The Future Of Work Is Already Here
While we’ve been busy talking politics and debating healthcare, the future of work has already arrived. A massive shift away from traditional positions and professions has occurred, with up to 35% of workers in the United States participating in what’s been coined as the “gig economy.” It may sound like hipster lingo, but the gig economy refers to a work market in which the jobs are done via contract by freelancers. And it is definitely not a fad.
The growth of the gig economy is expected to rise exponentially as technology and internet access booms, enabling even highly skilled workers to make a living using platforms online. As freelancing becomes more popular, so rises the remote worker. More than a quarter of all Americans say they worked remotely for a significant portion of the work week last year, enabling focus on better work-life balance and allowing employers to cut down on infrastructure costs.
But it’s not all sunshine and roses as America’s economy undertakes this journey toward the future of work. Factors like automation and advances in artificial intelligence are poised to dramatically alter the economic landscape in the very near future. A report published by the McKinsey Global Institute earlier this year estimates that by 2055, half of today’s current work will have been replaced by automation.
Are we prepared for what the future of work might bring? Rantt sat down to chat with Michael Solomon, the founder of 10x Management, who curates high level freelance tech talent for some of the most innovative companies in the world.
Michael, 10x has been operating as part of the “gig economy” since 2011, connecting the top 1% of tech talent with the best companies across the globe to do meaningful work. Has 10x’s role in the gig economy changed in the last five years as remote work has evolved?
The world is increasingly becoming more comfortable with using freelancers (aka 1099’s, contractors, consultants, contingency workers, agile talent, etc.) for high-level tasks. Previously, freelancers were used in very temporary lower level tasks or extremely high-level consulting roles. The middle has now really started to fill in, allowing for very high-level tech talent to play mission critical roles at major corporations. There’s still a very long way to go on this but the trend is definitely moving in the right direction at a healthy pace.
In your opinion, what role does remote work play in the gig economy? Are there barriers to entry for freelance work that kept some people trapped in traditional positions?
Remote work is becoming more and more acceptable as people begin to understand the benefits and the doors that it opens. When 10x is identifying the right talent for a customer role, we hate being limited by geography. When people are open to remote work, it allows us to pick the best person for the job rather than limiting the talent pool to be the best person for the job in city X.
Finally, the Affordable Care Act and the open exchanges allowing individuals to purchase quality healthcare with ease has really opened the floodgates. One of the final factors keeping some people in W-2 roles was the fear of not being able to get quality insurance. Now that this has changed (and hopefully it is not going to be reversed), anyone who has the stomach for the freelance lifestyle, the skills, and pipeline of work to make it happen, can do so without fear of catastrophic health care issues.
Employees and employers enjoy a greater level of flexibility and choice as part of the gig economy, but are there inherent drawbacks? How you do you mitigate risks for those wary of moving outside of the safety net of traditional work?
As with all complex transitions, the changes that the gig economy brings require a healthy dose of analysis, planning, and management. When one does those things diligently, the agile workforce becomes an incredibly powerful tool that allows companies to add on-demand capacity, allowing them to scale up and down as needed as well as gain expertise in ways that were never available previously. This brings with it tremendous efficiencies that enable companies to enjoy expertise which might have otherwise been elusive or impractical. It also allows them to scale up human capital almost as easily as cloud computing does with their server capacity. These are really powerful tools and the benefits for those who understand how to use them are virtually infinite.
The best practices for finding, vetting, onboarding, managing, and winding down freelancers are too numerous to list here but for those interested, it is a steep but very short learning curve with tremendous benefits and value. We cover this extensively on our blog. The biggest issue we see is many larger corporations have not begun to effectively make this transition. It is not surprising given that large companies, like large ships, turn more slowly than smaller ones, but they really have the most to gain or lose. This is why we advocate so much for this and occasionally advise companies on the best practices for maximizing this opportunity. It is also why we put so much emphasis into curating the right talent for each gig. We are now getting it right on the first try 95% of the time. We can and will improve that but we are pretty happy with having achieved that. The faster and more accurately we can provide the right talent, the greater the value to the company.
So it sounds like you feel companies are really coming around to the idea of the gig economy as more than a short-term solution?
To date, the people at those larger companies who most often engage our talent are product owners or innovation/lab groups who have urgent needs and want the best. They are the ones who often get the latitude to go outside of the traditional procurement channels that the HR departments use.
I suspect with the next economic downturn when headcounts are cut and agile talent is used extensively to fill in the gaps, many companies will adopt these best practices and the workforce will be forever changed with a much greater blend of w2 and 1099 when the economic cycle concludes.
What do you see happening as we move further into our evolution as a global gig economy? What does the “future of work” look like?
This is a great question and I wish I had a more optimistic answer. The gig economy is wonderful in the flexibility that it affords some people and the safety net that it is for others who can no longer find gainful w-2 employment.
Our recent realization is that it is actually just the rest stop on the highway between the employed world we’ve resided in for the past century or so and the post-labor world we’re rapidly heading toward. Net job loss as a result of automation and artificial intelligence/machine learning is coming soon. How our society prepares for these changes will determine if we’re heading into an apocalyptic transition or a civilized one.
Yikes. That sounds pretty unpleasant. What do you think we need to do to improve the outlook for American workers?
Because of these realizations and the data that informed them, we’re committing our time and energy as a company and individuals to publicizing this issue as far and wide as we can. This topic needs its Inconvenient Truth moment where the citizens, media, and policymakers move it to the top of the agenda. We need all of our best and brightest minds focused on the two key questions that need answering:
1. How will we keep people out of poverty when there are no longer jobs for them?
2. What will people do with their time, talent and energy in a post-labor world?
In the absence of answers, planning, and implementation of these solutions, it will likely be disastrous.
In your opinion, is the United States in a good place to manage this transition away from traditional work? Where do we have the most “work” to do?
Given that Steven Mnuchin, the Treasury Secretary of the United States stated in April or May of this year that net job loss from automation / AI is “not on their radar,” and they are “not giving it a second thought” because it “is 50 to 100 years away,” I would say we’re in a pretty lousy position. This was the same week that PWC released a study stating that 38% of American jobs were likely to be eliminated in the next 15 years. To be clear, these issues are non-partisan and any criticisms that I state here are not about which side is right. It is simply a matter of fact that thus far, the current administration seems to have no concern about this problem. Bringing manufacturing jobs back to the United States is like using a teaspoon to bail water out of a rowboat when there is a hundred foot tsunami about to land on it.
I don’t think many people are paying much attention to this issue at all but I do think of those that are, very few understand that this will affect all levels of our society. This is not a blue collar problem only affecting those in low-paying jobs. This will impact white collar professionals with advanced degrees as well as those in lower skilled jobs. This wave is not going to care about anything other than can a task (ie. part or all of your job) be done better and/or cheaper by a machine. We are learning fast that many can.
At the risk of sounding cliche — where do you see 10x in ten years? Are you uniquely suited to offer value moving forward in a future without traditional work?
Because we work with extremely high-level tech talent, we’re well poised to weather the storm quite nicely. Those who create high-level technology will be in need for a long time to come but I’m not quite sure I know how to define that word “long-term.” For now, I’m grateful that we work with some of the best and brightest and most innovative people who are highly in demand and who are also highly adaptable. They love learning new things and facing big challenges. I believe the value proposition for them (and us as a by-product), as well as those who hire them, is quite strong. Now we need to focus on helping the majority of Americans who may not be so fortunate with the coming transition.
Want to learn more about the future of work? We’ll be delving into the details in a feature piece next month about job automation, artificial intelligence, and strategies like basic income that could help us ease into a future without traditional work. Is America prepared for our robot overlords? Maybe we should ask Alexa.