Robert Colvile on wrong-headed approaches to the Gig Economy – @TheTimes

Left-wing politicians and officials at HMRC dislike the gig economy because it doesn’t conform to their model of what work should be.

Yes, welfare and regulation need to be adapted, but changes should go with the grain of modern employment rather than against it. Not least because it’s what so many people actually want to do.

Read the rest in The Times, here.

A wilful determination to see participants in the gig economy as helpless victims risks destroying the very real value that sovereign professionals both provide and enjoy.

 

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The flexible workforce and the future of work

Short but interesting article on how business is responding to the rise of sovereign professionals by using this new, highly skilled and flexible workforce to power more agile and innovative business models.

This idea has been bubbling around for a few years. Back in 2012, Andrew Burke‘s research showed how freelancers contributed to both agility and innovation within firms (The Role of Freelancers in the 21st Century British Economy). Burke is now Dean of Trinity Business School and Chairman of the Centre for Research on Self-Employment.

Of course, the Irish management writer Charles Handy  foresaw all this in his 1990s books The Empty Raincoat (1995) and The Age of Unreason (2002). The ideas, however, finally seem to be gaining critical mass and traction with larger businesses.

In the last couple of years, Accenture have identified the move as one of the key trends in their annual Technology Vision:

Firms like MeasureMatch (a client of mine) are appearing to answer the need for reliable, responsive marketplaces to match buyers with the sovereign professional suppliers.

It’s an exciting time to be a sovereign professional.

 

 

The Medieval gig economy? @HistoryToday

History Today has a piece by David Long on the employment status of the average priest in Medieval times.

As various professions like Law were emerging, the Church was well established as a career of choice, easily overlapping power in the secular and spiritual worlds. A young priest from a well-heeled family could afford a good education and a professional role as a prince (or at least senior manager) of the church.

The average priest-in-the-street, however, had more of a portfolio career, picking up priesting gigs in the neighbourhood and mixing those with other consulting and “enforcing” jobs.

Long parallels this “hollowing out” of the front-line parish profession with today’s “ever more casual and commercialised” professions.

I think it’s simply another reminder that our perception of work as a solid, predictable, 9 to 5, 18 to 65, activity is a relatively modern (and fleeting) construct of the Industrial Revolution. Work wasn’t like that before, and it won’t be like that after.

 

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Competence and humanity – @thisisseth

Seth Godin makes an interesting observation on the meaning of “competence”:

It doesn’t take a genius to see that competence is no longer about our ability to press certain buttons in a certain sequence. Far more often, competence involves the humanity required to connect with other people, in real time.

The wider point is that the more that AI and tabloid-terrorising robots accomplish, the more important will be the “human” skills that technology can’t offer. As Seth says,

It requires emotional labor, not merely compliance.

And, of course, that is where the sovereign professional – whatever his or her particular field – will add value and earn the rewards.

 

Photo by Simon Wijers on Unsplash

 

 

Philip Hammond eyes £1bn budget raid on freelancers – @TheSundayTimes

The Sunday Times reports that the Chancellor is considering another attack on sovereign professionals. The concern seems to be, as before, “disguised employment” and the Sunday Times’ coverage is couched in terms of “levelling the playing field” and “significant tax advantages”.

The reality of course is different.

When running properly, individuals operating through personal services companies are each individual businesses carrying all the risks of business and not enjoying the corporate comfort blanket benefits of traditional employment. If the cost to the client company is higher than employing a traditional employee (and often the fully loaded costs are not as far apart as crude comparisons of “day rates” suggest), then the client business benefits from flexibility and agility that no commitment, on-demand services provide.

A tax raid risks damaging the supply of this important flexibility while also increasing the cost to client firms. This has already been seen in the public sector where restrictions similar to those imagined here have already been implemented. It’s a short-sighted and ill-considered move.

Does “disguised employment” actually exist? I’m sure it does. A number of recent court cases suggest that there has been a trend for some employers to seek the cost benefits of using freelance contractors whilst retaining all of the control traditionally associated with  “permanent” employment. Those cases should rightly be pursued, but not by painting the self-employed as either downtrodden, abused workers or system-abusing fat cats.

Being a sovereign professional is a choice. It has real benefits – not least in flexibility – but it comes with risks, costs and responsibilities. A suitable test of employment would investigate the extent to which those risks are real, rather than simply punishing providers of needed skills through a flexible model.

 

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Lending and the gig economy

On EconomicVoice.com, the University of Edinburgh Business School’s Jonathan Crook highlights the risk to sovereign professionals caused by the misalignment between traditional lending and the gig economy.

As Crook observes:

while this in-the-moment working arrangement can be sustained in the short-term, only thinking about the now may lead to long-term financial issues.

because:

For years, traditional lending has focused on assessing stable consumer income to determine financial risk. Those with full time and stable jobs will fare better. But ‘gig economy’ workers clock up individual hours which – from a credit risk modelling perspective – may not be seen as joined up, consistent or predictable.

It’s an age-old problem. While the freelance / gig / sovereign professional economy has boomed in recent years, overly conservative bank, stuck to their risk-averse playbooks, have failed to move with the times.

Daniel Pink highlighted the problem in his book Free Agent Nation way back in 2001.

However, in many ways, the security of “”full time and stable jobs” is an illusion. An employee who loses their job has no network or process to fall back on. If a freelancer with a portfolio of clients loses a client, he or she has a basket of other clients to fall back on; the risk is spread. And, if the sovereign professional is an interim manager or “super-temp” they have an established network of agency relationships to help them towards the next project.

There is a clear market need for a solution. Crook suggests that:

it is possible some agile lenders will see this as an opportunity. Instead of examining the consistent hours an employee works, it’s not inconceivable to think they may begin tracking how many years someone has worked in this way and the overall hours they’ve been paid for.

Pink’s solution, at least at the higher earning / larger lending end of the scale was the issuing of shares or bonds, citing examples like Bowie Bonds and the fact that boxers (amongst other athletes) fund their own training by selling shares in “themselves”.

Whichever way it goes, the lending market needs to adapt and, in all likelihood, the solution won’t come from traditional banks at all. A player like PayPal – who have already disrupted small-business funding with their  PayPal Working Capital product – will take a sensible, reality-based view that recognises that a sovereign professional’s established free cash flows are at least as secure as the historic wages of an employee.

(Disclosure: PayPal is a client of my business, Burning Pine)

 

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