When Human Resources professionals around the world were asked about the makeup of their staff in the next 5-10 years they consistently predicted only 50 percent would be permanent employees. The other 50 percent would be contract, gig, temporary, or any other name we use for “not on our payroll.”
Why this tsunami of change in the makeup of our staffs? This is truly revolutionary from HR’s perspective. What should we be done differently now to prepare for it? Why is it happening? How should job seekers, both looking for jobs and those who think they are permanent employees, be reacting right now?
At Manpower we are always telling our customers that staffing is a three-legged stool. The legs on the stool are “speed, cost, and quality.” But the reality is you get a two-legged stool. You get two of the three. So make your choice, you cannot have all three. Higher costs come with quality and speed. If you keep your speed but lower costs, you risk low quality.
Why the move to such a high percent of a firm’s staff being temporaries of one form or another? The need for profound flexibility, lower employee costs, and the variety of talent required. Employers need the flexibility to have the specific talent with the skills they need right now, no earlier and only until the project is finished. We have heard of ‘just-in-time warehousing,’ now we are talking about ‘just-in-time workers’.
Some examples of this are with FedEx and Amazon at Christmastime. They each add hundreds of thousands of employees slowly, over a period of months, building up to their panic time right at Christmas. Then they quickly peel them off as the need subsides… back to normal. They fill-in with temporaries when needed. Easily, this could be the 50 percent of employees that are staff and the other 50 percent that are seasonal.
Google and Facebook are phenomenal success stories. They were the first to use patented technology to establish huge businesses that are immensely profitable. They were and still are for now able to offer extremely generous benefit packages to attract the right skills. But imitators are just catching up with them, competing for their share of market. So how do they continue to pay generous benefits while staying profitable? They cut down on permanent employees and ramp up the use of contract workers. They get them fast through staffing firms. While in the short run the company may spend more on hourly pay, the benefits to employees are minimal, and the commitment is short term. There’s no concern about how to keep workers busy when their projects ends.
This all comes together when we realize that over the past 20 years, we have been developing a workforce that appreciates flexibility and variety, as much as employers do. Mothers and fathers now want to leave the job market for a period of time when a new child is brought into the home. Young people work for a while and then leave to go back to school. Stay at home parents only want to work in the summers, only not in the summers, or only seasonally in certain industries. The most recent research shows that the average permanent job is slightly over four years. For the often maligned millennials, it is slightly over two years! It seems we want to the enter and leave the job market when it fits our needs, just like businesses do.
So if you are currently employed, keep yourself educated, energized, flexible and motivated and you should be in the 50 percent that can become permanent employees. Those of you entering the workforce, make sure your skills and talents are in demand and keep them that way. Lifelong learning is not a phrase – it is the new way of life, whether you want to be permanent or temporary.
Remember we all have a career coach and it needs to be us!