Defend Truth


Employment: Make Peace with the Gig Economy

Johann Redelinghuys is previously founder and chairman of Heidrick & Struggles South Africa, now The Director of the Chairman's Institute and of Portfolio&Co

You think after school you’ll go to university, get a good degree and impress some potential employer. There will be mutual respect, you’ll stay with the company for the rest of your life and head off into a sunny, secure retirement. Right? Wrong.

We all wish the country could offer full employment with proper permanent jobs, security and benefits for all. We all know that jobs create a vibrant economy, peace and stability. In most parts of the world a valiant fight against the unemployment bear is being raged, and mostly being lost.

Politicians and business leaders are doing their best to create jobs, but they’re having a hard time keeping up with the demand. People don’t just want employment. They want proper employment. They want permanence, security and benefits.

Most still want to join a good firm and, through loyalty and devotion, be rewarded by upward movement on the corporate ladder, hoping for a charmed life in the executive suite.

Let’s call this the corporate citizen, CC, who gains entry to the company by having a good CV and then joining the firm, where it will be decided by others higher up in the hierarchy how his or her career will play out.

En route there is medical cover, group life insurance, a pension scheme, membership of the country club and maybe some share options. All of it finding resolution one day, sailing into the sunset.

While many of us understand that the CC working culture is now the privilege for a decreasing number of people, most still long for it and somehow cannot come to terms with the new reality, which is dominated by short-termism, project-based contract employment with no future-focused security and none of the old-style “perks”.’

Short-term contract employment used to be only for the lower orders. People became “temps” while they looked for a permanent job. On the outer fringes, musicians, writers and people like artists or web-designers always did short-term “gigs”.

Now, suddenly, it has become mainstream. Well-qualified lawyers, accountants, medical specialists and many others from political lobbyists to turn-around business executives are doing freelancing. They have become self-employed in the “gig-economy”. People who were the cannon fodder of “corporate citizenry” in the past, the classic CCs, are suddenly working on contract.

But there is more. This self-employment gig-mode is taking on an international dimension, especially in some troubled economies. The website Elance has found that more freelancers in Greece and Spain are finding their feet again through freelancing on the web. Quoting Forbes: “Earnings from freelancers have jumped by 122% in Greece and 142% in Spain, in the past year”

We keep hearing how entrepreneurship and the establishment of small businesses will save the economy. At the same time we note from the World Bank report that South Africa is one of the more difficult countries in the world in which to do business and start a company. Is exporting our skills electronically one way of finding a new avenue to make a living?

Going offshore and exporting skills is of course not new. Call centres have been doing it for years. Ireland, when it was still down-at-heel, did the overnight telexed administration of insurance claims for New York Insurers many years ago. Turkish guest workers kept the German economy on the road. The Philippines have exported domestic workers that have educated and fed children all over the world. Our own mining industry has relied for most of its existence on short-term contract workers from neighbouring countries.

The angst that is felt about short-term contract work is that there is no longer an obligation on the part of the employer to be fair and reasonable. Long-term reciprocal loyalty and the mutual support between employers and employees is, as we know, no longer the standard.

The huge Wall Street sit-ins and protests in many other countries from Madrid to Athens, against exploitation by the “greedy capitalists” are evidence that people have a longing for “decent work” and for “decent pay”. They are fighting a losing battle.

In South Africa, the vigorous media noise about the massive rejection of e-tolling has blurred the equally significant protest against labour brokers. The complaint is that they exploit the workers and create “human trafficking”

If nobody supports exploitation or unfair labour practices, the truth is that businesses don’t want to have large numbers of people on their balance sheets and it is likely that short-term labouring, organised by brokers, will stay – hopefully in a more reasonable and less abusive format.

So how does one make a living and prepare for a life in the gig economy? Not by protesting and hoping that a corporate citizen culture can be recaptured. Those days are past. Instead of polishing a CV with details of your schools, university, that you were the head prefect and played in the first sports teams, in the hope of refuge in some job in a respected firm, burnish your unique skill-offering for self-employment.

It’s not so much about what a nice person you are and how well bred, but what precisely you can deliver. The best advice is to become a specialist and to be highly focused in a particular area. Develop a prized skill or knowledge base that can be packaged and sold. Look at all those people sitting with their lap-tops in the coffee shops. Take on the assignment, do the job, hand it in, get paid and goodbye.

Even in the legacy businesses, where everyone used to be employed as corporate citizens, there are now all kinds of people working on contract. Some executives who prefer to manage their own medical arrangements and insurance “sell” their services via their own consulting company to the business.

The burgeoning private equity sector employs top level CEOs to turn around a business by increasing its value three times in three years or five times in five years. Longer gigs these, but gigs nonetheless.

It’s not for everybody, but it is for massively increasing numbers, and it’s here to stay. Make peace with the gig economy. DM


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