Monthly Archives: October 2016

Yet Another Research Report on the Gig Economy

Albert Einstein once said, "If we knew what we were doing we wouldn't call it research." How fitting in this case.  Yet another report came out this week estimating the size of the gig economy. Pymnts.com released their research http://www.pymnts.com/gig-economy/2016/gig-economy-growing/ done in conjunction with Hyperwallet, which attempts to define the the size of the independent work marketplace.

This is on the heels  of the recent McKinsey Global Institute  (MGI) study, "Independent Work: Choice Necessity and the Gig Economy."http://www.mckinsey.com/global-themes/employment-and-growth/independent-work-choice-necessity-and-the-gig-economy.  In that comprehensive report, the authors had a significant disclaimer about the problem of data collection in this area. The annual contingent labor study done by the Department of Labor was discontinued in 2005, so thee are no government statistics about participation. Various entities,including companies in the space, academics and think tanks, have launched efforts  to explore the subject.  So there is no dearth of data about the gig economy, the problem is each study has been  done with a slightly different approach. In fact the MGI study even included a great graph comparing the size estimates emerging from these disparate research projects. It tried to isolate the specific industry segment which was being addressed by the researchers.  For example, it  listed 5 different studies, including their own,  that sized the independent workforce in the US as a percentage of the working population.  The results were broad ranging,  from as little as 16% to as high as 27%

So given that the numbers don't quite jive, who is right? Since I am working on my new book, Thriving in the Gig Economy, I have been wrestling with this issue quite a bit.  I have decided that  potentially they are all right; you just need to be cognizant of how they have framed the question. MBO Partners, for example , provides the best ( and only) historical perspective, having issued its report on the State of Independence in America  for each of the last 6 years. https://www.mbopartners.com/state-of-independence/mbo-partners-state-of-independence-in-america-2016 They focus on independent consultants in the professional services space and estimate the market size at just south of 40 million participants. They define 3 primary categories of independents: full time, part time and occasional.  MGI, on the other hand, has a higher size estimate based on four categories of workers, including two groups, who are working in this way out of financial pressure rather than personal choice. They include some categories of workers, like doctors and therapists, who may or may not be captured in the MBO Partners data.

One area that has very limited data available is the use of digital talent platforms by gig workers.  The new PYMNTS report is targeted specifically at this.  In fact, they specifically don't include the group of "freelancers" who may get their work from intermediaries, like M Squared Consulting http://www.msquared.com or Business Talent Group. https://businesstalentgroup.com/business-strategy-consulting-google/?gclid=CLLwv-vy-c8CFUKTfgod6t8HGA.  Given the exclusion of this key population, the graph which showed the type of professional services procured through the digital talent marketplaces was telling.  The professional service in the highest demand was photography. The senior level independent consultants do not appear to be represented.  I have yet to comprehensively go through this report, so I can't speak to conclusions the authors may have reached.  Perhaps there will be more to come on this in the future.  At the very least, there may be more to come in my book.

 

 

Curt Flood and the Gig Economy

As a San Francisco Giant fan, I am sad to say that the baseball season is over for me.  (And of course, as a Giants fan, I must now root for the Cubs against the Dodgers, But I digress...) But none the less it is October, when the baseball season reaches its inevitable climax.  So as I work on my book about the gig economy, I thought it was fitting to do a shout out to Curt Flood, a man who changed baseball and the world of work in a major league way, pardon the pun.

Curtis Charles Flood played 15 years in major league baseball  from 1956-1971, playing for the Cincinnati Reds ( or Redlegs, as they were known at the time) the St. Louis Cardinals and the Washington Senators.  He had a solid career, with three all star

St. Louis Cardinals outfielder Curt Flood is shown, March 1968. (AP Photo)

St. Louis Cardinals outfielder Curt Flood is shown, March 1968. (AP Photo)

team appearances and seven  golden glove awards. He won two different hitting titles and still today is ranked third behind Willie Mays ( a Giant , of course) and Richie Ashburn for most games played in center field.  However, his impact is not what he did on the field., rather it was what he refused to do off the field, namely accept employment terms that no longer seemed appropriate to him.

Before 1969, players were bound by the reserve clause in baseball, which made players beholden to the first team with whom they signed.  The had no say about their  futures once the contracts were signed.  Team management could make the decision to trade or release a player without so much as a "how do you do" to the athlete.

When the team wanted to trade him after 12 years to Philadelphia, Flood refused, saying,"I do not regard myself as a piece of property to be bought or sold."

Floods case went all the way to the Supreme Court, and due to the fact that Justice Powell had to recuse himself because of his ties to the Busch family, the owners of the Cardinals, he did not win.  However his action and the attention it garnered paved the way for change and ultimately led to free agency in baseball.

So what does this have to do with the gig economy?

What Flood wanted was control over his professional life.  After all that time in the league, he felt he was owed that. Various studies have shown that when professionals decide to start consulting independently it is for that same motive -- control over their life. MBO Partners  2016 State of Independence in America Report says that over 60% of consultants cited control of their time as a key factor in going out on their own. Similarly, the McKinsey Global Institute's  recent report entitled Independent Work: Choice Necessity and the Gig Economy noted that the independent workforce is larger than previously thought and that most participants choose independent work for its flexibility and autonomy.

What Flood did, by challenging the reserve clause, was to create a new notion of how employment relationships can work, a mental model that could be extrapolated to other businesses. Many people may only think about the free agency in sports, but it has its analogues in all sorts of other professional fields now as well.   In fact, in the aforementioned McKinsey report, they cite different categories of gig workers, and the high end consultants who pursue the independent work option by choice are dubbed in the study as free agents.  So thank you Curtis Flood for making your stand so that you could get the gig you wanted.  The gig economy is in your debt.

 

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