Advanced markets for irregular work

Why support them?

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futureNumbers will remain hazy, but Irregular Work is now all around us. It’s hard to stop; a better model could be key to opportunity and growth.

 

Irregular Work is amorphous, mostly below the radar and outside outcome targets. Why should local governments, Workforce Boards, employment charities, economic development leads or labor ministries support Irregulars rather than just studying the problem further?

Issues like worker classification and portable benefits are national. But beyond those legislative fixes to their safety net, Irregulars still have the same needs as any other worker; stability coupled with individual opportunities to progress. National legislation is unlikely to deliver that.

Here’s five reasons to develop a an active strategy for the local irregular labor market:

 

1)  There are so many Irregular Workers

USDoL2

Official statistics too often measure a 20th Century labor market. “Net growth in employment” is good, but it may have little to do with jobs as traditionally understood. It is increasing non-standard employment that is so often showing up. Definitive data is thin but there have been many studies of fragmented labor markets. A selection of findings:

  • Labor market activity in the “gig” economy will grow by 37% from 2014 to 2025: PwC, Aug. 2014.
  • 11% of Americans have sold in “sharing” economy markets: Time, Jan. 2016
  • 20-30% of the working age population in Europe and the US is now in some form of independent work: McKinsey, October 2016

 

All these surveys anticipate growth. But they can undercount shadow economy activity, arranged off the record. Any study of the “gig” economy is likely to exclude multiple job-holders; citizens juggling several irregular, but formal, employers to try and piece together a living.

However, a crucial missing datapoint is probably: how many people need or want Irregular Work but can’t find it? Anecdotal evidence points to more big numbers. There should finally be official US insights in 2017: Dept. of Labor plans to revive its contingent labor survey in May, GOA is combing data for a report next year.

Impact of disintegrated employment on households? A 2015 survey in Toronto showed precarious workers tend to lose their savings, delay starting relationships, suffer mental health issues, stop voting and withdraw from society as life focuses on a relentless struggle for the next block of work.

 

2) Irregulars fall through current classifications

By “Irregular Worker” we mean anyone seeking hours of ad hoc or top-up work with no contractual expectation of continuation. Commentators often assume the issue of unpredictable work is limited to “1099” workers. That’s misleading.

ManagerSome of the workers with most uncertain hours are corporate employees. A job  can mean a “zero hours” contract. The person may be repeatedly looking for hours elsewhere when not needed.

Crucially, we are rooting for people who work away from a personal computer. This site is not concerned with remote freelancing assignments as enabled by services like PeoplePerHour, Mechanical Turk or Upwork. These are technologically undemanding markets, typically serving reasonably skilled people who can work their own hours at home: web designers, analysts, coders, copywriters. The markets seem to be working well.

Lower-skilled Irregular Workers who have to leave their home to work in a local shop/ cafe/ office/ depot or someone else’s house make up a much bigger, more complex, part of labor markets. These people are often young, disabled or parents. But Irregulars can also be retirees, dislocated workers, migrants or veterans. They often have limited reserves, resources or flexibility. So day-to-day access to employment is vital.

 

Beyond broad-brush statements, Irregulars can’t adequately be categorised by sectors in which they work.  Here’s a sample 100 sectors that can offer ad hoc work opportunities:

Category Sectors 
Formal employmentCateringRetailLeisure industry
HealthcareOffice admin.Security
Food handlersRoofersOn-site researcher
Telesales agentsChicken catchersParking enforcement
Bailiffs/process serversFencingPipe fitters
Market researchPlasterersHospitality staff
DistributionBook-keepingHomecare
Neighbor supportBabysittingStreet wardensDriving lessons
Pet careBeauticians Gardening
CounselingMeal preparationCarer breaks
Home IT supportNutrition advicePersonal shoppers
Environmental clean upsMobility supportCV/resume preparation
Pre/post natal supportPersonal tutorsDecorators
Personal trainersClothing alterationsPet grooming
Furniture assemblyTax preparationLocal deliveries
Carpet cleaningHandmade cardsHouse sitting
LocksmithsMassageDental hygiene
Business supportCrop pickingVehicle valetingVehicle collections
Shoplifters/glaziersDistribution staffMystery shopping
Ad hoc meat processingAd hoc hospitalityAd hoc cleaning
Office equipment servicingFace-to-face translationProfessional witnesses
Property viewingsEvent organisingClassroom assistants
Window cleaningLegal consultationsLeafleting
Tax preparationJanitors Street patrols
Sign writingScaffoldingAlternative medicine
DeliveriesDocument preparationData entry
Travel servicesCar journeys Vehicle repair servicesTour guides
Luggage collection/deliveryPacking servicesHoliday planning
Meet-and-greetChild transportationEat-in-my-home
Invalid supportLaundryCleaning of rentals
Left luggageGolf caddiesChildcare
TranslatorsBike repairAccompanied travel
Market support Market trainingDoorstep currency Couriers
User registrationMarket analysisComputer training
Inventory recordingAggregatorsHolders

Vintage post parcelSome sectors in the table barely exist yet. “Holders” take in neighbors’ possessions that they check out or receive back. You might not be in when someone wants to rent your ladder or deliver your parcel. But a local family might hold it, along with dozens of other people’s possessions and deliveries. It’s a localized alternative to centralized drop-off lockers in stations and shops.

 

 

3) Irregular labor markets are an economic development opportunity

Services businesses typically require more flexibility in headcount than a factory. Services are rising:

Services

 

Within this trend, services are getting more responsive. Start-up enterprises need headcount but can’t afford employees. Sub-sectors with unpredictable staffing needs are booming. Our business climate is increasingly uncertain. Like it or not, this means employers often seek workers who are on-tap rather than on payroll.

Demand in hospitality

How can this demand best be sized? Official breakdowns of employment by sector show the scale of flexible service industries: Healthcare & social assistance (12%), Retail (10.2%), Leisure & Hospitality (9.8%). A conservative estimate suggests a quarter of employment in these sectors will now be flexi. Those people can be hard to find, so companies don’t grow.

Having a motivated, computer-literate, demonstrably reliable, on-hand workforce can aid employer attraction in key sectors. A pool of those people can be inducted then hired from during peak periods. They can also be mined for local trainees and job candidates.

 

Two more indicators show scale of likely need in a local economy:

  • Shadow activity: World Bank data sizes shadow (untaxed, unregulated, under-the-table) activity in OECD countries as upwards from 8% of official GDP. Some researchers see that growing fast. Analysis shows over 75% of this is irregular work: biggest sectors are: building (35%), repairs (32%), household services/childcare (16%) and beauty/hairdressing (14%). Shadow businesses create unfair competition for those playing by the rules. Unable to access investment or loans, they often can’t expand to create stable employment.

Loyalty

  • Unrealized demand: Low quality markets suppress growth. Imagine you run an office move business. A project is running over; if you could get 6 experienced packers this morning you would be back on track.

Budget for extra workers might be justifiable, but the time/ risks/ overheads of sourcing people through agencies or online platforms are prohibitive. So that demand is currently lost. British anti-poverty charity, JRF have endorsed a figure of £100m a day of unmet demand for Irregular Work in the UK. The US equivalent figure would be over $750m a day.

It is defensible to claim: If shadow and latent demand for ad-hoc and top-up workers could be unlocked and enticed into the legitimate economy it would grow local GDP by over 5%. That growth could be directed towards some of the most needy households. They would be likely to re-spend much of it locally.

 

 

4) Irregular Work is the future

Demand for Irregular Workers as a percentage of job openings looks set to grow. Automation looms over blue-collar workers. 48% of jobs could be gone in 20 years according to 2013 analysis. This is likely to push millions more to the labor market margins, scrabbling for bits of work. Some key developments to watch:

  • RobotRobotics: a fast learning, humanoid, automaton called a Baxter can already be owned for $25,000. He can quickly be taught to pack, scan, assemble, sort, deliver or assist clients with tasks.
  • Driverless vehicles: a convenience for professionals, they will be devastating for millions who make a living at the wheel of a bus, truck, tractor or taxi.
  • Drones: Amazon, DHL, FedEx, Google and others are in a race to create the first viable pilotless aircraft for deliveries. Local workers doing drop-offs? History.
  • Voice synthesis: these tools can validate a customer, route a call, despatch a product. Bottom-line benefits over human agents are unarguable.

Irregular assignments can be human workers’ beachhead against the cost savings of automation. When a need for work is predictable and regular it creates a job. But that sort of work is most easily, cost effectively, automated. When unpredictable tasks come and go, full spectrum labor markets can develop a unique selling point. Humans have common sense, empathy, communications skills and limb flexibility that machine intelligence won’t match for decades. Fostering flexible work, and fluid services, plays to those strengths.

 

schedulesinputHowever, many believe Irregular Work should be halted. Initiatives like Fair Scheduling Acts (obliging employers to set rotas weeks ahead) can be controversial. But they recognize the pain caused by unknown shifts. Some corporates have softened their scheduling rules nationwide in response to public backlash.

For anyone forced into Irregular Work at the mercy of a primary employer, fair scheduling must be welcomed. But in this complex market, it’s worth noting some of the incentives created by raising standards for workers:

  • RobotarmThe business case for automation is bolstered by new obligations (costs) attached to human workers.
  • Small employers have a spur to hire off-the-books as regulatory restrictions increase.
  • Labor market rigidity can crimp economic growth.
  • There are millions who need on-the-day availability decisions if they are to work at all. And many who want this level of fluidity. Enforcing rigidity can penalize them.

Protections like fair scheduling also drive the model for new day labor services such as Forge or Staffjoy. They attract pools of aspiring temporary workers who compete to respond to messages each day offering some work. The individuals are not employees so don’t get rotas. These services will argue they fill a need for people who have chosen to work this way. We do not know how many could formerly have been employees.

SURPLUS

However, there are understandable campaigns to legislate against Irregular Work. Their view should not be seen as opposition to improved support for the workers. Illness is a useful metaphor. We recognise arthritis is bad so we both: (a) seek a cure (b) do what we can to ease suffering of those afflicted. Declining to do (b) because it somehow detracts from (a) would be nonsensical. In the case of Irregular Work, one impact of better local support could be case-making data about this new trend which might provoke local legislative controls.

 

 

5) Helping Irregulars helps all workers

stopwatchWorker rights are hemorrhaging in the current shift to Irregular Work. Labor is devalued when investor or employers’ needs are paramount across a broad base of the labor market.

With workers fenced into a series of small markets, denied data or meaningful crossover opportunities to better pay, they have to take whatever work they can. If employers then demand on-tap scheduling, or off-timesheet tasks/costs that push down actual hourly wage, there’s typically little these disjointed workers can do about it.

A conviction that workers can be commoditised, requiring minimal protection or progression, is now being baked into the planning of multiple organisations. This one-sided “efficiency” applied to on-tap labor could undermine more expensive traditional employment relationships.

 

Intervention in this market might focus on structures that push employers to genuinely compete for workers. An impact would be to raise quality in this workforce. Would that kill jobs? Few economists believe so. There is not a finite amount of employment in the economy. Rather, a more efficient labor market can make hiring more attractive across the board.

lumpoflabor

But, in a truly efficient market, won’t employers stop creating jobs and just hire ad hoc labor hour-by hour? It’s unlikely. When a need for work is predictable a good employee is better value than even the best Irregular. Staff don’t have the intermediary and transaction costs of a temp. Plus they retain organizational knowledge and relationships that increase productivity. Support for Irregulars is more likely to grow labor markets on the margins.

WRONGJOBRedressing the balance for Irregular Workers creates options for all workers. When employees stick it out in poorly matched jobs, afraid of taking a leap elsewhere, it’s bad for the economy. If staff are happy to hand in their notice, knowing quality Irregular Work can be a safety net, the power of any employer is balanced by market forces.

 

 

How to help?

Irregulars can be helped in all sorts of ways: Small-scale, relatively high cost, fixes range from anchor employer initiatives through basic computer training and “Digital Divide” solutions to peer support networks. The best chances for Irregulars often come from a micro-entrepreneurship strategy; proactively selling an array of services to householders and businesses. This can be supported with training, brokered introductions or targeted loans to buy equipment. For further details on these kinds of schemes contact us.

But scaling and sustaining initiatives like this will be hard without better infrastructure for this uniquely complex end of labor markets. That infrastructure has to major on self-service; allowing everyone to get on with meeting their needs for themselves. Resulting data on transactions can make all sorts of interventions cost effective to target, administer and monitor.

 

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