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In the Future, Employees Won’t Exist

 

http://techcrunch.com/2015/06/13/in-the-future-employees-wont-exist/?ncid=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29&utm_content=FaceBook#.nfnn6x:5LgmContract work is becoming the new normal.Consider Uber: The ride-sharing startup has 160,000 contractors, but just 2,000 employees. Handy, Eaze and Luxe are just a few of the latest entrants into the “1099 Economy”. Though they get the most attention, its not just on-demand companies that employ significant contract workforces. Microsoft has nearly two-thirds as many contractors as full-time employees.

Four trends are converging to make contracting more attractive for both employers and workers, and reshaping how businesses and employees look at the traditional full-time model.

Pick A Platform, Find Customers

Historically, contractors have needed serious hustle to get referrals, early customers, and a stream of repeat business. For local services, platforms such as Homejoy and Handy upend that dynamic. These platforms take on much of the marketing, job finding, payment and management costs necessary to run a small business.

Shifting Preferences

The people entering the workforce today value flexibility and autonomy; they choose location over career and job rotation over promotions. According to the Bureau of Labor Statistics, the average 55-year-old spends 10 years on a job while the typical 25-year-old spends three. This younger cohort will even choose flexible schedules and remote work over increases in salary. The idea of lifelong employment with a pension no longer applies (and those pensions aren’t sticking around, either).

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A Healthcare Safety Net

People are terrified of losing their health benefits — and rightly so. The risks of going without health insurance are high — a single accident could be financially catastrophic. Therefore, many would-be entrepreneurs delay leaving their employers.

The Affordable Care Act (ACA) is changing that. Contractors can go to their state’s marketplace and apply for coverage. They don’t need to be dependent on an employer for that benefit. “The ACA is a good thing for independent workers, especially those with low-to-moderate incomes,” says Steve King, a leading researcher on the future of work with Emergent Research. “It will lead to more people becoming independent and fewer independent workers without health insurance.”

Protection For Contractors

It’s not all sunshine and roses. Contractors don’t have many of the legal protections that employees have — they’re vulnerable, wages can be suppressed and individuals can become little more than cogs in the machine.

Fortunately, dozens of services are popping up to fill this void and support the growing contractor class. Freelancer’s Union offers insurance tailored to the needs of independent workers. Peers.org provides a community to better understand what wages contractors can expect to make. QuickBooks Self-Employed offers financial and tax tools. And there are even digital nomad communities popping up around the globe for those who don’t need to be tethered to one spot and apps like Teleport to help contractors find them.

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The Future Of The Workforce

Technology platforms make it easier for contractors to get customers or work from around the globe. Health coverage can be acquired. Communities and tools exist to help contractors get the most out of their finances. That’s why it’s projected that over 40 percent of the workforce will consist of contractors just five years from now.

The implications are profound. This shift will cause discomfort and dislocation as all shifts do. But, in the long-term, as the support scaffolding for both businesses and workers is put in place, a more dynamic economy will emerge.

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