One-third of the American workforce is made up of individuals working contracts or short-term assignments known as gigs. And the number of workers “going gig” is growing. Businesses used to manage every aspect of their operations—from the design of widgets, to their production, to the marketing and sale of widgets, to the installation and maintenance of widgets. Managing every facet of business was often cumbersome and usually very costly. As a result, many business owners began taking a long look at changing the way they were working, got lean, and began outsourcing jobs to specialized partners or employees, which saved them both time and money. As a result, the gig economy was born. During this show, Future of Work host and BMG’s Shelly Kramer and her guest, her partner Eric Vidal, tackle the topic of the gig economy, and how and why it continues to grow.
Shelly and Eric kick off this episode with an explanation of how businesses have transformed over the last few decades. Companies used to manage every facet of the operations—from marketing to janitorial services and everything in between. But now, businesses rely on different types of specialized workforces in order to get the job done efficiently and affordably. Businesses today simply do not require the large infrastructure of previous years, and this means they typically do not need large, permanent workforces, either. Instead, companies are “going gig” and turning to contract labor. Many businesses—small, midsized, and enterprises—employ a large number of contractors.
Companies aren’t the only ones changing how they employ people; people are also changing how they want to be employed. The contract labor workforce has grown significantly in the last ten years, as more and more employees are opting to go gig. One reason behind this switch is that the members of the Millennial generation entering the workforce are making demands of employers to provide flexible options that allow them to work remotely, around their schedules and activities instead of the other way around. More and more people are beginning to embrace the idea of being their own boss, as they see this entrepreneurial lifestyle pays off.
The benefits of the gig economy for workers are numerous; hours are flexible, work is often completed remotely or around scheduled activities, calls and emails are handled when it is convenient. Employers can hire specialized workers for specific projects or clients, and scale as needed when the volume of business changes.
In this episode, our hosts touch on the significant benefits to this model, but also note drawbacks—the gig economy is not for everyone or every company. Switching to this format requires having a dedicated permanent staff to serve as a central hub as contractors come and go, and it also requires an investment of time and effort to find contractors who are skilled for particular needs, and are willing to take on assignments. Other challenges include managing individuals who are not immediately in your office, but may be working for you several states or across the world away. All of this is fueled by mobility and cloud computing, as that’s what makes it all possible. It also explains the boom in cloud-based collaboration technology platforms because, in order for the gig economy to work, teams have to be closely connected and able to communicate and collaborate seamlessly.
Going gig is a great idea for many businesses—you’ll want to tune in to find out if it’s a great idea for yours!
Watch this episode now, or read the transcript below. Don’t miss a single episode by subscribing to the podcast.
Shelly Kramer: Hello everybody. This is Shelly Kramer. Welcome to The Future of Work Show. Today we are going to talk about the fact that we read all these articles, we write all these articles, I know I do and my team does all the time, talking about the future of work and what’s going to come. But the reality of it is the future of work is actually here and it’s happening right now. Today I am joined by my colleague and business partner Eric Vidal. Eric runs Broadsuite Media Group and our media companies and Eric, welcome.
Eric Vidal: Thank you. I’m happy to be here.
Shelly Kramer: Always happy to have you. So actually, I’m going to let you kind of run with this because this topic today was your baby and I know that I get stuck sometimes thinking of all the things that excite me about what’s ahead and the reality of it is we have come so far. Let’s talk about that a little bit.
Eric Vidal: There are a lot of different areas we can talk about. The first one I want to talk about from just from the perspective of starting a company. Think about 30 plus years ago, even 15 years ago, it was different, but 30 years plus ago, if you were a manufacturer and let’s say you are a phone company and you are manufacturing those hard phones. Remember at your Grandma’s house, the ones you had to pick up and dial? One company had it all. You had everything inside the company. You had the ground crews, the telephone lines you were in charge of, the service or Customer Service personnel, the Marketing team, billing departments, phone devices, retail stores, etc., etc. It was all within the company. But over time it has changed, right? And over the last 15 years it has changed. Now you rely a lot on partners, or you rely a lot on different types of work forces and contract workers and I think that’s a big thing that’s changed. That is the future now. Think about how, I don’t want to say it’s easy, but you can launch a company much quicker than you could back then, especially a tech company. If you think about 15 years ago, even, the standard procedure was to get some seed funding or angel investors and then go through that first round and second round and what have you. Now two guys, two girls can come together, create an app in a matter of weeks or days and they can be up and running and selling their service right away.
Shelly Kramer: On Facebook.
Eric Vidal: On Facebook.
Shelly Kramer: I mean, you can.
Eric Vidal: They can be a global company right away without all that infrastructure that I just outlined. Without all that full-time staff that I just outlined. If you think about our company, we are about 30 people or more and most of our staff is contract. I used to always think it was company driven, and I still think a big part of it is company driven. But what I have noticed over the past few years is the staff; the people want that. That’s what they want. It’s kind of like TaskRabbit, or the site that I have been using a lot because I’m doing some work around my house, Thumbtack. Or even Uber, where the employee can choose when they want to work and what they want to work on. That was unheard of 20 years ago. Over the last 10 years the amount of contract employees that I have just described has grown just over 30%, in the last 10 years. So, that’s interesting, just from that perspective.
Shelly Kramer: Yeah, and I think that we are looking at a couple of different things that are driving these things. You made some different points and I want to touch on. One is, as it results to contract labor and really also the “gig” economy. We have the millennial group who are 18-32 at the high range, maybe 35, who are in many instances entrepreneurial, in many instances not necessarily interested in making a commitment. You and I have come of age in a work-force where you took a job and you stayed with a company. Remember when you had to worry that oh, I haven’t been here five years and will someone think I’m a job hopper? And now job hopping is the flavor de jour. I don’t really see that as changing and actually that is a big challenge for companies to create an environment where people want to stay around. So, I think you are looking at not just millennials but people of all ages that are very comfortable with an entrepreneurial mindset. Once you move past the oh my God, I can actually live without having a traditional 9-5 job. I can do the kind of work I want to do with the kind of companies I want to work with, maybe it’s one, maybe it’s many. I can set my own hours. I can pick up my kids from school. All of those things fit into your lifestyle whether you are a man or a woman. In many instances, you and I have some of our best conversations when we are driving to school to pick up our kids at the end of the day.
Eric Vidal: Absolutely, absolutely.
Shelly Kramer: So, I think there’s that. And I think from a business standpoint much like cloud technology allows businesses to scale up and down quickly as needed, relying on a contract labor source certainly has cons. Some of the pros are when you have contract laborers that you work with, first of all you can tap specialized expertise for specialized needs, which I think is so important and something I’ve always prided myself on us delivering to our clients. We don’t just put a body on an account because we have a body that we are paying. We have somebody working on your business because they are ideally suited to work on your business and I think that’s a big point of differentiation for us. The other thing is when you do what we do there are busy seasons and there are slow seasons. Work scales up really quickly and maybe work scales down unexpectedly. So, when you have a contract labor force who also have other clients that they are serving, especially for a small sized business, it is an incredibly valuable thing. We are seeing enterprises moving more to that as well because the other thing about contract labor is that everything we do is so highly specialized these days. Anybody who walks in the door and say, take Marketing for instance, I am a Marketing expert and I know everything about Marketing. Well let me tell you something, I’ve been a marketer for my gosh, a really, really long time now and I am the first person to say I know a little bit about a lot of things but I don’t know everything, because Marketing is getting so data driven, so scientific, so much of an art, all of these things combined together, that being able to tap people to bring in to collaborate, that’s what makes organizations agile, innovative and strong and that’s happening all the time now.
Eric Vidal: Yeah, you have been doing it for quite some time now and I will be honest with you, my eyes were really opened in 2006 because I had worked with some different companies or agencies and let’s pick ad agencies. I know that’s the world you come from Shelly. I’d worked with a couple ad agencies that had maybe 20% of their workforce that were specialized contractors but most traditional ad agencies back then had a staff. And yeah, it was up and down. They lost clients, that had to lay off. They got new clients, they hired. That’s just how it was. In 2006 I had met a couple agencies that were going away from that. They were going more towards the model that you have been doing now for quite some time. I will be honest, I didn’t get it. It took me a couple lunches, a couple cocktail hours to finally get it. The barrier I had was why do these people want to do that? And it was because in this case some of these people had two or three gigs lined up. They liked being highly focused and targeted. They liked to come in and be hit men or hit women if you will and just come in and make big impact, whether it be three months or a year and they get paid a little bit more, and they will work on some very cool, very creative stuff. Once I got convinced of that I was bought in. I didn’t have that mind-set as an employee so it really got my eyes open to it in 2006.
Shelly Kramer: You know, it’s not a business model that works for everybody. Most organizations rely on some full-time staff because like I said, you kind of live by the sword and you die by the sword. If you have an entire organization that is run by contract labor and you get in a situation where you need all hands-on deck, everybody isn’t available because they are off serving other clients, which is what you want them to be doing. It’s part of your agreement with them. Having run a business for 20 something years, that’s something that I’m pretty good at. I have had a lot of time to perfect that. You kind of learn lessons along the way and you also learn how to identify the right skill set for the right need in your company and you also learn to identify who the right people to tap for your contract labor force are. For instance, I almost never hire somebody who is just out of school because bringing someone on your team, even as contract labor, requires an investment of time and effort and training on the part of your existing time and the same is true of that new person. Eric, as you know we work virtually. We have offices in Kansas City, Phoenix, Chicago and Tampa. That’s where our main partners are located, and in each of our cities we have some key team members. We are all virtual and we collaborate online a lot. I just don’t feel that a virtual environment is conducive to a young person really learning what they need to learn about the workplace. I feel like we would be doing them a disservice by hiring them. Think back to your first jobs and how much you learned, whether you worked for a big company or a small company. You went to the office every day and it was like going to Kindergarten. You had to learn the rules of Kindergarten and the same is true of the workforce. So, I really don’t feel like, even if someone is very persuasive and absolutely convinced that this is what they want to do, I rarely will bring them on because I feel like it’s a disservice to them. I feel like they need to dive into that real corporate world and get some experience and then we can talk about doing some freelance work or something like that, kind of beefing up their portfolio in some way.
Eric Vidal: That’s funny you say that because I’ve done that. I have done that twice. I hired two people right out of college over the last two years and it was a challenge. You brought up one of the points, you have to do a lot of hands-on training. Are you willing to make that commitment or have one of your staff members making that commitment? It is going to take time. I was very fortunate. They both worked out but my thing is, looking forward, do I want to do that again? Unfortunately for me the answer is no. I don’t have the time to make that commitment again.
Shelly Kramer: Maybe some of it comes from the fact that I’ve raised two daughters who are now grown and in the workforce who worked for me from the time they were teens growing up because I owned my own businesses. They were probably like 12 or 13. So my kids have done everything. For me, even though it is an investment of time on my part and certainly on the part of my team, as a parent, watching my kids flourish in the workplace in their chose career paths, I just have felt like it’s less about what this person can do for me and more what I think is right for them. Whether they realize it or not, they need to get a job working in an office and learn what that’s like. I almost always say no.
Eric Vidal: Well, a couple things. We brought up mobile a couple of times and the topic of this conversation is the future of work is already here and so I think a lot of that has to do with mobile. And you brought up some of our best ideas come up when we are in the car and we have the phone on speaker phone and sometimes our children are even helping us collaborate with some ideas.
Shelly Kramer: Or reminding us not to curse.
Eric Vidal: Yeah, or keeping us in line or in check. Good ideas come out of cursing sometimes. I just think mobile has helped so much as well. It has changed our workforce. I came from WebEx and Cisco where it was just built into the culture. It was in the DNA. You were always traveling or working from home, or working from the office, or working from a partners’, or working from a conference, you are just always on the road and you are always collaborating. We had a global workforce. But then I have gone to other companies and it’s funny that it’s just built into the culture now across the board and that has changed the way we work. One of the things I remember a couple of years ago, before you and I partnered up Shelly, is I used to tell my staff, when you write emails to our executives, you have to be short and concise. I won’t go through my whole monologue here, but you have to be short and concise and no more than three bullets. Those three bullets have to be very short and you have to explain to them what you want. The reason why is executives are constantly traveling and mobile. Yes, three. For everyone that doesn’t know, three is my favorite number. Always do three, sometimes two is fine, but try to go three. That changes the way you communicate, right? But because that was embedded into our organization, four of the top six executives were always traveling. I was always traveling and I wasn’t even in the top four or top six, so it changes the way we communicate as well and how we have to send our messages.
Shelly Kramer: Well, how we send messages and how we collaborate. Obviously, there are many, many pros to what mobility brings to business, to people, to organizations. There are also cons. When it’s 10:00 at night and your phone is blowing up, there is an always a nature that mobility brings to our lives and our business and you kind of have to factor that in. One of the things that I try to tell members of our team is that my work style is such that I have kids that are in grade school. We have sporting events, sports practice and things like that that I am chauffeuring them to, which I’m sure any parent is familiar with. So, the time from, sometimes 5:00 to 8:00 can sometimes be a busy time at my house, maybe even 4:00 to 8:00, you just never know for sure. I catch up a lot in the evenings, whether I’m on my phone or my laptop and I’m communicating with our team using the Cisco Spark collaboration tool that we use, or by email or by Skype. However it is, messenger, you know we are always communicating through a variety of channels. I make it a point to tell people early on, just so you know, I may send you an email at 10:00 at night and I do not expect you to read it. That’s my work time. I don’t expect it to be your work time. With mobility, there is an expectation with your team that mobility is an inherent part of your organization. There is an expectation that they can bring their own device which requires a lot of policies and procedures to protect your organization and data, which is a whole different topic. I think that it is also incumbent on business leaders to understand just because you have a device doesn’t mean you expect your team to be tethered to those devices at every moment. I think there is some mindfulness that goes into that, you know?
Eric Vidal: Yeah. There are two or three people on our staff that I collaborate with sometimes late at night but we have a thing where we will just say, like little tag words that we give, like I’m socializing and I can’t answer right now or something like that. That way you don’t get pulled in and engaged and are sitting there at dinner being “that” person. Usually most of the time it’s not needed. You don’t need to reply.
Shelly Kramer: Or I’m two glasses of wine in – leave me alone.
Eric Vidal: Here’s an example that just happened the other day. On Sunday I wasn’t feeling well and I could hear the notifications going off on my phone and I went and turned them off. I did not look. I did not want to look because I was checked out by 6:45 at night and I did not want to reply. I know you were on that string, you and I and another co-worker but I just wasn’t up to it.
Shelly Kramer: So I can blame you for the sickness that’s in my house. Eric was here in Kansas City last week for a series of meetings and Lola, my daughter, was out sick yesterday and I didn’t feel very well yesterday. Today she is out sick again and I feel a little bit better but if you got sick first you started it.
Eric Vidal: Actually, I think Shawn got sick first on Friday, a co-worker of ours.
Shelly Kramer: True, we can blame it on Shawn.
Eric Vidal: I got sick two days later.
Shelly Kramer: Okay, well nobody needs to hear about our problems, right? I think this has been great. This is an interesting topic and yes, there is much ahead of us as it relates to the future of work but the reality of it is the future of work is here. I don’t want to presume that everybody is in the same place as it relates to the adaption of mobile or cloud technology in collaboration platforms and other SAS applications and things like that. But the reality of it is the workplace of today is vastly different than what it was even five years ago and the future of work is very much here. Hopefully there have been some things that we have talked about that might spur you to think a little bit about how your organization is structured and how you’re embracing the future of work. What things you are putting into place? What are your employee or your contractor expectations as far as what a workplace looks like and do those things mesh? So, Eric, thank you so much for joining me today. It’s always a pleasure to have you here.
Eric Vidal: Thank you Shelly.
Shelly Kramer: Absolutely. Thank you all for hanging out with us and we will see you next time.