The concept of “employee” first appeared at the end of the feudal era, initially as the daily agricultural labourer. It spread with the introduction of mass economy at the beginning of the 20th century, and it hasn’t stopped yet. New companies focusing on mass-production had to retain trustworthy and well-trained workers in order to run their factories efficiently. This model of the daily labourer caused management costs to skyrocket. Business owners found it necessary to manage Human Resources internally, in order to assure both economies of scale and increased productivity. So the transition was made to bulk, and long-term employees. The employment rate constantly increased throughout the 20th century: 63% in 1956, 85% in 1990, 91% in 2000 in France for instance.
Our entire system considers the employee status to be the default employment situation. As a result worker protection and social security have been constructed using this assumption: bank loans, property rentals, healthcare system, etc.
Freelancing is nothing new. Although they have always been present in the workforce, their numbers fell dramatically during the 20th century as department stores replaced sole traders, and agricultural jobs were destroyed. Self-employment has taken on new forms, certainly, but it is not, strictly speaking, replacing the employee. The most quoted figures (according to Intuit, 40% of the working American population will be freelancers in 2020) should be read with caution: they don’t mean that 40% of workers worldwide will be exclusively freelance. The majority of them will have several jobs at the same time, only one of which will be “employee” – the famous “slashers”!
So, if the employee is not disappearing and freelancers have always existed, what’s changed?
- The end of linear career paths. We no longer spend our entire career in the same company. The economic climate has forced workers to alternate periods of traditional employment, freelancing, unemployment, training, fixed-term contracts, etc.
- The relative weakening of large companies. This first point has a corollary. Big companies, even if they still contribute to 90% of the national GDP, are suffering due to competition with new types of work and novel possibilities offered by the digital age. They are also hampered by the bad image gained from their negative impact on environmental, social, and geopolitical issues. According to Venkatesh Rao, writer and researcher: “The sun is certainly setting on the Golden Age of corporations. It is time to […] contemplate a post-corporate future”.
- The rise of digital platforms. These platforms encourage the matching of supply and demand through easily-available, well-developed tools. Through the platform economy, labour is much more fluid, on-demand labour has risen, and labour costs are easily adjustable depending on the situational needs of the company. This also fosters a type of work liberated from the constraints of time zones and geography
- Blending of different worker statuses. Even though society still centres on employees, the lines have begun to blur. Instead of the disappearance of the full-time employee we are seeing a convergence between it and other employment categories, particularly in terms of social and economic security.
It is time to contemplate a
What are the effects on businesses and Human Resources?
The biggest challenge for Human Resources is engaging, motivating, and retaining these new, external workers who are not part of the traditional employee hierarchy. These freelancers don’t work for the company but rather with the company. In the end, the worker status doesn’t really matter. The important thing for the business is to be very aware of the movement behind the trends. These workers want to choose projects that interest them and that are connected to their own personal body of work, as evoked by Hannah Arendt.
- Become a casting agent. To motivate and retain mixed internal-external teams, HR will have to develop their skills as casting agents. But how can they ensure cohesion in this type of team? How do you find an individual with the skills required for this project? Pixar already uses this mixed model. Each new film is directed by a new team.
- Offer new methods of motivation. This also involves finding new forms of compensation, money being insufficient, in itself, to engage and motivate staff. For example, Dropbox organises “Whiskey Fridays” to connect colleagues and develop real team spirit.
- Re-orientate managerial thought. New positions are emerging in order to better manage this new way of looking at things. We now have the CFO (Chief Freelance Officer), FMS (Freelance Management System) and even CEO (Chief Ecosystem Officer). The most important thing is to encourage internal reflection to adapt to the evolving professional landscape.
- Tailor the experience. Freelancers will be happy to work with your organisation if they feel their role has been truly personalised for them. In a world where workers have their choice of interesting projects, it’s up to the enterprise to differentiate themselves from other employers through the experience they offer.
Between the two extremes of the employee-freelance spectrum, what is the right balance to get the best of both worlds?
According to Jeff Bezos, CEO of Amazon, “If you can’t feed a team with two pizzas, then the team is too big”. Working in small, ultra-autonomous teams is essential to combat the never-ending disruptions which are inherent to the digital age. The goal is to:
- Increase reaction time, minimise bureaucratic red tape, and facilitate the decision-making process.
- Show employees that they have a real impact in the organisation, a “sense of ownership” in the process
In this way, the example of Spotify can teach us a lot. The music streaming service’s R&D team is vertically divided into “squads” using Dunbar’s Number and managed like startups. These squads are dedicated to one function and are completely independent of one another. The R&D team is also split horizontally into “chapters” and “guilds”, arising from communities of common interest.
The challenge for these teams is to work together to ensure that each team’s context is truly understood by all the others.