Work Future 4: Attention Employers

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There is a lot of hype about the gig economy and prophesies that Me Inc. is everyone’s future. But regardless of hype and the issues surrounding employment itself1, employment isn’t going away anytime soon. The percentage of employees working for large employers (500 employees or more) has steadily increased since 2004, accounting for 51.6% of employees in 2012.2 3 What can employers learn from the trends of the gig economy to take healthy advantage of gig workers?

Four “lenses” that consistently surface in surveys of why and how contingent workers4 end up contingent are stability, sophistication, lifestyle and learning.

The importance of stability to workers is easy to understand. Having a predictable amount of money for a known duration of time allows for planning and reduces anxiety. Stability is likely the most dominant concern for gig economy workers. (The decreasing duration of job tenure suggests that full-time employees may also be feeling the same stress.)

Sophistication refers to the kind of work being undertaken—workers want to be challenged. Forward-looking employers need to find ways to offer sophisticated and engaging work if they want sophisticated and engaged workers. An advantage large businesses have is they can tackle very complex problems that require thousands of minds to solve—a team of three is not about to build an MRI machine in a garage. Whereas an advantage small businesses have is it is often easier for workers to contribute in more areas of the overall process. These are just two ways sophistication can be leveraged according to scale.

Lifestyle acknowledges that work life and private life are not two separate things to be balanced, but two parts of a whole that need to be integrated. Children, health, parents, education, vacation and passion-projects all affect productivity. Happy and healthy people cost less and make individuals, businesses, and societies more economically vibrant. The wild proliferation of employer ratings, “best places to work” lists and certifications for green, democratic workplaces, and corporate responsibility, while great for appearances, are ultimately driven by the competition for talent. Consideration of lifestyle is gaining more importance in the hunt for talent.

Learning recognizes that if skills are not kept sharp in our fast-changing world, they rapidly lose their market value. Today it is the norm to be looking for the next “thing” even when the current “thing” appears to be working just fine. Over-achievers are looking for work that is all about learning all the time, and the minute the learning stops, they get bored and wander off. Everyone else is realizing that the only way to stay relevant is to keep learning.

How can employers re-imagine compensation, time and benefits through the lenses of stability, sophistication, lifestyle and learning?


Deferred compensation, usually in the form of stock options that vest over time, is frequently used to retain high-value employees at larger organizations. Its more derogatory name of “golden handcuffs” suggests how this practice can result in decreased worker productivity and actually may not be in a company’s long-term best interest. But what can be negative leverage for an employee (“The only reason I am working here is for my stock options.”) can become an opportunity when modified for contingent workers.

Contingent workers face consistent income volatility, while small businesses generally cannot compete for high-priced talent with large businesses. Taking on an employee at $100,000 per year isn’t possible or desirable for many small businesses. This is especially so when the demand for that individual’s services isn’t constant. But a small business may be able to offer a high-talent contingent worker $100,000 over two years to do a major project in a matter of months. The advantage to the worker in this scenario is they become affordable to small companies and the potential client-base expands.

For businesses, deferred compensation can make talent more affordable and cashflow management less difficult (smaller payments over a longer period rather than a large payment immediately). Obviously, legal guarantees would need to be in place.

Some will argue that deferring compensation for workers is too risky because it is akin to gambling one’s pay on the future of the client. This is certainly true. But those making this argument don’t realize how much “gambling” is already going on in the gig economy.


One thing employers can do immediately is break out of the 9-to-5, 40 hours a week mold. That model was functional for three shifts at the factory, but it is out of touch with the realities of 21st Century lifestyle demands. This points directly to gig economy work, but even permanent employees should be given more flexibility in how many hours they work, when they work, and where they work. A retirement home in Sweden has found that reducing the workday to six hours increased efficiency and reduced turnover5—two things every employer wants. Or perhaps a worker is okay with working intensely (50-60 hours week), but they are given an annual month-long sabbatical to recharge. Because of the amplification of technology, a great hour of work from one person has the potential to generate incredible value for a company. Quality of hours is starting to trump quantity of hours.

Getting creative with how hours are allocated doesn’t just benefit the workers. It can add a dimension of flexibility to businesses as well. A full-time employee needs to be kept busy full-time. As competition becomes more global and technology more sophisticated, is it smart to build expectations of productivity around the rather arbitrary number of 40 hours a week? Why not ask workers to determine their ideal workload and help them make that happen in order to utilize, and only pay for, their best work? Employers need to design their business structures to support quality hours of productivity.

Contingent workers can make a company more agile and innovative, assuming there is a stable talent pool to tap when needed.


The lesson for employers here is help workers help themselves. Compensation and benefits are often wielded antagonistically as tools to coerce commitment (see: golden handcuffs). Benefits are also massive responsibilities and relatively illiquid costs for businesses. How can we reduce the antagonism, get businesses out of the business of providing healthcare and retirement, and empower workers?

One answer is portable benefits. An example of portable benefits in practice is the 401(k). The 401(k) goes where the worker goes. Another example is self-insurance. The biggest innovation of the Affordable Care Act was the step it took towards making benefits independent of specific employment situations, but we have the opportunity and responsibility to innovate more.

Thinking outside the box, Labor organizer David Rolf and investor Nick Hanauer have proposed the “shared security account”6 as one avenue towards benefit portability. The gist of the shared security account is proration (benefits allocated on an hourly, or more granular basis), portability (benefits not attached to, or the responsibility of, a single employer), and universality (elegance of policy to minimize loopholes and complexity). Imagine if a worker had a shared security account and a business simply paid compensation with a determined percentage going to that account. This allows the business to contribute to the stability of the worker (helping guarantee the availability of talent) while maintaining the worker’s independence.

Innovate or alternative benefits can be provided. In Milwaukee, WI, one general contractor who uses project-based workers realized he was not in a position to offer traditional benefits due to the nature of the work. So instead he picks up his workers at their homes, feeds them breakfast, lunch, and snacks, and then drops them off at home, every day. These two “benefits” of transportation and food are allocated on a daily basis, making it possible to offer alternative benefits where the traditional options are not available. The advantages for the business are the workers show up on time every day and are fed and ready to work.

Employers should also consider that contingent workers may actually prefer to provide benefits for themselves. Benefits that are not tied to an employer can have a stabilizing influence.

Regardless of the merits of these particular ideas, employers are an important partner in the evolution of the gig economy.

Questions for further consideration:

  • 4.1 How can employers be encouraged to foster behaviors that are mutually beneficial to businesses and workers?
  • 4.2 How can employers help stabilize contingent workers?

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  3. It is worth noting this could be due to either a growing number of people being employed by large employers or due to fewer people being employed in smaller businesses. ↩︎
  4. Agency temps, on-call workers, contract company workers, independent contractors, self-employed workers, standard part-time workers. ↩︎
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