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Elusive Job Security
Workers feel stuck and believe job security is dwindling.
Those feelings can lead to action.
Part-time work, contract work, and self-employment are all on the rise.
A mindset shift is happening. Partly out of choice.
However… what started out as a choice, could shift into a forced action.
Fear is a powerful motivator.
Fear of losing your job and fear of your pay being cut has risen sharply since the pre-pandemic low. In fact, workers are the most fearful they’ve been since 2014 / 2015 – excluding the COVID spike in the chart below.
Given this outlook I wonder:
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How long will workers be willing to operate under this status quo?
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Why wouldn’t workers at least consider ways to diversify their income and protect themselves from job loss?
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Are there incentives companies can offer that can immediately compete with the benefits of nontraditional job opportunities?
My fear is that corporations will have limited power to provide a sense of job security for their employees at any point in the future.
Sounds extreme. Let me explain.
A New Gateway → To Choice
Gig work changed the game.
The term is most associated with companies like Uber and Instacart, but what gig work did was make it easier to work on your own terms. It gave workers choice.
The trend started in the early 2010s, gained steam around 2015, took a leg higher in 2018, and took off during the pandemic. See chart below. The obvious reason for its early rise was technological advancements.
Source: NBER Working Paper Series. The Evolution of Platform Gig Work 2012-2021.
By 2018– gig work platforms were mainstream (Uber, Lyft, TaskRabbit, Etsy, Fiverr, etc. etc.).
Yet, the uptick that year wasn’t simply about tech adoption. There was another important driver at work:
The stagnation in real wage growth during 2017 and 2018 (“real wages” account for inflation, reducing the gross increase in wages). After two years of solid growth, real wages stalled1 .
This motivated people to try out new, easy, ways to make some extra cash on their own time.
Did You Know:
Uber’s first ride was taken in 2010.
TaskRabbit’s iPhone app launched in 2011.
Fiverr, the freelance website, launched in 2010.
Gig work was just the start. Other nontraditional ways of earning a living were invented and are still being created.
You’ll notice the creator and influencer economy are barely blips in 2021 on the chart above. My guess is that those and other forms of independent work have ticked up significantly since then.
No doubt about it, gig work gave us permission to take ownership of our careers.
And that is an idea, or a genie, that might not be easily put back into the bottle.
Workers have optionality, but that’s not nearly the biggest problem for companies that worry about perception of job security…
Hard Reality for Job Security
Many employees prefer having a W-2. It’s historically been the steady way to make a livelihood. Add in healthcare benefits and the 9-5 becomes pretty alluring.
As I thought more about how companies could restore a sense job security for their workers, 2 shocking stats made realize that is a task might prove quite difficult.
The stats:
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23% of jobs that exist right now are estimated to be gone within 4 years2 .
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Skills are deprecating rapidly. The half-life of most skills was estimated at 4 years in 20212 .
This is the same length of time it takes to get a college degree… think about that!
Both stats are from the World Economic Forum, which is well regarded globally as an authority on the state of work.
What’s nuts about this is that as time goes on, our skills will depreciate even more quickly (in 2017 the half-life of skills was 5 years). Which probably means more jobs will be eliminated (some others will be created).
This all makes it logical to assume that employee turnover is going to be elevated for the foreseeable future.
I’m sure these stats don’t apply to every industry. I’m the first to say aggregate data can be somewhat misleading. However, even if you only believe a small percentage of the claims above are true…
The question remains: How does a company offer job stability in an environment with an increasing need for turnover?
Bottom Line
The clock is ticking. For everyone.
To me this brings to the surface how critical the need is to reevaluate the relationship between employee and employer.
If workers believe there is a lack of opportunity for growth - internally or externally – and have fear of losing their single source of income, they will be forced to become resourceful.
Corporations will also have to get creative in their approach to talent management in a transparent way, that benefits their top and bottom lines. Incentives will need to be adjusted.
Embracing the unknown as we invent the future of work will separate the winners from the losers - individuals and companies.
Related: A Stalling Job Market