Monthly Archives: March 2016

Just because it has an app, doesn’t make it a gig

A recent article in Forbeshttp://ww.forbes.com/sites/parmyolson/2016/03/21/gig-economy-app-blue-collar-job-on-demand/#51a7380f74e2, illustrates a problem with the media's focus on the gig economy.  The article, entitled "This App for Blue Collar Workers Offer a Twist on the Gig Economy" describes a well-funded start-up in Spain called Job Today which has launched an app to place workers in hospitality jobs that have "the Old School idea of a job where you are an employee."  I am sorry, Forbes, but being recruited into a job as an employee is by definition, not a gig.

Indeed Job Today is excited about the number of people it puts into jobs, not gigs.  It is a staffing segment that does not even represent white space in the staffing industry; there have been companies servicing  the hospitality industry with servers, bartenders and maids for decades.  Granted, the founders wanted to do a bit of  disrupting, since so many people find jobs in hospitality  by walking into a bar and offering up a paper resume.  This was a market inefficiency that technology could potentially address.

Using technology differently in the space is where the  confusion, probably arose.  Job Today has a Tinder Like app, where the user swipes to see different candidates. (The old HR Professor in me, sees some inherent potential discrimination issues in that, but hey... they are in Spain...) Just because there is a cool app, doesn't make a staffing firm a gig economy player.  Yes, sophisticated platforms for matching talent has enabled the freelance economy to be targeted and engaged more precisely, but this is sophisticated technology designed to help people get regular jobs. That said, they do handle some temporary ones, for vacancies or seasonal work, but their bread and butter is in the full-time regular hires.

So just to be clear, for any journalists or bloggers who might not understand my nuance here.  Regular employment  where people are hired as employees are not gig economy jobs even if a cool app is involved.  As McKinsey defines it, the gig economy is "contingent work that is transacted on a digital marketplace." Job Today has the second condition, but its goal is not the first.

Goldman Sachs buys into the gig economy

Honest Dollar in the Gig Economy

The headline in the Wall Street Journal yesterday read, "Goldman buys Retirement Startup". The story went on to report how the purchase of Honest Dollar, an Austin, Texas-based financial technology firm focused on retirement plans comprised of low-cost exchange traded funds targeted at small and mid-sized companies was a purchase designed to broaden Goldman's business into less exclusive services. It was also a play into a new distribution channel, where the emphasis is on technology.  The inference was that by purchasing this innovative financial technology company Goldman was buying entry into a hot new marketplace.

Although I can't speak to the technology, I can speak to the innovation because Honest Dollar is one of the few financial service providers targeting gig economy clients.  Some coverage of the transaction did mention that Lyft, the on demand car hailing service, was a client.  What was not mentioned was that they were a client not just for employees but for 1099 contractors.

One aspect of working on a 1099, independent contractor (IC), basis is that you are responsible for paying your own state and federal taxes  (FICA, FUTA and income) and managing your own benefits. The latter includes saving for retirement.  Whereas traditional employees have these payments deducted from their pay, ICs need to make the effort to coordinate it all.  Many pundits have suggested that this lack of access to benefits traditionally offered to employees is reason to eliminate IC status, unionize or at least slow the increasing presence of gig economy workers.

Honest Dollar saw this marketplace complexity as an opportunity. Providing retirement plans to 1099 workers represented a whole new target that was not underserved but unserved . William Hurley, co-founder of Honest Dollar says "It's the first retirement plan for the modern world." 1099 contractors who work for Honest Dollar clients can have retirement savings deducted from their fee payments.  Contractors can even set it up on a smartphone.

Now with the backing of Goldman Sachs, Honest Dollar is bound to expand its offerings,  the safety net for the gig economy may be improving.

 

The Value of Non-Profit Board Service

As the Chair of ReSurge International I attended a great event this week called Board Match put on by The Volunteer Center. http://thevolunteercenter.net/?The_Board_Match_NPO The event brings together not for profit organizations looking to add board members and individuals interested in joining a board.  There was one moment in the evening where I surveyed the scene, looking out on a trade show like assembly replete with animated conversations and thought how lucky we are for the wonderful spirit of service there is in America.

Well...yes and no...We were lucky and spoke to several qualified candidates who had done their homework on our organization and truly wanted to see how they might add value to our Board and help advance our mission.  Although I don't know how many of these folks will follow-up and proceed through our board vetting process, I am confident that our time was well spent.

On the other hand, there were several candidates who responded when asked why they wanted to join a board, that " it was the right move for them in their career". As I used to tell my students at USF, if you only take one thing from  the class, take this -- serving on a non-profit board is not about you. Rather it is about 4 things -- to make it easy to remember, it is about the PEGS.

P  is the fact that you need to be passionate about the mission.  ReSurge transforms lives by providing free reconstructive surgery and medical training, so it is very inspirational, and it was easy for me to feel passionate about the mission.  Alternatively, I served on the Board of the American Liver Foundation, a very laudable organization that funds research for liver disease.   Having no personal connection to liver disease, it was hard to be a great ambassador for the cause.  When I contrast the two Boards,my role and my engagement level,  being passionate about the mission makes all the difference.

E is about extrapolating from your experience.  As I said in a Ted Talk at my Haas Business School reunion, with the great training we get in our MBA program, we can offer so much to the non profit sector. But your expertise could come from other areas beyond business, including your own volunteer activities.  We all have many gifts to offer.

G is for the fact that not only do we offer our expertise, but we gain learnings as well.  My first board role was with an emergency homeless shelter for families. Since I was in the human capital space I volunteered to provide some guidance on HR policies and employee benefits.  Based on my private sector experience, I was quick to point out that their sick leave allowance was way too generous.  I was informed that given all the sicknesses the residents, especially the children, were bringing with them, staff really needed all those sick days.  It was a great learning not just about the different workplace cultures, but also how best to make observations - now I ask why first.

S is for supporting governance.  It is an adjustment for some new board members to understand that a board governs, it does not manage.  The staff runs the place, not the board.  The board provides strategic guidance, fiduciary oversight, and supports, selects and evaluates the CEO.  Good governance is like the lighting in a museum; you couldn't see the art without the lights, and when its bad, you notice.  When it is good it is effective, effortless and elegant.

So if you are considering board service, think of the PEGS and be sure your peg fits the opportunity.

Hollywood and the Future of Work

Stephen Kasriel the CEO of Upwork just wrote an article in Fast Company called "Why the Future of Work will Look a lot like Hollywood."   I agree wholeheartedly and in fact wrote a similar piece years ago on the movie model. I pointed out that It is no surprise, that  in the business analog, the first players  to become independent were the stars,  just like in the movie model. Back in 1988  ( before the internet...ouch!) it took me no time to build up a strong network of consultants numbering in the 1000s.  Independent expertise of the most credentialed sort  has been around for decades, well before the advent of what people typically think of as the gig economy,  i.e. the uber drivers or free-lance workers on the  Upwork platform. It's the stars, the highly accomplished independent consultants and interim managers,  who wanted to to take control of their careers and make choices about how they would use their talents.

 

But there are two salient  but potentially related differences  between the movie world and the high end of the gig economy.  The first is that no one seems to take issue with the movie model.  The fact that talents of all sorts, from cinematographers to actors to musicians, come together for a one year gig  to make a movie and then disband is not derided as a dangerous model. This gig economy is accepted for what it is - the best way to complete a large scale cinematic project. However the other key difference is the fact that  Hollywood is a land of unions. The  writers, composers, actors and directors are all in a union or guild.  Additionally, the agents who represent them are also union members.  Is it this labor affiliation that spares the movie model from criticism?

Just today, the AFL CIO declared that gig workers should be employees.  They implied but did not suggest outright that therefore they should be union employees.

I can't speak to the low level roles in the gig economy, but I can speak to those who represent the most skilled, the consultants who have gone independent by choice.  One once told me she never wanted to be an employee ever again.  I will extrapolate that she wouldn't want a union card either...

 

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