Putting Fluid Work on a Solid Platform

This article was originally posted by USC Marshall Center for Effective Organizations

My previous blog described how COVID has accelerated the melting of traditional jobs into more fluid work elements (such as tasks) and melting traditional job holders into more fluid worker capabilities (such as skills).

Fluid work can empower or exploit workers, and COVID and other disruptions have accelerated and starkly illuminated the difference. Will fluid work evolve on a solid platform that offers empowerment rather than exploitation? A solid platform for fluid work can preserve the options that the crises have created for organizations, society and workers. Or, those options may be lost in a race to protect workers by reclassifying them into traditional jobs. Important choices are being made now, often with little or very poor data and evidence.  Those choices are happening within the frameworks of social, regulatory and policy actions, accelerated by today’s disruptions.

We might expect leaders to be tempted to “wait and see,” but 76% of CEOs surveyed by KPMG in early 2020 claimed a personal responsibility to be a leader for change on societal issues – and the same CEO survey showed “talent risk” rising from twelfth-ranked in January 2020 to the top-ranked risk in October 2020. This is an opportune moment for leaders to embrace the lessons and opportunities available only now, to shape how society defines future platforms for fluid work – so that they empower rather than exploit, they are based on better data and evidence, and they preserve and expand options for workers, organizations and society.

Question #1: What are the new and important lessons being learned and experienced now, due to the crisis?

Lesson #1: Fluid work can be exploitive or empowering, through choices of society, workers and organization leaders

Fluid work has been vital to the COVID response, but the pandemic has also revealed devastating effects on gig workers. One survey found almost 70% of gig workers reporting having no income, only 23% had money saved, and 89% were looking for a new income source. Over half said they had lost their jobs, and more than a quarter had their hours cut. The pandemic has highlighted how frequently gig workers lack protections that often come with a traditional job, such as health insurance and liability protection, making the risks more apparent than before. Yet, surveys of platform workers (mostly before COVID) showed that they can be happier than regular employees. My research review  with Wayne Cascio, suggested that contract workers can be more motivated and engaged than regular employees, if they freely choose their work arrangement, and feel a psychological connection to their colleagues.

Choices being made now, within and outside your organization, will significantly determine whether fluid work empowers or exploits, and whether fluid work options survive the crisis.

For example, consider your own organization’s accelerated transition to remote work. Many workers welcome the new flexibility in work time and location, are more productive, and have little desire to go back to full-time on-site work. Yet remote workers also face burnout, work-home conflict, isolation, and a desire to return to the rewards of face-to-face contact. These same paradoxes are playing out beyond your own organization, and across the global work ecosystem, as it melts many traditional jobs into fluid work.

Lesson #2: Better decisions require improved definitions, measures and understanding of fluid work

Better data about the extent, meaning and effects of fluid work would support better decisions.

The U.S. typically classifies workers either as “employees” or “contractors, but COVID has blurred those distinctions. The CARES Act allowed States to use Federal funds to assist self-employed and freelance or contract workers. The important role of gig workers during the shutdown has pushed some companies to provide gig workers with certain benefits—like employer-provided paid sick leave, a child care stipend, and personal protective equipment—that seemed out of reach for workers before the crisis. Will that require employers to reclassify them as employees? The Trump Administration’s Department of Labor issued an interpretive rule, and a Republican-backed plan would create a “safe harbor,” allowing companies to increase worker protections without triggering reclassification. Legal experts predict this issue will outlast the pandemic.

It is simplistic to define traditional jobs as “good work,” and alternative working arrangements as “exploitive work.” A better framework is to think of “good work” not “good jobs.”

A National Academies report urgently called for improving the data infrastructure for alternative work arrangements, and better understanding the size, trends, and implications for work quality. Beyond the U.S., the World Economic Forum calls for platforms to collaborate with policy-makers, researchers, and work organizations “to increase transparency and understanding of the platform economy,” including sharing the number, demographics and practices of their platform workers.

Lesson #3: Social trends and policies are already defining future fluid work platforms

COVID-19 has exposed the social vulnerabilities of a labor market that lacks an adequate and well-coordinated social safety net. What might an improved safety net look like? Trends, laws and policy recommendations offer clues.

In the U.S., California Assembly Bill 5 in 2019 established a three-factor test of a worker’s status as an independent contractor versus employee: (1) the workers is free from the hiring company’s controls and direction in performing their work; (2) the worker is doing work that is outside the company’s usual course of business; (3) the worker is engaged in an established trade, occupation or business of the same nature as the work performed. This “ABC” rule has motivated some companies to limit using contractors, and prompted demands to classify drivers as employees of companies like Lyft and Uber.

In 2020, Lyft and Uber are encouraging their California customers to “Vote Yes On Proposition 22,” which would categorize app-based drivers as independent contractors, and includes labor and wage policies such as minimum pay levels (120% of minimum wage), work hour limitations (less than 12 hours in 24), healthcare, and accident insurance (cover at least $1 million in medical expenses and lost income).

Global institutions such as The World Economic Forum call on countries to provide these platform worker protections:

Benefits. Remove regulations that limit benefits such as health insurance, retirement benefits, union membership, etc. only to traditional employment.

Reasonable pay. Cover platform workers with minimum pay laws, and other market protections.

Security. Establish appropriate work availability, sharing risk between the consumer, platform and worker.

Upskilling. Require training, reskilling and upskilling opportunities.

Representation and Voice. Require platforms to engage in arrangements such as collective bargaining to ensure that voices are heard and rights are respected.

Question #2: Which lessons will be valuable to sustain after the crisis?

All three lessons are valuable to be sustained, for different but related reasons.

Lesson #1: Fluid work can be exploitive or empowering, through choices of society, workers and organization leaders. As COVID and other trends melt more traditional jobs into fluid work, organizational leaders should embrace their opportunity to make fluid platform work empowering. That will encourage society and policy-makers to maintain and increase the available fluid work options and more allow more permeable organization boundaries. However, if fluid work platforms are exploitive, societies may feel compelled to limit work options.

Lesson #2: Better decisions require improved definitions, measures and understanding of fluid work.  A well-developed talent ecosystem would recognize more options than “employee versus contractor.” For example, the i4cp Talent Ecosystem suggests work alternatives such as internal talent marketplaces, external talent exchanges, self-directed teams, gig/freelancers, crowdsourcing, partnerships, automation, and internships/apprenticeships. The i4cp study found that 3.5 times more high-performance than low-performance organizations use alternative work arrangements. There is an even greater variety of work arrangements that could evolve with creative combinations of the Assignment, Organization, and Rewards. Better data and evidence about fluid work is essential to good decisions.

Lesson #3: Social trends and policies are already defining future fluid work platforms. This trend will continue as COVID and other crises accelerate fluid work. If robust and well-considered policy frameworks put fluid work on a more solid platform, that will expand and preserve options for organizations, leaders and workers.  If not, leaders and workers may find themselves facing a post-COVID reality where necessary agility demands fluid work options, but policy and legal frameworks prohibit them.

Question #3: Which of those sustainable lessons will be challenging, because inertia, ignorance, or other factors will push us to either snap back to before, or worse?

All three lessons face unique sustainability challenges, and risks that they will be lost or forgotten as the crisis fades.

Lesson #1: Fluid work can be exploitive or empowering, through choices of society, workers and organization leaders. Sustaining this lesson will take effort, because its impact is often not immediately obvious. Remote work is perhaps the most example that illustrates how more fluid creates new opportunities but also difficulties for workers. Remote work is empowering for some, but difficult for others. Leaders must look beyond the immediate demands, and craft future strategies and policies built on today’s experience.

Lesson #2: Better decisions require improved definitions, measures and understanding of fluid work.  How much of the work in your organization is melting into fluid work? Many workforce planning systems cannot answer this question because they are limited to work arrangements of “employees” and “contractors.” The inertia of systems built upon “jobs” will make it tempting to snap back. The tendency of political and social debates to define jobs as “good work” and alternatives as “exploitive work” will also challenge more nuanced work arrangements.

Lesson #3: Social trends and policies are already defining future fluid work platforms. If your organization currently relies only on employees and contractors, why engage in public and social policy? Do such policies only concern platforms like Uber and Lyft? It is tempting to sit back and wait, but COVID has accelerated “work melting,” and your organization may increasingly rely on fluid work platforms. Lacking thoughtful and well-informed policy, the future may present a worst-case situation where your agility requires fluid work but regulation and social policies prevent or limit it.

Question #4: For the challenging lessons, what are the pivotal and essential actions to take now, while the crisis provides motivation, attention and awareness, to avoid missing the window for change?

Lesson #1: Fluid work can be exploitive or empowering. How can you make fluid work more empowering, both for your employees (internal talent marketplaces) and outside your organization? As fluid work is accelerated by the COVID crisis, HR leaders have a unique opportunity to use today’s examples to identify the exploitation risks and empowerment opportunities. Remote work already presents important lessons about fluid work. Remote work offers unprecedented value creation through worker empowerment, but also unprecedented challenges such as burnout, unequal domestic situations, unequal technology access, and whether the advantages of remote work can be equitably shared when some work must be done at a specific time and location. The increased use of contractors and freelancers presents leaders with similar opportunities to identify empowerment and exploitation and develop frameworks and lessons that will encourage future empowerment.

Lesson #2: Better decisions require improved definitions, measures and understanding of fluid work. Sustaining this lesson requires that HR and other leaders expand their concept of work and how alternative work arrangements are measured in work systems, and in the broader economy. It is an opportunity for HR leaders to move beyond binary distinctions like “employee versus contractor,” and beyond policies that assume non-employee workers are exploited. An empowering fluid work platform requires more nuanced distinctions. Leaders can use the COVID-accelerated work innovations to enhance their talent measurement and planning systems, capture a more complete array of work arrangements, and prepare their workers, managers and leaders to make better decisions. Start with these questions:

Where is fluid work most valuable? Where is it evolving quickest?

Where are remote workers reinventing jobs?

Where you are borrowing talent from another organization?

Where front-line workers are discovering how to apply skills you didn’t know they had?

Expand your flexibility by redesigning the Assignment, Organization and Rewards.

Lesson #3: Social trends and policies are already defining future fluid work platforms. Engage now with policy and social initiatives that affect your organization’s most strategically pivotal fluid work. Leaders should sustain this lesson by monitoring key policy developments, sharing their own best practices, and advising on key legal and regulatory proposals.

To start, review the World Economic Forum issues at the beginning of this blog. How might your organization’s strategy be enhanced or challenged by such issues? How are they affecting you today, and what lessons should be sustained into the future?

A solid platform for fluid work can empower both workers and organizations, but the frameworks for fluid work platforms are evolving now, and much faster due to COVID and other disruptions.  It’s time for leaders to engage.