Serfs up – The Economist on the gig economy

The Economist has an article on freelancing: Serfs up – Worries about the rise of the gig economy are mostly overblown.

I have a couple of thoughts whenever this comes up.

‘Twas always thus

There has always been a freelance / independent / gig economy / zero-hours sector. Indeed, if you take a long view, it’s the 40 hour nine-to-five that’s the exception.

My early career was in the hotel industry, a sector that couldn’t exist without what we used to term “casual staff”. You need 20 waiting staff for a banquet on Saturday night, then maybe nothing for a week.

It was always a two-sided market. If the individuals involved were good – i.e. reliable, skilled, etc. – they moved up the mental list of who to call first. But, you had to treat them right, too. If you didn’t offer the going rate, you couldn’t get the staff. They would go and work for another venue.  Similarly, if you didn’t feed them well, messed them around or if their manager on the night was a buffoon, they wouldn’t work for you. That all seemed fair enough.

That’s not really dissimilar from the work I do, today. If I do a good job and provide a great service, I get invited back. If I messed up, the phone (or inbox) would go eerily quiet. Along the way, of course, I’ve “sacked” a few clients, too.

Coase was correct

Back in 1937, the economist Ronald Coase explained why firms exist. One of those things that no-one had thought to question before. It was, he realised, all down to transaction costs. Where work is regular, predictable and ongoing, it makes sense for two parties to enter into an employer-employee relationship. Where the requirement is more ad-hoc, the business finds a supplier and enters a purchase relationship.

The last decade has seen a dramatic drop in these transaction costs. Firstly, through the email and the web, more recently through the advent of platform companies.

In so many ways, nothing else is different. It’s simply that the break point (for both parties) is lower, making it easier for individuals and larger client organisations to transact lower-value projects or tasks.

The answer (to anything) is rarely more legislation

As The Economist concludes:

If the courts rule that vast swathes of gig workers are in fact employees, they could raise costs, killing innovation and hitting jobs. Yet inaction brings risks, too. If a growing chunk of the workforce has to make do with poor pay and worse pensions, governments will eventually have to pick up the pieces.

It seems that the real trouble only occurs in the grey area where a client / employer seeks to have all of the benefits of an employment relationship (mainly control over time and schedules, the way work is performed, and the individuals’ ability to work for other firms) without the costs of employment taxes, statutory benefits etc.

And, that cuts both ways as well. There have been several cases where individuals have enjoyed the higher cash benefits of being classed as a long-term, self-employed provider of services, only to bring a court case for employee-related stock benefits that they had been “denied”.

But, in most of these cases existing employment law, sensibly applied, should cope. The last thing we need is the burden of “employment rights” on individuals who are perfectly happy with their independent, sovereign professional status.

That said, there is a political motivation for greater legislation. With most workers tucked up in nice, simple and centralised employee contracts, HMRC could contract out its tax collection to employer firms. Managing many more independent small businesses is harder. Today’s Times carries a report that the Chancellor Philip Hammond is planning a “tax crackdown on synthetic self-employed“.

The Treasury reckons:

The Treasury believes a third of people claiming self-employed status as a “personal service company” are actually full employees and should pay more tax.

It says without reform, high levels of non-compliance with tax rules could cost HM Revenue and Customs, which collects taxes, £1.2bn a year by 2023.

Note: “high levels of non-compliance … could…”

 

Photo by chuttersnap on Unsplash

 

Just start – Nicholas Bate

The always inspiring Nicholas Bate reminds us of the secret to success – just start:

  1. Startwhatever your mood, whatever the weather.
  2. Start small.
  3. Start with a bang.
  4. Start to prove them wrong.

Start by reading Nicholas each morning, here.

 

Photo by Caleb Woods on Unsplash

Work to be one in a hundred

You don’t need to be one in a million to succeed, but you should aim for one in a hundred.

One hundred is an interesting number. In ancient Rome, a Centurion commanded one hundred men (usually between 60 and 150). Even today, an army company will comprise about 100-150 soldiers. Reaching 100 employees is a landmark, and a step-change, for a growing business.

The anthropologist Robin Dunbar proposed, in 1992, that the human brain can maintain a maximum of around 150 social relationships (Dunbar’s Number).  In more recent research, he has found that the average number of Facebook Friends is 155. You can have more links, of course. Clicking is easy, but maintaining real social relationships is hard.

Take that across to a typical professional scenario. Your business relies on the relationship (not transactional) model: clients need to know and trust you. When your client faces a problem, they can choose from just 100-150 trusted relationships to solve it.

You want to be that one per cent – the one person best suited to save the day.

 

Photo by Thomas Lefebvre on Unsplash

On phones, open plan, distractions and focus

The Economist’s Bartleby column on human behaviour in the face  of relentless “on-ness”:

In the face of 24-hour communication, we rebel in our own quiet way. We put personal communication first, and we reply in our own sweet time.

 

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Focus! How to get things done – @Chris_Bailey

Anyone who prescribes meditation, coffee and wine deserves attention.

Yesterday’s Times has an interview with Chris Bailey on his new book, Hyperfocus: How to Work Less and Achieve More.

Our inability to focus, because of our digital aids to productivity, is the bane of our times.

In a fascinating article, Bailey prescribes:

  • Set yourself no more than three daily tasks
  • Do a phone swap
  • Set an hourly awareness alarm
  • Switch environments when you need to
  • Ditch brain training apps for meditation
  • Buy a cheap alarm clock
  • Save your first coffee for work
  • Play a song on repeat
  • Take a mindful shower
  • Have a glass of wine

It’s definitely worth a read and some consideration. Over a glass of wine.

The interview is here.

The man, via TED, is here.

The book is here.

More open plan

Just adding to my earlier post on open plan. Here’s Wally Bock’s Three Star Leadership, via Execupundit, with a wealth of articles on the subject.

His own summary:

People seem to want a one-size-fits-all answer to the question about what makes the best workspace. I don’t think there is one. I think the answer depends on the people involved, the work to be done, and the size of the team.

Read the full breadth of perspective, here.

 

Photo by Annie Spratt on Unsplash

The ins and outs of open plan

The debate over open plan office layouts rages on.

For many organisations, the advantages of real-estate savings, increased collaboration and organisational flexibility seem overwhelmingly to the good.

To this, today’s Times adds research from the University of Arizona that suggests open plan is good for the participants’ health as a result of higher levels of activity and lower levels of stress.

On the other side of the argument, the Economist’s Bartleby column reported some possibly counter-intuitive findings: Open offices can lead to closed minds. A report published by the Royal Society – The impact of the “open” workspace on human collaboration – found that face to face interactions decreased by around 70% once open plan was introduced, as:

“transitions to open office architecture do not necessarily promote open interaction. Consistent with the fundamental human desire for privacy and prior evidence
that privacy may increase productivity, when office architecture makes everyone more observable or ‘transparent’, it can dampen F2F interaction, as employees find other strategies to preserve their privacy; for example, by choosing a different channel through which to communicate. Rather than have an F2F interaction in front of a large audience of peers, an employee might look around, see that a particular person is at his or her desk, and send an email.

 

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