Small Business Labs

Why Traditional Jobs are Becoming More Like Freelancing

The COVID-19 pandemic has accelerated a longer-term trend toward firms offering freelance-like flexibility and other benefits to at least some of their employees. 

Two trends are the main drivers of this shift. 

1. Workers are reevaluating what they want from work

The pandemic has caused people to rethink their jobs, personal interests, and how work fits into their larger life goals. And many want more work autonomy, control, and flexibility - attributes associated with freelancing and other forms of independent work.

Also, traditional jobs have lost one of their key selling points. Workers no longer see them as being as secure as they used to be.

This also is leading workers to prioritize work that fits their values and allows more control over how, where, and when they work - including the ability to work remotely - instead of focusing on job security.

And companies are responding. 

A great example is Unilever's U-Work program, which the company describes as:

"U-Work gives employees the freedom and flexibility associated with contract roles with the security and benefits typically linked to permanent positions... People in U-Work don't have a fixed role. They work on varying assignments and, between assignments, are free to do other things that are important to them. "

While programs as extensive as U-Work are rare, many firms are increasingly incorporating some of these features to improve their employee value proposition and attract and retain talent.

2. Work is being taskified and projectized

While not a new trend, the taskification of work has been accelerated by the pandemic. The new book Work Without Jobs describes this as "deconstructing jobs into their component parts and reconstructs these components into more optimal combinations that reflect the skills and abilities of individual workers."

This taskification of jobs leads to greater workforce agility and flexibility, which is growing in importance due to the pace of change and competitive pressures. 

Taskification also results in more project-based roles instead of the steady, regular, ongoing employee roles of the past. And these new project-based roles look a lot like freelancing.

Companies are even building internal employee gig marketplaces. The internal gig talent marketplace company Gloat describes these marketplaces as:

"... the internal talent marketplace is a two-sided platform that harnesses the power of AI to align employees (and their skills) to projects, gigs, mentorships, and full-time roles within their organization."

This is much like the descriptions provided by online freelance marketplaces like Fiverr, Upwork, and others to describe their services.

So, in essence, internal gig marketplaces turn traditional employees into employee freelancers - at least part of the time.  

Over the past couple of decades, many traditional jobs took on some of the negatives associated with freelancing - they became less secure, with reduced benefits and less predictable schedules and income.  

But labor shortages, coupled with the trends described above, are leading companies to increasingly provide traditional jobholders with the benefits of freelancing instead of just the negatives.

An important point to note is this shift mostly applies to knowledge workers, and especially those with specialized skills.  So not everyone is seeing the benefits of this shift.

But one group that is especially benefitting is retirement age workers, who especially like the flexibility, autonomy and control - and extra income - freelancing provides.

For more on the advantages of freelancing for retirement age workers, see TopTal's Redefining Retirement: The Benefits of Freelancing After 60.  

The New Migrant Workers: "Workampers", "Vanlifers" and Digital Nomads

The nature of migrant work is rapidly changing. A combination of technological enablement coupled with social, demographic and economic shifts is resulting in growing numbers of migrant workers. 

But these new migrants aren't like the old ones. The new migrants are often choosing this as a lifestyle or doing it to supplement their retirement.

One segment of the new migrants are called "workampers". According to Workamper.news, "workampers" are:

1. Adventuresome individuals, couples and families who have chosen a wonderful lifestyle that combines ANY kind of part-time or full-time work with RV camping.

2. Person working as an employee, operating a business, or donating their time as a volunteer - while sleeping in an RV or on-site housing.

In other words, workampers are a form of migrant workers that travel around in RVs funding their travels with some form of work. 

Mostly older, workampers are often workamping to fund or augment their retirement.

The Washington Post's The new reality of old age in America covers the growing workamper trend, but does so in a less positive light than Workamper.news. Key quote:

... many older workers are hitting the road as work campers — also called “workampers” — those who shed costly lifestyles, purchase RVs and travel the nation picking up seasonal jobs that typically offer hourly wages and few or no benefits.

According to the article, many are doing this to shore up their retirement finances:

... millions of others are entering their golden years with alarmingly fragile finances. Fundamental changes in the U.S. retirement system have shifted responsibility for saving from the employer to the worker, exacerbating the nation’s rich-poor divide. Two recent recessions have devastated personal savings. And at a time when 10,000 baby boomers are turning 65 every day, Social Security benefits have lost about a third of their purchasing power since 2000.

As the article chart below shows, many older Americans are reliant on social security for income. This makes picking up part-time or seasonal work a good way to add to retirement income.

The workamper trend is strong enough that Amazon even has a specific program for these people.

Called "CamperForce", it's targeted at workampers who want work the 3-4 month Christmas holiday season at warehouses in Kentucky. Amazon's website makes it sound pretty good:

Amazon offers great pay, a paid completion bonus, paid referral bonuses, and paid campsites for its CamperForce associates. Along with the chance to build lasting relationships with your coworkers, the CamperForce Program also provides the following benefits:

• Paid campsites
• Paid good wages, with time and a half for overtime, plus shift differential
• Paid completion bonus when you work until Dec 23rd
• Paid referral bonuses

We've long covered the growing trend towards more older Americans working past the traditional retirement age. Some do it because they want to; others because they have to. 

The Washington Post does an excellent job chronicling the problems and issues of the growing number of older Americans who are workamping because they have to to survive financially.

But a lot of workampers are doing it because they want to and enjoy traveling around in an RV. For these people, workamping can be the "a wonderful lifestyle" described by Workamper.news. 

BTW, this is not say younger Americans, and especially millennials, aren't also pursuing nomadic work. They are. 

It's just that younger Americans prefer global roaming to places like Bali or travel in vans instead of RVs.

Migrant millennials are mostly digital nomads. 

These are people with a location-independent lifestyle that allows them to work anywhere in the world there is a good Internet connection. Think programmers, designers, writers, marekters, etc. 

One of the more interesting digital nomad sub-segments are those choosing to tour in vans. These folks are much like workampers, except they drive around in vans and most have digital occupations.

The term for this is "vanlife", and entering the very popular hashtag #Vanlife on pretty much any social sharing site will provide lots of entries on people traveling and working in vans.

Also Time's #VANLIFE: THE (ARTISANAL) AMERICAN ROAD TRIP nicely covers this lifestyle choice. 

We've been following the growth of mobile and distributed work and digital nomads for about a decade. These trends just keep getting more interesting and It's clear the number of new migrants is going to continue to grow. 

Multi-Level Marketing and the Need for Highly Flexible Jobs and Supplemental Income

Despite a very robust jobs market, the need for highly flexible part-time jobs and supplemental income continues to grow.

An example of this is the continued growth of the multi-level marketing industry.

According to their trade association, the Direct Sellers Industry Association (DSA), 5.3 million Americans are what they call "business builders". These are people actively managing and selling products to a customer base (think Avon, Mary Kay, Arbonne, Herbalife, etc.).

Another 15 million are also involved and may do some selling, but aren't active sellers (the DSA says they're discount customers, which likely isn't accurate for many of them). 

All are independent workers. 

On Point Radio, one of our favorite radio shows, recently covered the industry. The show's title, The Perils of Multi-Level Marketing Programs, makes it clear they aren't real positive about it. 

The show is based on a Quartz article that also isn't positive. Key quote from Quartz's Multilevel-marketing companies like LuLaRoe are forcing people into debt and psychological crisis:

 "When glitzy recruitment videos yield to the reality of suburban cul-de-sacs, people selling for MLMs can be plunged into debt and psychological crisis."

The show and Quartz article focus on the downsides of multi-level marketing programs. And there are many downsides.

But they missed several important points.

First, not everyone is cut out to work in multi-level marketing.

These are challenging direct selling jobs and most people don't have the skills or temperament to be successful in this field. Because of this, as both the article and the show point out, many people aren't.

But those that have these skills and attributes can be successful.

This is why the satisfaction rate among multi-level marketing participants is quite high - 77% report being satisfied or highly satisfied.  This is clearly inflated due to survivor bias. But it's still pretty high.

This point was made by several callers on the radio show, but dismissed by the show's guests. 

The second point is the multi-level marketing industry is able to attract so many people is because there is a lot of demand for low friction, highly flexible, part-time work to supplement incomes. 

As the chart above shows, the vast majority of people working in multi-level marketing do so part-time. 

The growing need for supplemental income is due to many factors - wage stagnation, income inequality, job shifts, outsourcing, under employment, high childcare costs, high health care costs, etc. - and these factors aren't going away. 

Because of these issues, people are turning to part-time work to supplement their income and improve their financial stability. 

The good news is technology has substantially increased the types of flexible, low friction part-time jobs that are available. You no longer need to have the sales skills required of multi-level marketing thanks to the growing options provided by the gig economy. 

This is why we say Uber didn't create the gig economy, the need for a gig economy created Uber.

Study: Workplace Autonomy Increases Job Satisfaction and Well-Being

A recent study by researchers at the University of Birmingham found "that employees with higher levels of autonomy in their work reported positive effects on their overall well-being and higher levels of job satisfaction."

Key quote from Dr. Daniel Wheatley, who led the study:

"Greater levels of control over work tasks and schedule have the potential to generate significant benefits for the employee, which was found to be evident in the levels of reported well-being."

The study also found control over where people work and the associated informal work flexibility also add to job satisfaction. Again from Wheatley:

‘The positive effects associated with informal flexibility and working at home, offer further support to the suggestion that schedule control is highly valued and important to employees “enjoying” work.’

As regular readers know, work autonomy, control and flexibility are the key reasons people enjoy being independent workers/self-employed.

Key quote from our 2013 article Autonomy, Control and Self-Employment Satisfaction:

... those who create, manage and control their own work assignments, work place and schedules - "Job Makers" - reported very high levels of satisfaction (86% satisfied or highly satisfied)  ... few (less than 5%) would prefer having a traditional and almost all plan to continue as independent workers."

In other words, independent workers with autonomy and control are highly satisfied and like their work.

These findings are reinforced by data from the 2017 MBO Partners State of Independence study. Key quote:

Even though independent work has its challenges, the ability to have greater control and flexibility far outweighs the hurdles of working solo. Among all independents, 77 percent say they are happier working on their own than in a traditional job ... A solid majority—64 percent of all independents and 70 percent of Full Time Independents—said working on their own is better for their health.

Employment in the gig economy can be good or bad. 

Gig workers who feel they don't have control over their careers, work assignments, work place, or work schedules tend to not like it and would prefer a traditional job. 

But the those that do have work autonomy, control and flexibility are highly satisfied and generally prefer independent work over having a traditional job.

The good news is the majority of those working in the gig economy feel they have work autonomy, control and flexibility.

Direct Selling Industry Employs More People Than the Online Gig Economy Platforms

According to the Direct Selling Association (DSA), 20.5 million Americans were involved in direct selling in 2016.

Of those, 5.3 million are what the DSA calls "business builders". These are people actively managing and selling products to a customer base (think Avon, Mary Kay, etc.).

While the other 15.2 million may do some selling, they are mostly involved to get the product discounts that come with signing up as a seller. 

The 2016 Intuit On-Demand Workforce study found that about 3.9 million Americans work for online on-demand platforms and marketplaces like Uber, Lyft and Upwork. 

So direct selling employs more Americans than the online platforms and marketplaces.

Direct selling, also called multi-level marketing, is obviously not new - as the Avon ad from the early 1960's below shows. 

              

Like online on-demand work, direct selling provides a low friction, highly flexible way to earn supplemental income.

And also like on-demand work, most direct sellers are part-time (85%) with their main motivations being supplemental income and the work flexibility direct selling provides. 

The one major difference between those working as direct sellers versus those working for on-demand platforms is demographic. 74% of direct sellers are women, while only about 44% of those working in the online, on-demand economy are. 

The main reason for this is many of the products sold by direct sellers are targeted at women. This goes back to the early days of the direct selling industry in the late 1950's and early 60's. At that time the industry specifically targeted women as the market and women as sellers.

They did this because it was believed men would be too busy with full-time jobs to be good sellers. Also, because they weren't home during the day, the industry believed men wouldn't be a good market for products sold via direct sellers.

These views are now out of date, but most direct selling companies continue to target women. 

And they continue to stress work flexibility as key reason to be a direct seller. The video clip below, from Austin's KUVE television station, nicely explains the appeal of direct selling for those caring for kids.

The direct selling industry long ago discovered there is demand for highly flexible, low friction work. But to participate in direct selling you need to have the skills, interest and willingness to be a salesperson.

Obviously many people do not have these, but still have the need for highly flexible work.

The on-demand gig economy platforms like Uber, Lyft and others figured this out. 

We often read about or hear that Uber and the other online on-demand platforms invented the gig economy. 

As we pointed out in our post Uber Didn't Create the Gig Economy, the Gig Economy Created Uber, this view is not correct.

The need for highly flexible, low friction work has been around probably as long as work has. New technologies allowed the platforms to tap into this need. 

Disclosure: Intuit is an Emergent Research (that's us) client. 

The Business of Work/Life Integration

A growing number of firms are offering services and products based on the trend towards work/life integration. This is the shift towards work, home and life becoming increasingly blended.  

An interesting example comes from the popular dating site Bumble (tagline: Find Your Honey). They are opening a pop-up community center in New York not surprisingly called The Hive. 

It's part of Bumble's plan to expand beyond dating and help users in their professional lives.

As the Bumble chart below shows, the planned activities at The Hive blend professional and social events.

    

This trend towards work/life integration is very apparent in our coworking research.

This shows that while coworking spaces are workspaces, they are also places where members socialize together. 

In fact, our findings indicate that most coworking members consider the social side of coworking to be at least as important as the work side. 

The blending of work and life is leading to growing numbers of services, places and activities that also blend work and life.

We see this shift in much of work:

• digital nomads are blending work and life in their quest to become "temporary locals".
• "Bleisure" travel" and "bizcations" have become more popular as people combine work and pleasure travel. 
• We consistently hear about work/life flexibility and integration as a reason people choose to be self-employed and small business owners.
• Corporations are exploring how to promote employee "wholeness", another term for work/life integration

None of this is a new. 

New York University sociologist Dalton Conley coined the term "weisure world" about a decade ago to describe this shift.  

According to Conley, activities and social spaces are becoming work-play ambiguous and work and personal time are blurring together.

The 2013 Harvard Business Review article Work-Life Balance Isn't the Point nicely covers this shift. Key quote:

... work and personal life should be allies and that participation in multiple roles, such as parent, partner, friend, employee, can actually enhance physical and psychological well-being — especially when all of the roles are high quality and managed together.

The shift towards work/life integration shows no signs of slowing down.

Expect to see more products and services designed for this market. 

Defining and Achieving Small Business Success

Defining and Achieving Small Business Success is a new study we recently conducted in partnership with the sales and marketing automation company Infusionsoft. 

The study consisted of a survey of over 400 small business owners coupled with a set of 26 in-depth interviews with "successful" business owners. These are small business owners who told us they were meeting or exceeding their business goals and objectives and self-described their business as "successful".

One of the key findings is that most small business owners are largely motivated to work in a field or discipline they enjoy and/or by being their own boss.

Few are motivated by or interested in want building a large business and even fewer are solely motivated by financial rewards. 

We've long studied how small business owners define and achieve success and this finding fits with our past work. 

In 2007 and 2008 we did a series of focus groups with small business owners on this topic. We found that most small business owners aren't motivated by or interested in growing their firms into big businesses.   

A variety of other studies have found the same thing. Wealth, Tastes and Entrepreneurial Choice, a 2015 academic study on this topic, is a good example and references a number of related studies. 

But despite this research, the vast majority of people believed then and still believe now that most small businesses want to grow and become big businesses.

This belief is driven mostly by the vast amount of media coverage high growth small businesses and their owners get. 

But as our 2010 research project showed, high growth entrepreneurs are very different motivationally than traditional small business owners. But because the high growth folks get a lot of press, people tend to think all small business owners are like them.

So just as our 2007-2008 study findings were surprising to most people, so too are these findings (or at least that's the feedback so far). 

It's even surprising to a lot of small business owners.  Many small business owners tell us they consider themselves an outlier because they aren't interested in growing into a big business. They often are surprised when we tell them this attitude is common.  

It also makes them happy to learn their goals for their business and definition of success is shared by most other small business owners.

This is not to say small business owners don't want to grow at all. Nor are we saying small business don't care about making money.  

Most do want to grow - 76% of those surveyed and 71% of those interviewed reported having a growth goal - and almost all (over 90%) have explicit financial targets. 

But in most cases the growth goal is modest and the financial targets important but secondary to other objectives. See the report for more on this. 

We'll have more on this study over the next couple of weeks, including a finding that surprised us so much we didn't believe it at first, still aren't sure about, and plan to study more deeply going forward. 

This is the growing role small business coaches and coaching are playing.

Jobbatical Raises $2 Million to Democratize Expat Assignments

Jobbatical is a startup online talent marketplace that connects people looking for short term experiences combining work and travel with global employers offering short term gigs. Their tagline is:

Travel. Work. See the world. Connecting talented professionals with inspiring career adventures at startups around the globe.

In other words, they provide access to expat assignments. 

In the past expat assignments mostly went to a small number of employees at large corporations. Jobbatical is creating a marketplace that democratizes access to these jobs.

The company just raised $2 million in venture funding from powerhouse early stage VC Union Square Ventures and others. Key quote from USV on how they see the opportunity:

The specific opportunity here is an interesting one: the rapid global shift towards internet-based businesses made tech startups a strategic priority for dozens of countries around the world and venture investors are putting more capital to work in increasingly diverse geographies. So the number of properly capitalized tech companies outside of gravity centers like San Francisco, New York and London is skyrocketing but the bulk of talent remains concentrated in these saturated locations (or looking to move there).

Jobbatical is redistributing that talent more evenly around the world with a proposition that’s as daring as it is reassuring: work elsewhere – anywhere – for a year. It’s a simple message that has earned the company a talent pool of over 30,000 people looking to take jobbaticals and over 1,200 companies in 40+ countries looking to hire them.

Another interesting angle comes from another of Jobbatical's investors. Key quote from a Tech Crunch article on the funding (which playfully includes "catch me if you can" in the article's URL):

“The world of work is changing fast, and Karoli’s vision of millions of people one day soon taking 7-to-10 ‘Jobbaticals’ over 10 years, instead of working a single job over the same period, is one we wholeheartedly share,” he says.

We've covered the digital nomad trend and jobbatical in prior posts and there's clearly a rapidly growing number of people who want to travel and work outside of their home country. 

We often read in the press dire predictions about the future of work. And there are definitely reasons to be concerned.

But the rapidly changing world of work is also creating an array of new opportunities and Jobbatical is an exciting example.

Toxic Work, Freedom and Why More People are Choosing Freelancing

The New York Time's article A Toxic Work World nicely summarizes the growing Darwinian nature of traditional jobs. Key quote:

FOR many Americans, life has become all competition all the time. Workers across the socioeconomic spectrum, from hotel housekeepers to surgeons, have stories about toiling 12- to 16-hour days (often without overtime pay) and experiencing anxiety attacks and exhaustion. Public health experts have begun talking about stress as an epidemic.

The people who can compete and succeed in this culture are an ever-narrower slice of American society: largely young people who are healthy, and wealthy enough not to have to care for family members. 

The article's author suggest a number of policy and legal changes to make it work easier and more flexible. But the article points out getting new laws and policies passed and implemented will not happen quickly or easily.

Interestingly enough, the article did not mention the millions of people who are choosing to become independent workers because so many traditional jobs have become toxic. 

Over the past couple of weeks we covered how people choose between traditional jobs and independent work and how Darwinian work environments lead more people to choose independence.

It's something we constantly find in our research - people want work autonomy, control and flexibility and are turning to independent work in growing numbers to get it.

This is rarely covered in the media, which instead is focused on criticizing on-demand economy work. 

But there are some exceptions. 

The Huffington Post's Wealth and Freedom: The New Definition of Rich covers the growing importance people are placing on flexibility and schedule control. Key quote:

Being "rich" is no longer solely defined by how much money you make. Today, freedom is valued nearly as much as income. For a growing part of the workforce, making hundreds of thousands of dollars a year while working 60-80 hours a week isn't a worthy trade-off. In fact, many people turn to entrepreneurship for exactly this reason: they want the opportunity to make big bucks while maintaining control over their own schedules. 

The article points out going independent is not easy. But compared with toxic work environments, it's often well worth it.

Uber Study - Drivers Satisfied, Like the Flexibility

Uber released a survey of their drivers last week.  As with all things Uber, it's being widely covered. The key findings, at least from my perspective, are:

• 78% of Uber drivers are satisfied with their experience driving for Uber.
• 74% reported Uber has made their lives better by giving them more flexibility with their schedule.
• 81% of the drivers work part-time as Uber drivers
• As of December 2014, Uber had 162,037 active drivers on its platform.

Not surprisingly, the satisfaction numbers echo the what we've consistently found in the many years we've been studying independent workers (freelancers, independent consultants, etc.) - independent workers like being independent.

And as we have reported many times, most like being independent because it provides work autonomy, control and flexibility. Uber drivers agree.

There are many articles on the study, including:

The Atlantic has my favorite article, mostly because it points out how small Uber and the sharing economy are relative to the U.S. economy. Key quote:

About 160,000 drivers have fired up Uber on their phone since 2012. That's less than one month's net job creation. It's about 0.1 percent of the workforce. It is a rounding error. 

Business Insider provides a pretty good summary of the key data.

Slate provides a good overview and a good look at Uber driver earnings data.

New Republic is surprisingly positive about the study, the results and independent work.

Newsweek attacked the survey methodology, which I think is unfair. All surveys have issues and problems. But overall the methods used in this survey look sound.