Small Business Labs

Jinglesmart - Online Project Marketplace for the Jingles Industry

According to Staffing Industry Analysts, the online staffing industry is now about a $1billion dollar industry that's growing at "double-digit" rates. 

The best known of the firms in this industry are probably oDesk and Elance. They provide online platforms freelancers and other independent workers offer their skills and services for limited projects or on-going assignments to organizations large and small looking for workers.  

A wide variety of talent can be hired at oDesk or Elance, everything from computer programmers to virtual assistants to writers.  

But there are a growing number of industry vertical job and project marketplaces springing up. One of the more interesting examples is Jinglesmart, which serves the Jingle industry.  According to their press release:

Jinglesmart is a new online marketplace designed to help jingle writers, jingle producers and freelance musicians in general to get in touch with companies, agencies or individuals in need of commercial jingles, music services or any music project. This new service will allow freelance professionals to reach a larger audience of potential clients, as it is all web based. Even the full service can be completed online, avoiding travel and accommodation expenses, among others, which is a plus for businesses everywhere.

I have to admit everything I know about the Jingles industry I learned from watching the Charlie Sheen version of Two and Half Men.  Based on this, I don't think it's a big industry.

But it's big enough that the folks at Jinglesmart think they can build a business brokering jingle related project online. 

As the online staffing industry continues to grow, we expect to see many more vertical staffing sites. The logic of finding specialists on specialist sites simply makes sense.

The Rise of the Just In Time Workforce

The New York Time's article A Part-Time Life, as Hours Shrink and Shift covers employment changes in the part-time intensive retail industry. 

The article touches on the growing use of scheduling software to optimize the number of employees on site based on anticipated retail traffic.  Basically, these systems allow companies to use "just in time" methods to schedule employees, reducing costs and increasing efficiency.

But as the article points out, a side effect is fewer hours for workers and more varied schedules. 

There's been a lot of discussion about technology and automation replacing jobs. But there's been much less coverage of how technology is changing where, how, when and how often people are working.  

Technology is making it much easier to find, hire and manage workers on a part-time and/or temporary basis. This a key driver behind the growth of the independent workforce. 

There are several really good quotes on some of the side effects of this shift. My favorite is about the advantages of using part-timers who want and/or need more hours than they are getting:

Mr. Flickinger, the retail consultant, said companies benefited from using many part-timers. “It’s almost like sharecropping — if you have a lot of farmers with small plots of land, they work very hard to produce in that limited amount of land,” he said. “Many part-time workers feel a real competition to work hard during their limited hours because they want to impress managers to give them more hours.”

Note to Mr. Flickinger, saying something is good because it's like sharecropping rarely works from a PR perspective. 

There's also an excellent quote on how companies are shifting some of their business risks to their employees:

“We’re seeing more and more that the burden of market fluctuations is being shifted onto the workers, as opposed to the companies absorbing it themselves ..."

This is yet another example of the broader trend of risk management shifting from institutions to individuals. This is a very important trend that doesn't get enough attention. We cover it in more detail in the Intuit 2020 report.

If it seems like the work world is getting more Darwinian, it's because it is. 

Clark Kent Becomes a Freelancer

In the latest issue of the Superman comic book, Clark Kent quits his job at the Daily Planet and is becoming a freelancer. Clark quits because the Daily Planet is acquired by a media conglomerate that cares more about entertainment than hard news.

Kent, who sees his job as an extension of his duties as Superman, doesn't like this.

In a melodramatic outburst in the newsroom he says:

"the Daily Planet no longer stands for the principles of truth, justice and the American way."

As a Policy Mic article points out, "comic books have historically been incredibly in touch with the zeitgeist, so Kent’s resignation is indicative of something bigger present in our society." 

Policy Mic goes on to discuss a loss of faith in media (and institutions in general).

But Kent's decision to become a freelancer also reflects the growing dissatisfaction with traditional employment and signals the coming of age of self-employment.  

After all, if anyone needs the flexibility and control going independent provides it's Kent, who often has to run off and save the world. 

It's also interesting to compare this choice to another freelancing superhero, Spiderman. Poor Peter Parker has always been a hard luck character, and his job as a freelancer was in part meant to highlight his lack of personal success.

 

But times have changed in the many years since Parker started freelancing.  As Superman's move shows, freelancing is no longer viewed negatively.  Instead, it's an attractive work option.

Go Midwest Young Man/Women

Regular readers know I grew up in a small town in Kansas. Despite leaving long ago, I still consider myself a midwestern farm boy at heart.  

So I was very excited to see the Texas Tech study The Rise of the Great Plains. It covers the economic Renaissance happening in the midwest.

The report identifies 3 drivers of this growth:

1. The great plains is taking advantage of rising global demand for commodities, especially food and fuel.

2. Technology is making easier to tap into resources, and also better connecting the Midwest to the rest of the world.

3.  Migration patterns have shifted, resulting in many Plains states showing positive net migration.

Low unemployment rates and lower costs of living are the main reasons for the positive net migration. But the midwest also benefits from a growing number of vibrant urban areas. Cities like Des Moines, Minneapolis, Omaha, Oklahoma City and Tulsa are great places to live.

The Midwest will likely continue to thrive in the coming years. Demand for food and fuel will continue to be strong and the growing reshoring of manufacturing and services will also benefit these states.

Bottom line - if Horace Greeley were alive today he would likely say "Go Midwest young man/women" (Greeley would no doubt be very politically correct if he were alive today).  He might even suggest going to Greeley, Colorado, a growing town of 100,000.  

Newgeography has a nice review of the study, which they coauthored.  

Please Take the 3rd Annual Coworking Survey

Our friends at Deskmag have released the 3rd annual global coworking survey. Last year over 1500 people from 20+ countries filled out the survey.  We'd like even more this year.

So if you work or have worked at coworking space please take 5-10 minutes and fill out the survey.  The data is extremely useful for everyone associated with coworking.  And, of course, Deskmag will be making the results public.

As with past years, we're helping out with this project and will be working on analyzing the data for the U.S. 

Click here to take the survey.

The Rise of Branded Content

The Online Publishers Association's Is Branded Content the Future covers the growing trend towards online media companies allowing sponsors "to publish branded content directly into the main news stream."

As the article points out, this isn't a new idea. Advertorials have been around a long time. But in print publications it was generally very clear what was sponsored content versus real content. Online it's much harder to differentiate between the two.

The article points to Business Insider, Forbes and Quartz (a new site from Atlantic Monthly) as examples of this trend.  

With their business model completely broken, it's no surprise that media companies are turning to branded content to try and drive revenue.

For readers, this means paying even more attention to what you are reading and understanding you may be reading an ad instead of a piece of journalism. The old adage of "buyer beware" needs to be updated to include "reader beware".

Small businesses need to start thinking about how this new content model may fit in their marketing plans. The growth of local and hyperlocal news and information sites means many new potential outlets for content from small businesses.

Tom Foremski from Silicon Valley Watcher has been saying "every company is a media company" for years.  It's clear he's been right.

Chart Shows Why You Should Go To College

I was reviewing some BLS data on wages by sex and educational achievement when I ran across this chart:

A couple of things really hit me:

1. College matters when it comes to wages.

2. People without college degrees have been killed wage wise over the last couple of decades.

3. Women are catching up to men in terms wages across the board.

The chart also shows, in part, why we're forecasting that women will reach wage parity with men around 2020 or so.  

The main reason is the growing disparity in educational outcomes between men and women.  Women currently comprise about 58% of college students and this is expected to grow to 60% by 2019. As women's share of the college educated continues to increase, so will their earnings relative to men.  

The other driver (which is not covered on this chart) is wage disparity between men and women is much lower for younger women than older women.  Urban women in their 20's, on average, even out earn urban men in this age group.

So as older women age out of the workforce over the next decade, the wage gap will fall as they are replaced by educated younger women who are paid roughly the same, or even more, than younger men.

This chart comes from the BLS report Highlights in Women's Earnings in 2009. It has lots of data on the wage gap by age and other data related to this topic, including the interesting fact that part-time women out earn part-time men.

Halloween Going to the Dogs

Regular readers know we love pet trends, especially when they relate to the humanization of pets.

According to an article in Time Magazine "American consumers are expected to collectively spend $370 million on pet costumes this Halloween.

That’s $70 million more than last year, and a 40% increase compared to 2010.

The article goes on to point out that 62% of American homes have pets.  Only about 34% of American households have children.

Oh, by the way total Halloween expenditures this year are expected to reach $8 billion.

Also BTW, the picture on the right is of Chico, our favorite humanized pet. Always a trend setter, Chico's been dressing up for Halloween for years.

The Polarization of Jobs

The Trend is the Cycle: Job Polarization and Jobless Recoveries is an academic paper, but very approachable and well worth reading. The key finding is the job market is becoming more polarized, with job growth becoming concentrated at the high and low wage ends of the spectrum.

The study authors crunched through a mix of government data, breaking jobs into 3 broad categories:

1. Non-routine cognitive jobs: These are managerial, professional and technical workers - in other words highly educated and skilled knowledge workers. These jobs tend to be higher paying.

2. Routine cognitive and manual jobs: These are jobs that are accomplished by following defined processes and procedures. Many clerical and manufacturing jobs fit in this category.  These jobs tend to be good paying, middle class jobs that haven't required high levels of education.

3. Non-routine manual: These are service jobs and include such things as bartenders, home health aides and others that are manual in nature, but require flexibility, problem-solving or human interaction skills. These jobs tend to be relatively low paying.

As the chart below (from the study) shows, over the last 3 decades the percent of jobs that are non-routine cognitive and manual have grown, while the percent of routine jobs have fallen.

  

The good news is the number of high paying knowledge jobs has rapidly grown over the last 3 decades, moving from 29% of jobs to 39%. The bad news is routine jobs - the backbone of the middle class - are going away due to automation and foreign competition.  Their share of jobs has fallen from 58% to 44%.

The other bit of bad news is we will likely continue to lose routine jobs. This hollowing out of middle class jobs is one reason median household incomes have fallen over the last decade.  It's also one of the reasons unemployment and under-employment are so high.

The well known VC Mark Andreesen says these shifts are resulting in two types of jobs: (1) jobs where people tell computers what to do; and (2) jobs where computers tell people what to do.  Needless to say, the jobs where computers tell people what to do are not going to be high paying.

We think the future of jobs is more nuanced than this, but it's a great sound byte.

We'll have more on this in the coming weeks. For those interested in this topic, The Polarization of Job Opportunities in the U.S. Labor Market is another approachable academic paper.  

Are Traditional Jobs Going to Disappear?

The Forbes article In the Future, Nobody Will Have Jobs summarizes the growing view that traditional jobs are going the way of the dinosaurs, replaced by an array of contract workers and automation.

Regular readers know we believe the number of independent workers (freelancers, temps, etc.) is going to continue to grow.

We also agree that the number of businesses that choose to use independent workers over traditional employees is also going to increase.

But we think traditional employment will continue to be common for at least the next couple of decades.

Our reasons are:

1. Talent is becoming increasingly key to business success, and firms will continue to want to secure talent in the core areas of their businesses.

2. Scale of some form is still a key competitive factor in most industries, which is why the Global Giants continue to grow. These firms need the talent scale traditional employment provides.

3. Most people prefer traditional employment to contingent work. This is changing, but for many traditional employment will continue to be more attractive.

4. For people with the right talents and skills, the rewards of traditional employment are increasing. Companies are recognizing that their star performers add enormous value and are increasingly recognizing this with lavish pay, stock packages, bonuses and perks.

The current talent and compensation wars in Silicon Valley are an example of a trend we expect will spread to other industries. Simply put, the big compensation packages being offered in Silicon Valley make employment pretty attractive.  

A couple of related indicators of this are:

 - Firms like Elance, oDesk and MBO Partners - leaders in providing independent workers - have decent numbers of traditional employees.  While they all eat their own dog food and are active users of independent talent, they still see the value in having traditional employees.

 - Hollywood is often cited as the employment model of the future because of their high use of contingent labor. Again, Hollywood firms also have a lot of traditional employees.

Don't get us wrong.  We think the contingent workforce will continue to grow and over the next decade about 50% of the private workforce in the U.S. will be comprised of independent workers.

Our longer term view (say 20-30 years from now)is somewhere between half and two-thirds of workers will be contingent with the rest having employment relationships that would be considered traditional by today's standards.  

So our view is the traditional job will continue to lose share relative to contingent jobs, but won't disappear.