Work Future 8: Gig Work as Workforce Development

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The Brookings Institute recently relaunched their Metro Monitor1 with the declaration that cities need to move beyond the focus on jobs when it comes to benchmarking success:

…the problem is that the relentless chase for jobs, absent broader goals to improve people’s economic well-being, can be costly. Local tax incentives to build a shopping center, for instance, can result in near-term job growth. But if that development occurs in a region where incomes aren’t growing, then that subsidy merely shifts consumer spending and associated jobs within the region, rather than creating net new (quality) jobs and lifting incomes.2

This narrow focus on jobs misses the point that jobs are actually means to other ends3 with the most important of those ends being consistent and sustaining income. This obsession with job-creation is built upon the assumption that a job equates to consistent and sustaining income. The reality is there are plenty of jobs that do not provide consistent or sustaining income. Many “jobs” today have more in common with project-based work than they do with traditional W2 employment even though they are frequently categorized as such.4

Far too few of our workforce development efforts focus on the generation of value for society as a whole.

Workforce Development Today

Workforce development efforts typically take two forms. Sector-based approaches (demand side) assess the current and future needs of specific industries and employers and attempt to provide workers to meet those needs. Place-based approaches (supply side) focus on training unemployed workers to improve their prospects in the labor market. There are models that integrate both approaches.

The sector-based approach is reactive in that workers are molded to the needs of employers today and those employers’ best guesses about tomorrow. This approach was very functional when an individual could spend years building up skills and then secure a position that provided consistent and sustainable income for years or even decades. But the fast pace of the 21st Century economy means the sector-based approach has become a boom and bust cycle. Timing has more to do with workforce development than we acknowledge. The current economic pace inherently favors those who are already on a leading edge. Having skills and connections begets the further development of new skills and new connections. The reality of this situation is that by the time most sector-based workforce development programs are defined and implemented, many of the opportunities have already passed.

The place-based workforce development approach is more worker-centric in that it begins from the current state of the worker rather than the needs of employers. Factors as varied as housing, language fluency, and soft skills are often incorporated into place-based programs. The essence of the place-based approach is to prepare workers for the labor market in general while addressing both employment and non-employment concerns.

The down side to the place-based approach is twofold. The first issue is many people who are most in need of income have a very long way to go before they become desirable employees. Very bluntly, if an individual is struggling with basic skills such as language and the use of email, the odds of that individual securing quality, long-term employment are slim. Knowing that 44%5 of college graduates are underemployed6 is a sobering reminder how competitive the job market is today.

The second failing of the place-based approach is the emphasis on job rather than work. Some people are unemployed not because they are unprepared to work, but because their life circumstances prevent them from being able to make a full- or even part-time commitment. We need to recognize that factors such as health conditions, family responsibilities, and transportation limitations often restrict employability. Our current concept of equating jobs and work severely limits how we value work and how we prepare people to provide for themselves.

The core elements of the sector-based and place-based approaches are incredibly useful. Employers most definitely need to be a part of the plan, and programs need to address the entire reality of the worker. This means we need to embrace squishy issues like health, housing, and family along with the challenge of income generation as part of a systematic approach to improving our economy. These are not separate issues to be addressed in silos by hospitals, governments, and businesses. It is because of this complex nature of the workforce development challenge that project-based work is an opportunity.

Workforce Development Tomorrow

The opportunity of project-based work for workforce development is that it allows for a more incremental approach. Instead of focusing on taking people from unemployment to $30,000 a year, we should instead focus on moving people up the income scale in smaller increments. Uber slices up taxi jobs into smaller increments. AirBnB slices up hotels into individual rooms. The mental shift required is to focus on income generation and network-building and skill-building as the end goals rather than getting people jobs.

More businesses could participate in workforce development programs if the emphasis on traditional employment was reduced and the programs invited projects-based work. This model would be mutually beneficial to small businesses and project-based businesses in particular. Small business face growth challenges because each new employee massively impacts the bottom line. Going from two to three employees is a 50% increase in labor costs. This approach to business growth is often undertaken on a bet that an increase in future revenue will cover the additional employment costs. By focusing on full-time employment, workforce development programs effectively dismiss many small businesses as partners because they aren’t in a position to risk the overhead of a new employee.

The reality is small businesses are already using the project-based model informally. Our research has found that skilled trades businesses will bring on a new worker on a cash basis to avoid the employment commitment while vetting the worker’s performance. If the worker is a good fit, that person is made an employee. If not, the worker is paid for the time and moves on. This very useful process is technically illegal under the current IRS classification system of employees and contractors7. It is easy to imagine how workforce development programs could better partner with businesses if this process were legalized and elegantly regulated.

On the worker side of the equation we see a similar opportunity for project-based workforce development that is currently unrecognized and in a legal gray area. Many people entering workforce development programs already make some money. The vast majority of this income is unreported and a portion of it is due to illegal activities. Informality and illegality aside, the core point is if people are participating in the market in any fashion they are practicing entrepreneurship through project-based work. Furthermore, this is a much more practical (if often inefficient) form of entrepreneurship than the institutionalized classes, accelerators, and bootcamps that organizations are scrambling to activate. These workers already have income potential and marketable skills. Yet this income potential and these skills are often overlooked or set aside by existing workforce development programs.

The other opportunity of project-based workforce development is that by changing the unit of work to something more flexible and incremental, we can better acknowledge and support the full breadth of roles and responsibilities people have. Project-based work allows for income generation to be better integrated with non-work concerns such as caretaking responsibilities, chronic health conditions, and transportation limitations.

Start where people are.

A paradox of the current job obsession is that prior to entering workforce development programs, many underemployed and unemployed workers are forced to be practitioners of project-based work to get by. When these workers enter workforce development programs, their project-based work potential is not recognized as a viable means to stable income because it doesn’t look like a “job” or can’t immediately be a “job.” Ironically, research is currently showing that the vast majority of new work opportunities are exactly in the area underemployed and unemployed workers have already been working: project-based work.8

As a society, we are beginning to quantify the high social and economic costs of prioritizing economic concerns over social concerns. It is being recognized that we cannot address the economic without the social. A project-based work approach is one way to begin to integrate approaches that have been separate for too long.

Questions for further consideration:

  • What are the first steps workforce development programs need to take to incorporate project-based work into their approach?
  • How can more businesses be brought into workforce development efforts through project-based work?
  • What parameters need to be set to prevent the abuse of project-based workforce development programs?
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  4. This is core argument put forth by the Gig Work Project. ↩︎
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