Tag Archives: Haas

Adventures in the Gig Economy

Thriving in the Gig Economy and the Hourly Nerd

So I am working on a new book, "Thriving in the Gig Economy", a subject I happen to know a lot about from my experience at M Squared Consulting.  That said, though, there are many new players since the days when I ran M Squared.  As fodder for my book, I am walking the  talk and exploring new platforms and using gig economy resources along the way.

I have registered as an expert at a number of sites.  The most remarkable experience was with Hourly Nerd.  (Really, they thought that was a good name, but I digress.) The Hourly Nerd pitch is that the consultants or "nerds"  on their platform come from only select business schools.  To underscore this, they ask that all potential consultants sign up using their business school email.

Now there is the rub.  When I went to business school, email had not yet been invented.  I know I date myself, but that doesn't make me any less qualified as a consultant.  I must say, to Hourly Nerd's credit, they responded immediately  when I pointed out that I did not have a Haas Business School email since that would have been impossible in 1985,  and  since I knew that they were not intending to discriminate against older MBAs,  there had to be another way for me to apply.  Needless to say I was vetted rather quickly after that.

In my 3 weeks of  being in the nerd ranks, I have received 2 inquiries, neither of which was really appropriate for me.  Since I chair a not for profit humanitarian NGO, I received a request to do research for another non-profit in a totally different field.  Clearly they need to work out the difference between functional expertise and industry expertise in their algorithm.  The second was a bit more on point, looking at employee utilization in consulting firms.  However, since the consulting firm I ran was a hybrid firm, providing independent consultants, gig folks or nerds in their parlance ,  to projects my expertise was not quite on point.  As they say, three is a charm, so I wonder what might come next...

In the meantime, I am securing some programming talent in this gig economy as well as research time from some other platforms.  I am intrigued to experience the customer side...I will keep you posted.

 

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.

1099 Questions about the gig economy

Professor Laura Tyson of the Haas Business School published a great piece  last week about the challenges of the gig economy.https://agenda.weforum.org/2015/11/how-can-we-protect-workers-in-the-gig-economy/

She focused on digital labor platforms, noted that nearly 400 million people have posted resumes on Linked In The problem, and of course there always is one, is that as this contingent workforce has grown through the likes of Uber, Taskrabbit and Upwork, employment has not, since most of the work is done on an independent contractor basis. As such,these individuals are  paid on a 1099 not a W2, and separated from the employment based benefits which provide the proverbial safety net via health insurances and retirement programs. She goes on to discuss the policy implications as well as the interesting coalitions being formed around this issue.

Although Professor Tyson discussed the independent contractor (IC) issue as a relatively new phenomenon, it is not. Independent consultants, and other professionals like  real estate agents  have faced this issue for decades.  For many, creating the answer to the safety net issue was part of the calculus of starting their independent business in the first place. These individuals were making a deliberate choice to create an independent, professional  lifestyle , another point that often gets lost in the IC debate.

From my research several years ago ( which clearly needs to be updated) a significant minority of ICs were able to secure benefits through a spouse.  Further proof of that is that when we set up benefits programs for ICs the greatest interest was in tax deferred income and retirement products.  Granted, the sample we were targeting included the highest paid ICs, so they would have had arguably the greatest economic flexibility.  In the last 5-10 years, the IC ranks, thanks to the new digital platforms,  have grown to  include lower wage workers.

Conversely, according to a recent article in the Economist, the data does not support amazing growth in this IC economy,  with the caveat that labor statistics are egregiously poor in both the UK and US .  (Indeed, the US government discontinued the tracking of contingent workers  in 2005 by eliminating the Contingent Work Supplement . Senator Mark Warner  has requested  that  the Bureau of Labor Statistics, and the IRS reinstate it.  ) In a 10/23 article, the author, Laura Gardiner,  notes that the number of self employed workers in the US is actually falling and the proportion of full time workers  in both countries has not decreased. Freelancers represent only 2% of the workforce in Britain.

Gardiner goes on to suggest that this non intuitive lack of growth may be the result not of  bad statistics but of improper definitions.  The gig economy, also the sharing economy, includes the 1099 worker but also encompasses the AirBnB hosts, for example, who don’t see that extra income from renting a room  as  job related. This is true for many participants in the sharing economy, suggesting that the true size of the current market activity may be significantly understated.    In some cases the income may go unreported but in most it will just appear as 1099 income. As such, that may be the better metric to track.

The  Bay Area Council Economic Institute did just that.  It compared the growth in the number of  1099s  issued ( not the dollar value)  with the number of W2 returns by year and indexed for inflation.  Although 1099s tended to peak  and then retract after recessions, as demonstrated in 1990, 2001 and 2007 the pattern has changed.  Since the financial crisis and attendant recession in 2009, 1099s issued has continued to rise, while W2s have shown greater variability. 

By 2025, Tyson suggests the gig economy will approach $2.7 trillion in global GDP. Hopefully by then we will have a better understanding of how the marketplace functions,  and a much better handle the policy infrastructure needed to support it to ensure the independence and flexibility it affords can be sustained.

 

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