Steve Percy
President, Diolkos Commerce Solutions
February 2021
“…Once people accepted the idea of an app, you could get them to pay for dozens of them—if not more. You could get people to send thousands of dollars to strangers in other countries to stay in homes they’d never seen in cities they’d never visited. You could train them to order in food—most of their food, even all of their food—from restaurants that they’d never been to, based on recommendations from people they’d never met. …” Everything Is Broken – And how to fix it, Alana Newhouse
While the author of this well written piece was arguing the all-to-real social challenges of the day, I find the reality she has presented in this paragraph is perfectly framed. We have come to use mobile and internet technology in ways that did not follow a rational path but found tremendous “value” in this new way of living. However, is this addictive path with its massive populations of followers, added to the basic nature of human momentum, going to change ?
Let’s focus on a topic more specific to the use of mobile Internet technology - GIG employment. Are we destined to move the employment model entirely into the GIG Economy ?
Covid-19 has opened the barn door. Physical health issues aside, change to the entire economic and social model is on the table and under discussion 24 hours a day. Many businesses have met the Covid challenge with adjustments, more adjustments, and further adjustments. But the stress on many businesses, particularly small and medium sized, is noticeable.
The warts are exposed. Hard decisions have been made and these temporary changes have forced business owners to adjust their operations and manage these financial risks or peril as a result of inaction. Everything is up for review. Large expense items including workforce, commercial facilities, transportation, raw materials… everything. Manage the nickels and dimes. Who will invest in the restaurant sector in the future ? What about commercial office space ? Who will risk long-term debt to finance assets ? Everything is risky because politically driven lock-downs of various versions can immediately decimate businesses and people’s lives. A million questions are out there. No transparency is on the horizon.
It is very clear however that this will dramatically change the employment market. The costs and risks associated with staffing a business with full-time employees are front and center with business owners. Business owners are forced to select options that reduce financial risk, and workforce management is more often than not the largest expense item on their P+L.
Independent Contracting of professional services became front-page news in the late 1990’s as the Y2K computer threat wreaked havoc on everyone. The world was going to end at the stroke of 12. Well, I worked on that initiative and we hired a lot of contract programmers. Regression testing post midnight found one minor issue in 750+ systems…great work. Pop the champagne.
What happened to all the programmers in February 2000 ? Well, we kept many but reduced the numbers considerably. Contracts provided that flexibility. Those on contract understood. Not a problem. They all found work elsewhere as the Internet Boom was still hiring, albeit at a different rate after the Dot-Com Bubble burst. It was quite a competition for resources in those days. Employers had to pay.
Well, the innovation continued and the GIG Economy has not only emerged but is now significant. The commercial numbers are now measured and reported annually by both industry and governments. That is proof of its importance and for the time being - sustainability. And it has now made its way from its personal service industry roots into the professional sector.
Look up Marketing, Accounting, Engineering, and other professions and you will find examples of how consultants who operate via contracts have brought their businesses into the GIG Economy platform. Work and workers demand flexibility and they must compete.
I will make the argument that Covid has forced businesses to consider this method of employment more seriously and accelerated its validity. Finance 101 states that you should match debt to the life of the asset so why not match employment to the work requirements ? Why not manage the financial risk in this manner ? For non-strategic short-term initiatives it makes perfect sense.
Piecework 201x – 2050. GIG Employment is the future.
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