Interview 11: Janice Simmons

Reading Time: 12 minutes

Janice Simmons is a business executive with Accenture.

Tim: Could you tell me a little bit about your background is in dealing with staffing temp or contingent work?

Janice: Throughout my career I’ve had opportunities to hire people in the contingent and temp workforces. As a consultant, sometimes we need to bring in additional people to help us on a temporary basis.

When I was an executive in industry, I did the same thing, whether it was bringing in consultants or contingency staff for a short period of time to help out on a particular project.

Tim: You’ve been doing this for a number of years. There’s a lot of talk right now that this contingent work thing is new. Is that your experience?

Janice: Not really. What is new is that more people are seeking this kind of work as their preferred way to be in the workforce. More people are taking the lead in saying “This is how I want my life to be. I want to be able to come in and out of work. I may want to be able to work for 10 months in a row and take 2 months off. This fits in with my goals and how I want to develop professionally.” More people are interested in contingent work and wanting to do it instead of saying, “I’m just going to do it for a little while until I find the permanent position.”

Tim: There’s a lot of discussion right now that says technology is destroying jobs. But the way you speak about this suggests people are choosing to go into this kind of work. Do you feel people are choosing this work for lifestyle reasons or being forced into contingent work arrangements?

Janice: I think it’s a combination of things. Some people may find themselves in that space because of changes in jobs or changes in a company. Some people who find themselves there don’t necessarily want to be there. But I think other people are choosing it. My perception based on my friends, colleagues and the folks I’m working with are more people are choosing it intentionally.

Technology is becoming more and more a part of how we get work done. I’m currently working with the hospitality industry quite a bit. We’re seeing more robots in hospitality every year. For example, Hilton has a new concierge that works alongside of a human concierge. The name of the robot is Connie the Concierge, and she works with humans. She can process information faster than a human being. And so having a robot working alongside of a human you get both the personal touch as well as the power of a computer that can analyzed vast amount of data more quickly than a person can to answer a guests question.

Pizza Hut has a robot that they’re trying out in Japan called Pepper. You order from the robot, it can answer all kinds of questions about the menu, nutritional information, etc. It is so cute that you want to interact with it. Your order is instantly placed and you pay the robot with your phone. It makes it fun for people to come in and to interact with a robot.

I’m actually pretty optimistic that what we’re going to see with technology is some of the more mundane tasks that people can master quickly and don’t want to do will be done by machines. And new jobs will be created that are more focused around making great decisions and working with people and inspiring people to do new things. I think as robots become more and more a part of businesses, you’re going to have to have people who can care for those robots, who maintain those robots. Machines can continue to do stuff that is dangerous for people to do or do tasks that are mundane for people. This will open up new work that is more interesting. It’s going to create different kinds of jobs for us.

Tim: What is unexpected or surprising about the current discussion around contingent work?

Janice: One of the things that will have to change is the way companies engage in the gig economy. A lot of really big companies that I’ve either worked for or worked with have some very cumbersome processes in place to be able to bring in gig economy workers. If there’s somebody I want to bring in to do a certain piece of work for a certain period of time, there are many, many hoops to jump through, often in procurement and legal processes.
So one of the things I think people are finding as they’re trying to become consultants is a lot of big companies have very difficult, complicated processes for approving contractors.

I believe companies are going to have to streamline their processes if they want to be able to use more flexible external resources. They will need to become more agile, more nimble.

Tim: How do the people you have worked with handle the volatility of contingent or project-based work?

Janice: The individuals I know who do this well are really good at planning and budgeting. They know the basics of how much money they need to live and cover their bills, and they have a great marketing plan for their services. What I found is people who tend to be very successful are quite networked with other entrepreneurs and other people who do this kind of work. So that if one finds an opportunity that is bigger than their own capacity, they can bring somebody else in.

Successful independents have a number of different ways that they are making money. They might have something like an Uber on the side of their main business, and then they have an iron in the fire to develop in another area. To be successful in this space you have to be very entrepreneurial, look to expand your network, and know how to creatively use the tools available to you.

Tim: How should workers be thinking about work differently? How should they be thinking about the jobs they take on?

Janice: My suggestion is that people need to think about it in a number of different ways. Most people want to use their skill set because they’ve built up capabilities and want to to use those capabilities to do great work. But they need to get creative about how they can apply those skills today. They also need to think about where they want to be two or three years from now in terms of capability and in terms of happiness. And then they need to look for areas that are going to become hot. Maybe it’s is getting deeper in their current field are or maybe it’s broadening their capabilities.

I think every individual has to say to themselves, “What am I great at today? How can I make a great impact, build my reputation, and build my brand? And what should be next for me in two or three years?” I don’t care if people are permanently employed in a company or doing gig work, these are the questions that everyone should be asking because work is changing so quickly.

I think in the next five to ten years we’ll see massive changes in work, how work is done, and who’s doing work. New jobs will be created. We all need to be thinking not only what we are great at today, but what do we need to be great at two or three years from now. And we need to seek out assignments and projects that will give us those capabilities.

Tim: What skills do you think people need to have to be successful today?

Janice: One skill is being able to build trust very quickly by being transparent. I call it being radically transparent by sharing your process, how you work, how we work together, and sharing all that up upfront. If you’re good at building trust and being very transparent about how you want to work, how things will get done, you get clarity with your clients very quickly, get shared understanding, and are able to move very fast. These things that are important to me when I look for folks to bring on my team.

The ability to move fast, to be agile, is very important. The quicker you are, the better able you will be to take advantage of opportunities that come up. That’s incredibly important. It’s networking, and it’s keeping your eye on what’s coming next so you can learn about it and take advantage of it.

Tim: How should businesses be thinking about and working with talent differently?

Janice: I work for Accenture and what we’re working with a lot of clients on right now is exactly this question: How do we think about work and workers differently? As a company, I need to start thinking about work in chunks. If I’ve got an important chunk of work that can be done, or needs to be done by somebody from the outside, how do I package or chunk the work and then find the best possible people to do this work in my external network. Businesses already have to work hard to find the right talent to bring in.

There are going to be more what I would call “talent broker” kinds of positions inside of companies or in external companies that can link a bigger organization with talent from different sources. If I were a large company, I’d be thinking about how do I get connected to talent brokers who can bring in talent for specific projects. And that talent broker could be a website. It doesn’t necessarily have to be a person. It could be an exchange site where I can go and say, “I have this work to do. Who can do it for me?”

The other thing that is interesting for companies to think about is what we’re calling the “liquid workforce.” These are people who want to come into the workforce maybe for two or three months to do a project, and then they want to maybe do something else for two or three months with another organization. Or maybe they want to work for six months and then they want three months off, and then they want to come back in and work for six months. It becomes this flexing in and out of projects and roles. Companies are going to have to be able to manage that flexing and give people more choices in scheduling. I’m working with a hospitality and entertainment client right now where they schedule resources for months at a time. They’re thinking about to attract people to work the time slots that aren’t the most attractive. They are asking lots of questions. Can they let people bid on when they want to work? Can they offer premiums for doing some of the jobs that are less desirable jobs or the jobs that are at less desirable times of the day? Maybe people can earn additional money or additional benefits. They’re playing with how to use this liquid workforce and people’s desire to come in and out of work, and their need to make certain jobs attractive for people. They are only thinking about permanent positions.

Every company needs to think through how are they going to set it up so that we are bringing in the best of the best. Every company needs to consider how well networked they are. Whether or not they are chunking the work in ways is attractive to people.

Many companies go out and give work to the lowest bidder. So they may be able to find high quality work done by the lowest bidder. But some tasks may be different. Companies may have to offer a little more incentive for people. Companies need to know the work, know the workforce that’s out there, and know what has to be done in order to attract the right kinds of people.

We just finished Accenture strategy graduate research study where we went out and for the last two or three year interviewing recent college grads in the US. One of the things that they’re consistently telling us over the last couple of years is most people don’t want to work for large companies. In fact, only one out of seven in our study said they wanted to work for a large organization. If you are a large company, how are you going to make your organization or your work attractive to these recent grads? How are you going to make it attractive for them to work in your company when they’re more inclined to want to work for smaller companies where they feel they are able to learn quickly, work on more interesting tasks, and rise through the ranks?

Tim: Where are companies on the learning curve? Do you think companies are in a position where they’re ready to make these changes, or are they still very much in a learning phase?

Janice: I was just talking to some colleagues about this question a couple of weeks ago and we came up with companies in two big buckets. Some of the more traditional companies that have been around for a long time are really having to pivot to this new way of thinking about work, the gig economy, and workers. They realize what’s going on and they’re working hard to pivot to the new. And it’s not always easy when systems, and processes, and mindsets are set-up for a different way of working.

And then there are folks who are actually creating the next new way of working. This is the “Uberization” of work that emphasizes flexibility of what work, how much work, and when work is done.

There are a lot of very well-established brands and companies who are working very hard to pivot to the new. And then there are lots of leading edge companies who are creating whatever the next new is going to be and taking it direct to the people.

Tim: What sort of system changes do we need? What do you think we need to be internalizing as a society as the nature of work changes?

Janice: That’s a great question. One thing I think is terrific is people will have new opportunities to use their skills and capabilities. That’s very positive for people because we all want to use our unique skills and capabilities. We need to be ready to embrace and support those new opportunities.

As an independent, whether you’re an entrepreneur or a small company, you do need to think about healthcare. Maybe we’ve made some strides in that direction already with the Affordable Care Act, time will tell. And I think we need to make it easier for people to access opportunities for themselves. We need to make it very obvious to folks where the work is and help people get connected. Those are the two main things I’m thinking of today. There are probably deeper questions than I probably have thought about right now.

Tim: I appreciate your perspective on the importance of accessing new work opportunities. I’m from rural Wisconsin where folks tend to be farmers, in the skilled trades, or have a very small business. Their skill sets are incredibly entrepreneurial, yet there is often this pressure to leave the work that created these entrepreneurial-minded people in order to get a college degree and a white-collar job. Meanwhile a lot of people in business ecosystems are saying they really need entrepreneurial people. That seems like a missed opportunity. Similarly, I do some work with marginalized communities in Milwaukee, and a lot of these folks are also very, very entrepreneurial. Yet there is this push towards acquisition of jobs that in a lot of ways just aren’t there.

How do we make a system that recognizes and values these entrepreneurial skills for what they are and connects them with work?

Janice: I do think there’s needs to be a collaboration. How do we make it really easy for both the companies and the people to find each other and connect? That’s going to be critical because there are opportunities out there.

For a lot of people that I know who think about stepping into the gig economy, their biggest question is how to find work. Especially if they have specialized skills or if they want to broaden develop new skills. We all need a fair amount of certainty and stability in ours life. For some people it’s a lot more than others. But how can people get into the network and consistent get opportunities? I think is one of the critical things we have to continue to solve for. And I think it’s happening. Creative people are finding creative ways to connect people. And I think that will continue to happen. It’s interesting.

The other thing I found is people questioning is what they really need in terms of education and learning. Is college the best path to success that we make it out to be? There are wonderful opportunities out there for folks without degrees, such as service technicians in auto dealerships. These are amazing high paying jobs where they use computers all the time. They are troubleshooters. They solve problems. It’s not always getting dirty and spending your life under a car. Cars are so much more sophisticated. Those jobs have changed significantly. There are lots of options for people with varying specialties and education.

Do I need a four year degree? Do I need to go to graduate school? It depends on what I want to do. I can make a great living in a lot of different ways. What’s going to make me happy and what’s going to be able to give me the life that I want? How can I keep learning and growing? These are important things to be thinking about as well.

Tim: I think you just identified that one of the potential systems changes is a change in perception of education and understanding how it’s important and when it’s important. A 4-year degree is great, but the real takeaway for me was learning how I learn.

Janice: Learning how you learn best is critical. When you know that about yourself, you are able to handle new situations that you may not be familiar with. Some companies are really great and they’ll give you tons of interesting learning opportunities that help and support development. Some companies don’t do that so much anymore. So I think you’ll find more people taking classes on their own and teaching themselves new skills.

Tim: Last question for you. What core challenges, and/or opportunities in this world of work are you focused on or do you find most exciting?

Janice: What I find most exciting are the opportunities people are going to have in this new world. There are going to be new jobs created, and these jobs are going to be really interesting. Being able to leverage and work side by side with machines—the human-machine interaction—can make the human part of our work much more exciting. People will also have new opportunities as we think about the liquid workforce and working in chunks on a project-basis. There’s going to be a lot of opportunities for people to broaden their skills, to deepen their skills, to do more rich and meaningful work.

Tim: Great. That’s everything. I really appreciate you taking the time for this interview.

Interview 4: David Rolf

Reading Time: 15 minutes

David Rolf currently serves as president of the Seattle-based Local 775 of the Service Employees International Union.

Tim: What’s your background in dealing with workers? I know it’s quite extensive. 

David: I have been an organized labor leader for 24 years.

Tim: How have things changed in those 24 years?

David: I talk frequently about how a lot of us were organizing essentially contingent workers, like janitors and home care workers, people who were, either through subcontract or through misclassification, or through creative legal categorization, not full scope employees of their true upstream payer. People who organized with Justice for Janitors or in Comcare viewed those efforts as part of a long-term effort to make those jobs into “real jobs.” What happened in those couple of decades is that real jobs became more like Comcare jobs and more like contracted janitor jobs. Through a variety of mechanisms, many of them having nothing to do with technology, work became less predictable, less secure, more poorly compensated, less benefited, etc. Those are long-term trends that date more to the origin of the transistor than to the origin of the smartphone.

Tim: Is it difficult to organize contingent workers? These are not traditional full-time factory jobs where labor has typically been organized. 

David: For one thing, most of them are not covered by the National Labor Relations Act, which means that state and local laws can innovate and not be preempted. It was kind of the trifecta of federal labor law exclusion. They were publicly reimbursed independent contractors working in a domestic environment. So three out of the five exclusions from the Act apply to a lot of the people in that workforce. But we were able to design state and local laws to facilitate something very much like old school collective bargaining. All the Teamsters are now trying it here in Seattle with ride share drivers, which because they are independent contractors are excluded from the National Labor Relations Act. In retrospect, I worry we didn’t get creative enough when we had our moment, and we could’ve actually built a better labor law. Instead we copied all the elements of the ones we didn’t like that much to begin with because it’s what we knew. 

Tim: There’s a big debate right now about whether jobs are being destroyed or jobs are being created. What’s your take on this?

David: We don’t know yet. The Labor Department’s finally getting funded to do a comprehensive survey of the space. The last time they did one might as well have been the Stone Age considering changes in technology and the maturity of the workforce. I think there’s essentially three credible hypotheses here.

One is that nothing’s actually happening. This is much ado about nothing and the majority of the growth in contingent work is people adding small income streams to their otherwise full-time or significant part-time employment. When I get into an UberX and I ask the woman driving me across town for an appointment what she does. She says, “I just got off shift at the hospital where I’m a medical social worker, and that’s my job. But my boyfriend is spending a year on sabbatical abroad and I’m saving up for a big international trip to go visit him. So I’m trying to get as much extra pocket money as possible.” That’s one hypothesis. It’s funny listening to the rhetoric of the platform themselves. Before they hit the challenges of misclassification in labor law coverage, they were insisting that they were changing the fundamental nature of work. And now they’re all pulling statistics showing that the supermajority of the people working on their platforms are doing it for a small number of hours a week primarily as extra income. That’s one hypothesis.

Another hypothesis is that the technology and the ability to profit from that technology for both providers and platforms is the next evolution of something that used to live on bulletin boards, subsequently lived on the Craigslist and Angie’s List, and now lives on these on-demand apps. That it’s not really replacing traditional jobs. It’s the stuff people always have done but in a more efficient way of matching the consumer need with the provider availability. I’ve always been able to hire a dog walker, but what used to be true is that if it was the middle of the day and I realized I wasn’t going to be able to get home to walk my dog, unless I have a regular dog walker I was SOL. Now I go to an app and a dog walker shows up, walks my dog, and the app sends me a report on how long they walked, how many minutes, how many miles, what happened, and verify that they locked up my place, and it’s all done through some magical thing on my phone. Arguably that’s not new work, it’s just a different way of distributing work in a way that is more efficient and that companies can charge a premium for. 

And then the third hypothesis is this is a new way of working that is not suddenly being imposed on everybody but over time has grown significantly and is starting to replace traditional jobs both as a strategy for companies to get the work done and for workers to earn their income. I looked at this in my book and there’s surveys, there’s interpretations or extrapolations from data, but there just hasn’t been a really unbiased, comprehensive study of the contingent worker economy and its employment effects to date that can answer these questions definitively.

Tim: What parts of this discussion around contingent work, on-demand work gig work, etc. do you think is surprising and overlooked? What are we not recognizing?

David: If we look at the era in which we were assigning responsibility for what in many countries is called the the social contract to the employment relationship, the signal moment was 1950. This is when the Big Three automakers settled the contracts with the United Auto Workers that assigned health care, pension, and cost of living adjustment responsibility to the employer. Later they would even add more in terms of retiree health and legal service benefits. But what we did in America that was somewhat unusual was we privatized the social contract through the employment relationship. And that of course makes it much more expensive to be an employer and creates equally powerful incentives for people to not be an employer. 

So four years after the Treaty of Detroit, when the transistor was only seven years old and there were no smartphones, a really smart entrepreneur, a blender salesman name Ray Kroc bought the marketing rights from his largest customer and essentially imported a relatively obscure business model from the sewing machine industry called franchising. This model allowed him to centralize all the profits and decentralize all the risk. So you had workers making poverty wages without benefits. Their “employers” were small business people who would sink their nest egg into a McDonald’s franchise. If these employers did well they were able to maintain an upper middle class lifestyle, but without the ability to compensate their employees well and with the obligation to ship about 20% of the proceeds out the door to the corporate center. And the corporate center simply had to control the marketing rights and a bunch of other things like worker’s compensation, insurance, and ownership of the supply chains, and most significantly the real estate in order to create a multi-sourced profit center where they never actually had to serve any food to anybody. All they had to do is control a bunch of legal rights over property, marketing, and supply chains and then they would collect all the money. It was brilliant from a business strategy perspective, but it depended in large measure on not having to pay the social contract costs that had been assigned to heavy industry and government in that point in our history.

That’s one thing I think people are overlooking. That the reaction to the Treaty of Detroit only took a few years. And by the 60s we had Kelly Girl which advertised that she will never slip a disk, never have a toothache, never have a migraine, at least not on your dime. This flexible, on-demand worker thing really has been with us for awhile. It was partly a way of luring people into the workforce for supplemental income, not career income, just like today’s on-demand economy. And then we saw the beginning of outsourcing and offshoring in the 70s and the use of subcontracting in the 80s. It was not the smartphone that gave us this desire by capital to escape the costs of being an employer. In everything from the way state governments design their home care programs to the way that the airline industry has moved into a subcontracted ecosystem after the Airline Deregulation Act, to Kelly Girl, to McDonald’s, you can see these examples of the workplace fissuring going back decades. I think people do forget about that. Uber is like more a signal that people are reacting to than it is necessarily the beginning of this. 

The other thing I would just add, it’s corollary of all this, is people are now in this debate about do we need a third classification.

Tim: Yes, that’s a question I have. That seems like a bad idea.

David: It’s a terrible idea. Some very smart people are advancing this idea, and I think some of them quite naively, because it really looks like a full time employment act for employment lawyers. Because it’s already confusing enough for a lot of people to understand the difference between independent contractor and full scope employee, how much more confusing would it be if you had introduced a third classification with its own 20-item checklist of what makes that up. It seems to me that a more elegant solution might be to move away from multiple classifications altogether and to simply assign to every employer five responsibilities. Wages over $15 an hour, prorated down to the second if need be, workplace non-discrimination, safe workplaces, fair and humane scheduling, and a payment into a benefit fund that the worker owes. How silly is the health care mandate in ObamaCare that is not calculated as a percentage of payroll? It was done as a binary “yes” or “no,” depending on the number of hours you work a week. This predictably encouraged every retail and fast-food chain to do a hard cap of 29.7 hours a week for their employees to guarantee there would never be a need to pay the several hundred dollars extra in employer premiums. 

It seems like you could design a much more elegant system that begins to decouple the social contract with the employment contract. Maintain the money in the system, but instead of having every employer responsible for a health plan, a retirement plan, and all kinds of compliance with state and federal insurance funds, just outsource that. Let a worker organization handle that and start to disincentivize misclassification, which is really what the current system incentivizes.

Tim: How would you advise businesses to think about this? What positive role can businesses play?

David: First of all, if your business depends on substantial misclassification in order to be profitable then you don’t need to be in business. We have a set of laws. If you can’t figure out how to conduct yourself according to the law and still succeed then you’re in the same category as a butcher who can’t afford to refrigerate. No one wants to buy the meat from that butcher and the public health regulators will shut them down. It may cost us a couple jobs along the line, but in the grand scheme of things we shouldn’t be shy about enforcing the law. And if the laws need to change then we can figure that out. But it’s interesting to me that Instacart reclassified a significant number of their people as W2 employees because they figured out that no one will use Instacart a second time if they get crappy avocados. The problem is if an employer wants to dictate quality, it involves a level of control of the workplace that only comes from employee status. So Instacart re-classed all of their previous 1099s as W2s so they could actually train them and fire them if they failed to meet quality standards.

This same process has already happened with all of the major homecare apps. The majority of them started out as 1099s. But homecare is an industry where quality matters. Because if you’re a thousand miles away from mom and dad and someone’s supposed to be toileting them, bathing them, transferring them, and helping them keep their checkbook, you actually care about whether that person is trustworthy. And so all of the homecare apps went to a W2 model employment so they could guarantee quality. 

In my book, when largely channeling and quoting the work of Zeynep Ton at MIT, I talk a lot about how some businesses adopt high wage models in low wage industries and still win. Costco vs. Walmart, QuikTrip vs. 7-Eleven, In-N-Out Burger vs. McDonald’s, Cooperative Home Care Associates vs. the rest of the industry in New York. Southwest vs. other airlines. You can find plenty of examples of businesses that succeed on a high wage model even in a low wage industry. And so the other thing out there, if you are Uber or you’re Lyft, in addition to your misclassification challenges, why not just build a business model from Day 1 doing the right thing?

I was talking to woman who owns a farm in California Central Valley. She said, “We pay $15 an hour already. It’s just always been our philosophy that we pay our people decently. And if we can’t pay them $15 we shouldn’t be in business.” This becomes interesting when reflecting on the on-demand economy. It may turn out that a high wage model doesn’t actually work for all of the on-demand economy. Let’s say venture capital expects double digit returns and the consumer base is only willing to pay $50 for two hours of housecleaning. By the time you do the math of a $15 minimum wage plus a few bucks for benefits, times a couple of hours, plus overhead for technology and operations staff, you may find it impossible to deliver on the double digit rate of return. It may be that that house cleaning sector doesn’t belong on our smartphones. Maybe it belongs back on Craigslist or back on the bulletin board. And if higher labor costs dictate a lower return on investment, that’s actually not a problem for anybody in the world except venture capitalists. Houses have been cleaned for hundreds of years before they  showed up and tried to figure out a way to monetize it on an app.

Tim: Do you know anyone who’s doing cooperatively or worker-owned apps?

David: There are a few examples of this, but there’s an antitrust law problem. You can do it with taxi cabs. In Seattle the taxicab companies have an app. The reason they can do it is because the prices in that sector are already publicly regulated. But let’s say you had a group of house cleaners and they said, “Let’s cut out the middleman. Let’s cut out Handy or TaskRabbit and let’s collaboratively set our prices. We’ll pay just a couple of percent off the top to maintain the technology, but instead of 15% going out the door to our investors, we are going to actually harvest that as savings for the customer and as more money in the workers’ pocket. It’s a rational proposition, but because independent contractors are considered business people, under the 1912 Sherman Antitrust Act, their collaboration around prices is considered an illegal conspiracy and restraint of trade.

Tim: It’s a monopoly.

David: Yes, or cartel is probably more accurate. So the house cleaners in Seattle can have a venture capitalist hire a technologist to run an app, and that person can set the price because they’re just distributing work on the platform, but when the workers themselves collaborate on price they’re breaking the law if they’re in the 1099 sector. And that’s the problem of with why you can’t cut out the middle man. It’s actually not a technological problem. The technology was developed by Microsoft Research, it already exists. It’s not a tech problem, it’s a legal problem.

Tim: How should workers be thinking differently about the world of work today?

David: Let me speak to a group of workers that I think matters the most in all of this which is low wage workers. I think high wage workers will be fine. Internet software engineers will be fine, lawyers and doctors will be fine. They will figure it out even if a bunch of things are going to have to change. I think low wage workers have got to stop trusting that their employers and their elected officials are going to have their backs because clearly they are not. What we’ve seen is 40 years of wages in decline for the bottom 50% of income earners. Half of Americans now make less than $17 an hour, 43% less than $15 an hour, 25% less than $10 an hour. We’ve seen a cost shift away from employers and governments towards consumers on both health and retirement costs. The most important thing workers can do is resist these forces and do things like the fast food workers have done and start going on strike, start forming new organizations, and demand what may seem to be impossible. When the first group of workers walked off the job for $15 in Brooklyn in 2012, that seemed like a laughable demand, but now it’s the new normal with 18 million American workers getting a substantial pay increase off of the dominoes that began to fall in SeaTac and Seattle in 2013 and 2014. I think the most important thing that workers can do is be demanding and to form organizations. 

Tim: And not necessarily unions?

David: Unions are so inaccessible. Imagine if in order to practice the right of free speech or freedom of worship you had to first get a majority of your neighbors to sign a petition calling for it to happen. And then you have to have the government come in and conduct an election. And let’s imagine that the people of the next neighborhood over disagree with you. They could run a campaign to stop your neighbors from voting to give you free speech and they could go to court to file all kinds of motions to delay the election. Free speech would be a meaningless right. That doesn’t make any sense. If something is right it can’t be optional. But we’ve built collective bargaining as this optional right, and that’s a pretty useless system in the 21st Century. There are a handful of industries and geographies that are still relatively accessible for union organizing. But in general I think people should be demanding both local and state-level legal innovations around different models, or just building organizations independent of state actors and making demands on capital and business.

Tim: What skills right now do you think are really critically important for workers to have? There’s a lot of emphasis on STEM such as science, technology, and…

David: That’s nonsense. Look at what jobs the economy is producing: drivers, home care aides, child care aides, retail clerks, heavy laborers, movers. Even in Higher Ed faculty, the majority of jobs are now low wage jobs. People get their PhD’s then become adjuncts for years and years and years and have to teach nine courses to put together a salary of $32,000 a year. It’s certainly true that if you got aptitude in math and science that becoming an engineer or a research scientist is going to be more remunerative than say becoming a math teacher in a high school. But the problem in the economy writ large is not that we’re under producing college graduates. We’re actually over producing college graduates for the number of jobs that require a college education. There may be some labor market inefficiencies and skills mismatches in as much as we overproduce lawyers, but under produce engineers. But the purported skills gap is largely another money grab by the tech sector to convince a government, to whom it does not pay any taxes, to train its future employees so they don’t have to pay money to do it. That’s some silliness. The jobs the economy is actually producing are low wage jobs. The only way to change that is to make them into high wage jobs. God didn’t make an automobile worker a high wage job, humans did that. And we could do the same thing with baristas today if we wanted to. It’s just a choice.

Tim: What should we really be focusing on as a society? The fight for 15 is obviously one of your focal points. But in our conversation you’ve made it clear it is not about Uber…

David: The on-demand economy stuff is important because it’s new and it becomes a way of talking about this stuff. I’d rather get the on-demand economy organized now when it’s small and young than to wait until it becomes the next Wal-Mart and it’s unorganizable. I don’t think the on-demand economy is irrelevant by any means. There’s a lot we don’t know yet. We can’t really predict whether in 10 years this is going to be how everybody works or this going to be a fad the same way we now remember floppy disks.

Tim: So that’s one thing to focus on: organizing the on-demand space. But in the contingent worker space as a whole, what do you feel are the core issues that we should be looking at?

David: Here’s my overall hypothesis. We need to rewire all of our public policies in order to solve for the creation of a large, stable, accessible, and growing middle class. I don’t think this is that mysterious. Workers need organizations that are powerful, scalable, and sustainable. Our trade policy needs to align towards the creation of good jobs here. Our monetary policy needs to actually aim for full employment as much as it aims for low inflation. Our criminal justice policy has to focus on re-entry and re-employment. Our immigration policy has to focus on allowing people to actually bargain for better jobs with new employers, which means having full legal rights. We need to rewrite the rules of power so they work for everyday Americans. This is not that mysterious. How to get the power to do it is hard. There’s no reason we have to be transferring the costs of higher education, healthcare, and retirement onto individual consumers who increasingly can’t pay. There’s no reason that any of this has to happen. It’s just a reflection of who has power.

Tim: To summarize that, you’re talking about a systems-wide rethinking of the social infrastructure that solves for a strong middle class.

David: Yes, that’s exactly right. We used to have the largest middle class in the world, now we have the 27th largest middle class. Germany pays its automobile workers two times what ours can make and they make twice as many cars. It’s simply not true that globalization and technology require low wages and instability, and it’s not true that we bankrupted ourselves through overspending on social programs. This is misinformation that is designed to intimidate workers into being happy with what they have. It’s in the political and economic interest of some people to make us believe that becoming a low wage nation is inevitable. It’s hardly inevitable. Being a low wage country is a choice and we should make it different.

Tim: Thank you so much for your time.

Interview 3: Terry Westfahl

Reading Time: 7 minutes

Terry Westfahl is the Vice President of Human Resources at Graef.

Tim: What’s your background in dealing with and what’s your role? What do you do?

Terry: I have been in human resources for 30 years. I’ve worked in a number of different industries, but in the

last 15 years I have been, primarily engineering and architectural areas. I work with employees from a standpoint of finding them, courting them, bringing them on board, and then maintaining, developing, and having a relationship with them. And during that time I have to make sure that we are all on the same page.

Tim: There’s a lot of debate right now that technology is destroying jobs. Some folks are saying that we’re going to see emergence of new kinds of jobs. What’s your opinion on that? In the engineering space, are more jobs being created?

Terry: I think that in the long run technology is helping us be smarter and will make us more able to work on compelling problems versus the churning, day-to-day problems. I think in this millennia is going to be about complex problems such as how do we make sure there is good drinking water and how infrastructure is going to be maintained—those kinds of things instead of the more mundane things that employees have been dealing with in the past.

Tim: Do you think in the engineering and architectural space the very mathematical, very logical jobs are going to be automated or has that already happened?

Terry: I think that the different CAD programs have taken a lot of the design work out of something that we used to spend a lot of time on. In each decade I have seen another layer of tools that doesn’t require as much human work, but at some point I don’t think it’s always going to be the case. At some point we alway need the higher intellect of the human brain.

Tim: What skills do you see is being the resilient ones, the ones that are going to move forward that you’re looking for assuming math, science, all that’s there.

Terry: Creativity, problem solving outside of the box, collaboration, and foresight. You normally don’t think of engineers as creative individuals. But in the complex world, the people that can solve problems in creative way are the ones that are going to be the differentiators.

Tim: Work is evolving. You’ve been in the human resources space for a while so you’ve got a perspective on this. There’s a lot discussion about how do we handle this contingent workforce, but companies have been handling it for a long time in various ways. Is the hype around it warranted? Is there a sea change happening now? Or is this something that’s been in the mix for a long time?

Terry: I think that it has been in the mix for a long time. I think what scares people is that there is this new way of thinking about it that is more expansive than it has been in the past. Nnow the conversation around this is the new normal. We could have up to 50%, 60%, 70% of our employees that are contingent workers and that’s scary. But when you think about the pros that come along with that it really becomes more exciting because skill sets are going to need to change as a manager. The people that you’re going to be employing are going to be more creative, better at problem solving, and more collaborative rather than this employee who doesn’t get along with that employee because they’re so stressed out because they’re doing stuff they don’t like to do. So many people come into work because they have to. In this new space it feels as though people are designing their work-life with more intention. There’s an element of excitement from an HR perspective that you get to help create this work-life that’s exciting and passionate for employee versus trying to engage them, retain them, and motivate them. I think engagement, retention, and motivation will begin to come naturally out of this new way of thinking about contingent workers.

Tim: I really like what you said about helping design employees’ work life-with them. That’s a compelling thought that  as someone in HR, you role is to help workers design their work-life. What’s has struck you recently that has you thinking, “I need to start paying attention to contingent work and the way that work is changing.”?

Terry: We always talk about the challenge of finding enough engineers for the future, and the future is getting closer and closer. The baby boomers are going to be retiring more and more rapidly, and millennials are coming in, and they need something different than what we’ve offered in the past. There’s no ignoring it anymore. There’s no putting our head in the sand anymore. We have to do something or we won’t survive. I want to be a survivor, a thriver, and I think those that push their worry about this to next year are going to be left behind.

Tim: You’re starting to prepare for the change in work and trying to integrate it into the business side.

Terry: Right. If we wait and start worrying about the problem when we no longer have the engineers it’s already too late. We have to look at all the possible pipelines, and contingent work is going to be a big pipeline.

Tim: How do workers need to think about this differently? You working in an engineering company. Being an engineer is a good job. What should workers be doing to make themselves attractive over the long-term? Whether they are contingent or employed, how should they be thinking differently?

Terry: I always go back to collaboration. That is really a skill set that I think is going to determine whether or not you’re someone that the employer leans on or if you’re someone that we have to develop. The ability to collaborate, listen to others, figure out how to make the solution work is really important. The basic things like math skills, the reading skills are definitely important too, but the ability to collaborate is really where I think employees and people who are graduating need to focus. We all want to do it our way, but in this global world that we’re living in, collaboration is the biggest skill.

Tim: This is interesting considering the major attention being given to STEM with the emphasis on science, technology, engineering, and math. Yet we’ve talked a lot about about creativity, problem-solving,  and collaboration. In certain ways, this is a liberal arts emphasis that is emerging.

Terry: Right. And when you look at who is getting promoted up through the ranks, they’re technically sound, but they are also the ones that are able to bring people together and solve problems. They can collaborate and are creative. I never really put those two things together, but you’re right in that it’s a liberal arts kind of skill set. These skills are often considered to be the soft skills, but they are really hard in that they are measurable, they increase productivity, and they reduce cost. These skills are as hard as they get.

Tim: How should businesses be thinking about talent differently?

Terry: Businesses need to put themselves in the world of talent. We’re not the prize anymore. We need talent,, and in order to have a good partnership we need to be putting what they need on at least the same level as what the business needs. Because without talent there is no product or service to give to clients. We’ve gotten very comfortable with saying, “What are you bringing to the table?” We need to be saying, “We’re in this together. Let’s figure out how we both can win.” There is so much area for both parties to get exactly what is wanted.

Tim: In order for this shift in work to be positive, what systemic changes do we need?

Terry: Compliance is huge. With the way that we’re going, we need to reconsider how to categorize employees so that they can move seamlessly between outside the employer world and inside the employer world. Right now employers are afraid to use independent contractors because of the way the regulations are set-up. The IRS is adding agents for this purpose and they’re making it more difficult to categorize someone as an independent contractor. In the event that they are misclassified, there are tax implications, there are fee and penalty consequences, and there are benefit consequences. It’s just easier to stay in the traditional employee-employer relationship. If the compliance piece isn’t dealt with, we’re going to have an uphill battle. But I think that there’s this force around the discussion today that is not going away. It’s going to eventually be resolved, but there needs to be more focus on how to resolve the compliance issue sooner. Because as an industry, let alone as a country, we’ve got to have things in place that allow us to be quicker, faster, better, and worrying about all these regulations that result in whether or not a person is an independent contractor or employee is not helping anybody.

Tim: I just have two more questions. What are your top two or three big challenges that you are trying to figure out from the business side as it concerns this shift in work?

Terry: Talent, talent, talent. It is our top three problems. That’s something that I think all industries are dealing with. HR people are not sleeping at night because of concerns around bringing talent in, keeping talent, developing talent. That’s huge. And then the next level becomes the cost of the talent; health insurance cost is astronomical. Those would be the two main ones, but the three at the top are all talent.

Tim: What do you think is the big opportunity right now for companies and workers?

Terry: I think this is a really exciting time. There are so many opportunities to rethink all the things that have bugged us in the past. We’ve all wanted flexibility in the past. We’ve all wanted to spend more time with our children. We’ve all wanted to feel like I’m 100% when I am at home and I’m 100% when I’m at work. And yet we haven’t had the tools or the mindset to allow us to have it all. I think that we’re in a position to allow both our own and the generations coming to have that. And this is what we want for our friends, family, and the world really.

Tim: More productive, healthy, happy lives?

Terry: Right.

Tim: Thank you very much for your time.

Interview 2: Steve King

Reading Time: 19 minutes

Steve King is a partner at Emergent Research.

Tim: Steve. I just want to thank you for taking the time to do this. Let’s start. What’s your background in dealing with temporary and contingent work?

Steve: We’ve been studying the growth of the contingent workforce now for over a decade so we have extensive experience in this space. We do surveys, interviews and focus groups. Our clients range from companies that are hiring these people to companies that are providing services to independent workers. We’re trying to figure out how to make life better for independent workers. We’ve looked at it from a lot of different angles. 

Tim: Some people say technology is finally destroying more jobs that it will create. Others say human innovation will, as it has in the past, create new jobs to make mass employment viable. Where would you put yourself on that spectrum and why?

Steve: I fall more on the “there will still be jobs” perspective on this. I don’t have any doubts that automation is taking jobs away, but automation has always taken jobs away. The six words that are the most wrong in forecasting are: “This time it will be different.” Right now, there’s absolutely no empirical evidence that automation is destroying jobs faster than it’s creating them. There are some studies suggesting that it could happen. The Oxford study is the one that gets cited all the time, but when you to get under the hood you’ll see that they’re being very clear: there’s no evidence that this has happened yet. They don’t even say it’s going to happen. They just say, “Here are some jobs that could be automated away.” And in the past, even in the recent past, you can look for evidence. There are more bank tellers today than there were in 2000. Think about bank tellers. We have more ATM machines, the banking industry is consolidating and shutting down branches, there’s online banking, and yet with all of that we have more tellers. We have fewer tellers than we had 2007 before the recession, but we have more tellers than we had in 2000. And yes, there will be fewer tellers 10 years from now but there will still be a lot of tellers. 

I go back to the 1980s when I worked for Lotus Development, the spreadsheet company. We came out with really the first truly successful broad-based  spreadsheet and everybody said, “Oh my god, think of all the jobs that are going to be destroyed.” But of course what happened was instead of destroying jobs, the spreadsheet allowed people to do more and they did. It actually created all sorts of jobs. What I love about this comment about destroying jobs is it’s all coming at the time that we have historically low unemployment rates and job creation is moving along at a reasonable clip. What I think is happening is that automation is helping create polarization of jobs, which is hollowing out of middle income jobs. What’s going on here in Silicon Valley is a  great example. We’re not gaining enough high income jobs to replace the middle jobs. And so a lot of people unfortunately are falling into lower income jobs. And so if you ask me if it’s a changing structure of the work force, I say yes. And I would say that it’s increasing income equality, and it’s increasing the bifurcation of jobs into high paying and low paying jobs on a relative basis. But overall, it’s hard to find any evidence that there’s going to be this wholesale “end of work” kind of scenario that we hear so often out here. 

Tim: So is technology changing the way we work?

Steve: It’s changing both the way we work and the way companies choose to deploy and use assets. And labor is one of the assets that they’re looking at. Technology is making work more mobile, it’s making it more collaborative and it’s making it more knowledge-based in the higher-end cases. It’s definitely changing work in a lot of ways. The other thing that it’s doing is it’s increasing the rate of change and the speed of which organizations and the economy operate on. And so that all is leading to greater levels of economic uncertainty. And when a corporation is faced with economic uncertainty what they try to do is reduce fixed costs and raise variable costs. And one way to do that is by outsourcing, partnering, using other people’s assets, and we’ve seen that across the economy as more and more firms are choosing an outsourcing path. It started with manufacturing outsourcing. And now business are outsourcing all over the place. All of that increases agility and flexibility, and reduces fixed costs, which are all good things. In terms of people, what companies do is raise the percentage of people in the workforce that are contingent because if they are contingent there are not a fixed cost. And we always talk about how in the United States labor is at will and can be fired anytime, but the truth is corporations don’t behave that way. They don’t behave that way because there’s a bunch of laws protecting labor, so they can’t just fire everybody at once very easily. 

Obviously there are also emotional and brand reasons. Layoffs are just very hard to do. Employees are effectively long-term commitments. And so the way to cut long-term commitments and fixed cost is to turn them into contingent workers. There is data from all sorts of sources showing that corporations, large and small, are increasing their use of contract labor of various kinds: statement of work consultants, project consultants, even in key positions across the organization. And technology has reduced the friction of doing all this. It’s as simple as becoming  an Uber driver in about 24 hours. Ten years ago if you had to get a part-time job, you had to find the job, you had to apply for the job, you had to interview for the job and you finally got the job-—there was all this friction associated with that process. Today much of that friction is gone. I can be up and running in 24 hours and I don’t even have to talk to a human being if I don’t want to. I can work the hours that I want. I don’t have to deal with a boss.

From a corporation’s standpoint, those same technologies are giving them just-in-time access or real-time access to talent, and the cost and the effort of finding, organizing and managing that talent because of technological innovation has fallen quite a lot. The friction associated with hiring contingent talent has fallen a whole lot. Economic uncertainty also gets more corporations to focus on reducing their fixed-term costs, on being more flexible and agile. When this reduced friction through technology is combined with economic uncertainty, the economy moves towards contingent labor. When I share this with others, everybody says, “Oh my god, everybody’s going to lose their job and everybody’s going to be contingent.” No, large and small companies and businesses are still going to have a lot of traditional employees. It’s just that they will be in the core areas of the companies. We’ve already started to see this shift.

There’s a lot of discussion around Facebook and Google and Apple because they don’t hire very many people relative to IBM in the 90s, or what GM did in the 80s. It is true that they don’t have very many traditional employees. Apple has about 90,000 now and GM back in its heyday had two and a half to three million. But if you look at the ecosystem around Apple or the ecosystem around Facebook, the number of people actually earning their living because these companies exist一the independent app developers, the third-party support, the business operations service provider一start to add up again. Those just aren’t traditional employees.

Tim: Instead of economic participation within one entity, it’s more of it’s an ecosystem of economic participation that’s anchored by Apple. I can be an app developer for Apple, but I simultaneously can be a Google app developer. I am able to participate in multiple ecosystems. Maybe the role of the corporation is shifting from employment to the creation of an ecosystem that allows people to participate in various ways.

Steve: And companies are unbundling intentionally because it’s more economically efficient. In the old days, vertical integration was more efficient. There’s a lot of discussion about the theory of the firm and Thomas Coase’s original work from the 30s, but the reality is in the old days you had to be vertically integrated to make things happen. Now you’re better off not being vertically integrated because you know you’re not a specialist in all things. So you bring in other people who are specialists and across the whole ecosystem you have greater efficiency. Maybe my organization is not particularly good at procurement or logistics, but UPS is good at logistics so I use them. It’s an example. What technology is doing is giving us the ability to coordinate activities more efficiently, which we couldn’t do before.

One of the projects that we do every year is the State of Independence study. This is a case study of coordination across entities. The client, MBO Partners, contracts with us. We then contract with a research firm to help us. That firm then contracts with specialty research firms to collect the data. Meanwhile we also contract with another firm to help us with the data analysis. And so there are six firms involved in this one project. Fifteen years ago that would’ve all been done by my firm. We would have needed to be big enough and integrated enough to do it all otherwise we would not have gotten the work. But today my little two-person firm can easily coordinate these six other firms and we’re the main producer of the project. And this is because I’m unbundled. I don’t have to maintain those resources full-time. I can rent those resources and the technology allows me to coordinate it across the group. 

This is happening across all chains of commerce. In some places, that means you’re outsourcing to another company or you’re hiring in another company. You may be hiring another company to do your marketing, but along the way those people are also hiring independent workers to help them. Even the big companies are hiring more independent workers. It’s part of that whole shift. 

Work is changing fundamentally, but 10 years from now over half of working Americans will still have traditional jobs. Much of the growth right now is in people working on the side part-time and with multiple sources of income. We looked at sites like Upwork. A third of the Americans on those sites have traditional jobs and are using the sites for side gigs. Side gigs are growing very, very rapidly. The number of independent workers is growing and it’s growing faster than the overall workforce, but it’s not growing at an astronomical rates. We have it growing 4% to 5% a year with the overall workforce only growing at 0.8% a year. The workforce changes are slow. There’s inertia, there’s investments, there’s the way people think, and so it takes a long time for that stuff to shift. But it is all shifting and the leading edge right now, in terms of the rate of  growth, is people working side gigs. It also should be noted this that this type of work is still small relative to the overall economy.

Tim: What parts of the contingent work discussion are expected and what parts are surprising?

Steve: It depends on your point of view. The thing that surprises us the most is how many myths there are around what’s going on in the contingent workforce. I read an article today about how the vast majority of independent workers are forced into this. But in every study that’s ever been done of independent workers, it’s very clear that a majority of them chose that path. All the private studies and certainly all of our work reflects that: that a majority of people chose the path. The second myth is that people don’t like independent work. Again, every study that’s ever done shows that the majority of people like it. And then of course every study that’s ever been done show the majority of people want to continue independent work. The fact that those big three myths don’t seem to change, despite overwhelming research and statistical evidence, continues to fascinate me.

Part of this is because there are all sorts of people whose best interests are served by the perpetuation of these myths. Another part of it is people who aren’t independent workers are much more risk averse. They can’t believe that people actually are embracing this lifestyle. If you look at the people who are criticizing this field right now, most of them are academics and think tank people. These two groups are about as risk averse as you can get, and they have the most traditional of jobs. Academics, once they are tenured, never leave their job. The most risk averse people are saying, “Well this is too risky” while those who are actually doing it are saying, “No, it’s not.” And then the third group that is critical of contingent work are journalists. And their industry has not fared well in this shift to independent work so they don’t like it either. So there psychological reasons behind why these myths persist.

What I’d like to see is for people to recognize the fact that this is a viable path that a lot of people prefer over traditional employment. Now this doesn’t mean we don’t have to make it more secure and improve labor laws. I like the idea of portable benefits. I like the idea of a prorated, independent security accounts. We want to make this better, but right now there’s this theme that it’s just really bad. It is certainly bad for a subset. About 25% to 30% of the people who are working in independent work very much dislike it. They would much rather have a traditional job, and they feel that they are being taken advantaged of. We have to definitely address those concerns. But let’s not throw the baby out with the bathwater. In our zeal to protect those who don’t want to be independent or are abused as independents, let’s be careful not destroy it for the 60% to 70% of people that chose to work independently.

Tim: Is the emphasis on online platforms in contingent work warranted?

Steve: I think the online platforms are very important. I think they’re going to grow and continue to grow in importance. But when you get under the hood, like we did in this most recent study, you find that one of the big complaints you always hear is you can’t make a living as an Uber driver. There are two problems with that complaint. The first is: Compared to what? When you compare Uber work to traditional manufacturing jobs, they are absolutely worse off. But those manufacturing jobs aren’t here and are not coming back. Now if you compare driving for Uber to driving a taxi you’re going to see that an Uber driver probably has a slightly better life and slightly higher income. Neither group is very well protected. Eighty percent of taxi drivers in this country are independent workers, which is also confusing. There is this push to get Uber drivers to be employees because taxi drivers are employees一no, they’re not一most taxi drivers are independents. The second problem with the complaint about the inability to make a living as an Uber driver is very few people are doing it full-time. It is better to compare driving for Uber to a low wage part-time work and look at the trade-offs around flexibility, scheduling, work-life balance and income. When you make that comparison, you begin to see the reasons why these platforms are popular. Your earnings tend to be above minimum wage and you have this enormous flexibility and lack of friction in doing it. So for many people, these platforms provide acceptable work. The key is to know the facts and look at it in a segment by segment basis.

The woman that’s suing all these gig work platforms very consistently talks about the work as full-time work. I do think that the people that do full-time work with Uber and others are going to end up being classified as employees under current labor laws. Uber does exert enough control for that classification. But I go back to the fact that somewhere between 5% and 10% of the people that drive for Uber are doing it full-time. If she wins her suits and gets everything she wants, the 80% of people that are doing this work for flexibility will stop and that doesn’t make sense for any of us, in my opinion. She’s focused on one small segment in making a claim that works for everybody, but that is the wrong approach.

Tim: So how should workers be thinking about work differently? How should the worker be considering work today?

Steve: The first thing is work is definitely becoming skills based in all ways. To compete today you need to think about how to develop marketable skills that can be used to get work and to earn a decent living. And this is nonstop. People have to reinvent themselves, they have to study on their own, they have to learn on their own and they have to upgrade their skills constantly. If you’re not doing those things you’re going to have problems. Traditional education isn’t required, but it certainly helps. There is also this whole new world of online and short-term education emerging. People need to understand that part of what they have to do is invest in themselves regularly to create work for themselves. And that is whether you are on the low-end of the high end of the skill spectrum一everybody has to think this way. The other big shift  everyone talks about is一and I think it’s fundamentally true一the lifetime career in one place is over for most people. It still happens occasionally. The government still has a lot of lifetime workers. There are private employers that still follow that model such as some utilities and insurance companies. But on average you have to be thinking about what your next next career is going to be on a regular basis. And so in many ways, you have to think like an independent worker even if you plan to be a traditional employee. 

Tim: There is a lot of debate about W2 versus 1099 saying that one is employment and the other is project-based. But I believe work is becoming project-based across the board, whether you’re a W2 or a 1099, and it’s better to conceptualize work through that lens because of the point you just made. The traditional approach to employment just isn’t there anymore. All workers need to be thinking about perpetually retooling and their next thing, not just contingent workers. 

Steve: One of biggest problems a lot of people looking at this are having is they’re equating W2s with the old style traditional work. How do we report for taxes is becoming increasingly disconnected from what we do. Temps report as W2s and so they’re not considered independent workers. If you have a 6-month contract with the company, you’re a W2 worker and you’re not considered an independent worker. Contract work is growing very, very rapidly. And so this idea that a W2 is fundamentally different than a 1099 is one of the things that’s really changing. Our company looks at it psychographically: How do people behave? When we interview someone who’s on a fixed-term, six-month contract, they know they’re not a traditional employee and they don’t behave like a traditional employee. But because of their tax reporting status they’re usually considered a traditional employee by people doing work in this field.

Tim: It sounds like the way we classify workers doesn’t have a lot of bearing on the reality of the work experience.

Steve: Right. So much of the work being done in this field is based on out-of-date government statistics that don’t reflect how work has changed and how employment has changed. What cracks me up about this is when you go talk to the Bureau of Labor Statistics they’ll tell you that it’s absolutely true. Nobody is hiding that fact. But most researchers still say that’s the data set I am going to use.

Tim: How should businesses be thinking about talent and work differently? How should they be thinking about recruitment and retaining talent?

Steve: There’s a couple of things there. Most businesses, on average, are increasing the use of contingent talent. And so businesses have to figure out what that means for the corporation and have a strategy around it. One challenge is that contingent talent increasingly holds key positions. There are talent shortages and they will continue to grow in certain fields. If you’re trying to find a mobile developer right now and you’re not a technology company, good luck. You’re going to be using contingent talent. You have to start to ask: How do I become the client of choice for that contingent of talent? How do I become the employer of choice for that contingent of talent? Companies think about this all the time for their full-time employees. They have to think more about it in terms of how they attract and retain contingent workers also because that is going to become a more important source of talent.

Within their full-time ranks, companies have done a horrible job, particularly since the recession, of treating employees well. Companies are not embracing the shift toward result-oriented work environments, which every survey shows every employee wants. And the companies that don’t provide good employee experiences will eventually find out that they no longer have good employees.

We’ve been studying the contingent workforce for ten years and we’ve been waiting for corporations to realize a big reason why a lot of top talent is leaving for independent work is traditional work sucks. They are capable of fixing that, but they haven’t yet. I think there has to be a renewed focus on the employee experience, and I think there has to be a new focus on making the contingent worker experience better so that you can be the employer of choice of both classes of workers.

Tim: What systemic changes, whether social or policy-oriented, do you think should be implemented?

Steve: At the policy level, portable benefits is the most logical thing. We started down that path with the Affordable Care Act, ACA. I do think we have to split at least some level of benefits off from employers, and that will help to a certain degree. I think we need higher minimum wages because a lot of jobs are becoming low end, and as a society it makes sense to sustain jobs that provide the ability to make a living. I’m very concerned about the fact that many of our existing laws that cover employees do not cover contingent workers, and I’m particularly concerned about safety laws. We have to expand our OSHA [Occupational Safety and Health Administration] laws and our policies so the contingent workers used in lieu of traditional workers have the same legal rights as employees when it comes to occupational health and safety.

Tim: What are your thoughts on basic income?

Steve: Yes, I had two reactions. One is politically it’s impossible. What Congress in the United States is going to vote for basic income in the next 50 years? And the answer is none. So the first problem is it’s politically infeasible. The second problem is we would have to gut all of our existing programs to pay for it. And so while in theory it sounds like a great idea, gutting all the existing programs would just be an enormous fight. But if you don’t gut the existing programs you simply can’t afford it. And the final piece is taking away the incentive to work is a bad societal decision.

What I think can happen is the expansion of the earned income tax credit. I’m a big proponent of expanding the earned income tax credit. If you look at the way people respond to that they don’t see it as welfare. Americans very consistently hate being on welfare. They think that they failed. They think that they’re a drag on to society. Americans want to contribute, and it would take a sea change in our attitudes to get people to feel a sense of contribution on basic income. But the earned income tax credit which is basically a pure handout almost, isn’t seen that way. It is seen as something that is earned because of work. I would like to see that expanded both in terms of coverage and in terms of the amounts that people are able to get. Yes, that system has been the victim of a fair amount of fraud, but that problem is much easier to surmount. That’s just a question of enforcement and doing a little better job at the backend with data collection. I think that’s a relatively easy thing to fix, whereas basic income thing was just a hornet’s nest.

The other great thing about the earned income tax credit is it was originally a Republican program that got upgraded by Bill Clinton during his administration by the Democrats. You got both political parties historically supporting it.

Tim: I just have two more questions. In this evolution of work, what are the top challenges that need to be addressed? What should we be focusing on as we have this discussion about contingent work?

Steve: To me there’s several challenges. One we talked about over and over again, I just think people don’t understand the data and what’s going on. I think we conflated the on-demand economy and Uber with the overall shift to contingent work. And I think that is a huge challenge going forward. We’ve always had this problem when we’re dealing with small businesses. One of the first things we have to do with every new study on small business is first ask the definition of small business because everybody defines it in a different way. The same thing is going on here. And so it’s very hard to come up with solutions to figure out what’s going on if nobody can agree to the terms and there’s currently no agreement to the terms. I think that’s an enormous problem and will continue to be a big problem.

Tim: It’s a taxonomy issue on a basic level.

Steve: Yes. And then it is too multi-faceted to understand. When you say future of work and the evolution of work, there’s technology involved, there’s social issues involved. One of the biggest drivers of change in workers is demographics right now with the aging boomers and millennials. When you have so many moving parts it’s hard to understand the linkages, it’s hard to understand what’s the driver and what’s not the driver. It’s just incredibly complex issue and I don’t think anybody truly understands it. I think it’s too complex a system to truly understand it, and so makes it very hard to figure out what to do with it.

Tim: Last question. What do you see as the big opportunity in how work is changing currently? What should we be trying to embrace and foment in what’s going on right now?

Steve: A lot of people have come to the conclusion that work needs to be more human and it needs to be more flexible and it needs to better reflect our life and our values as opposed to just going in and punching the clock. That’s a social trend that I think doesn’t get enough play. I think one of the reasons there is a growing number of contingent workers is people are chucking traditional jobs because they don’t feel it reflects their lives and it doesn’t allow them to live the lives that they want to live. And I think we now have the ability to give people traditional jobs and have that, and also have contingent jobs that have that. And so we do have an opportunity to make work much better from a social standpoint. We’re not doing that yet, and that’s why so many people are going independent to create it themselves. But I think there is a real opportunity for corporations to take a lead on that and some of them are. There is a golden era opportunity here if we get focused on the right things.

Having said that I’m pessimistic that we’re still going to have income inequality in a bifurcated workforce because the work is getting more complex and more skills-based. And the reality is a lot of people are not going to be successful in that kind of world.

Tim: What you’re saying is that as the skills gap widens it’s going to be harder and harder for people to catch up and to span it.

Steve: We had a system where average was fine. You could have a very successful life as an average person, as an average contributor. And the reality is most of us are average. Now, you have to be better than average. You got to find something that you’re better than average at. And there are a lot of people that are not capable of that, unfortunately. That is why improving safety nets is going to continue to be important.

Tim: Great. Steve, those are all the questions I had. Thank you.