“Not knowing where your health care is coming from, or having benefits in general, imposes a great amount of stress,” said Filippas. “But even without benefits, we see how popular a lot of gig work is. That tells us there is tremendous value for people who really want to have this flexibility.”
The growth of the gig economy, however, has led some policymakers and labor advocates to call for the extension of economic and legal safeguards like unemployment benefits and protection against discrimination and harassment to freelance and contract laborers. So far, such safeguards are rare.
However, a new law went into effect at the beginning of 2020 in California that requires companies such as Uber and Lyft to treat many gig workers as employees, mandating that they be paid the minimum wage and receive other benefits such as workers’ compensation coverage. Critics say the law, Assembly Bill 5, is too broad and has led some companies to sever ties with freelancers. Several court challenges are pending, including one by Uber.
“It seems there are two extremes,” Filippas said. “If you’re employed, you get all the benefits, but if you’re a freelancer, you’re kind of being legally ripped off. Legislation has to intervene to solve some of that, but the changes in California’s law have made freelancing almost impossible.”
Despite such challenges, however, gig work is projected to keep growing. Considering the crash course employers and employees have had to take to transition their day-to-day work life during the pandemic, traditional, full-time employment will likely continue to look more like gig work. Now that a blueprint has been established and many COVID-19 guidelines remain in place, more employees will continue to work remotely, on flexible schedules for social distancing, and utilize technology to stay connected virtually. Long term, these new models for work will help improve work-life balance, a benefit for both employees and employers.
“Traditionally, companies have taken the attitude that work is work,” said EY’s Black. “I think more and more organizations are realizing that an employee who feels more fulfilled is a happier, more productive employee.”