Me-Commerce

Temporary staffing positions have tripled in the last decade, according to an MIT/CDI study, which suggests IT workpractices are mainstreaming, spreading well beyond Silicon Valley.

Long ago and far away, the idea was that stable, long-term employment once meant a bond between employer and employee. You found a good company and worked there, possibly for decades, and the company paid your bills, took care of your health, and saw you into a secure retirement. That didn't always happen, but it was the ideal of the modern industrial age, also know as the pre-Internet era. The system was both secure and paternalistic.

It's also over.

Scholars, technologists and economists have been saying for years now that we're making a transition from an industrial to an information age. Information is becoming the most valuable single commodity in the world, and the Net and the Web are the vehicles bringing more of it to more people at less cost every day.

For tech workers, according to a new study by the CDI Corporation and MIT's Sloan School of Management, new kinds of companies and new technologies like the Net are sparking a reinvention of work, a flexible kind of workplace that the study's authors call "me-commerce."

Their report shows that the number of positions filled by temporary staffing companies expanded from 1.35 million to 3.23 million between l988 and l998 -- the fastest employment growth of any industry sector during that decade.

Today, more than 25% of American workers are part-timers, independent contractors or temps, the authors explain. When contract and on-call work is included, the share of the nation's workforce operating outside traditional, full-time jobs has mushroomed to nearly 30%. In high-tech employment sectors, those numbers run much higher. Only one in three Californians holds a permanent, full-time, day-shift job working on-site.

While this shift may benefit better-educated, high-end professionals in terms of earnings, job flexibility and creative work, skilled workers have a tougher time, the study warns. They face stagnant and declining wages, alienation from their employeers and a less-certain job market.

Over the past several decades, as large amounts of capital, increased competition, new information technologies and new management philosophies and techniques have downsized large companies and created a favorable environment for start-ups, Americans have come to feel less attachment to their employers. High-tech workers don't really seem to mind; they aren't interested in lifetime employment, but creative working environments and good pay.

That suggests the boundaries between the tech and non-tech work forces are becoming more distinct, even as the former grows increasingly influential. If you know computing and technology, work in IT industries, and use the Net and the Web, you're much more likely to enter this new, affluent, mobile workforce. If you don't, you're not -- and you probably won't be nearly as content with the "flexible" work environment you've been thrust into.

The study also reminds us again that parents, educators and politicans ought to be demanding that all their kids have access to the net, rather than obsessing about pornography and pummeling schools and libraries to install blocking software.

New kinds of organizations (the MIT study calls them "guilds") are emerging to look after the needs of increasingly-mobile workers: professional associations, labor unions and staffing companies, as well as new businesses like Web-based talent brokers and headhunters, along with local employers and some government agencies.

This matters particularly because the work practices of the IT sector are setting the patterns for many kinds of work in the future, one of the ways in which the Net is driving profound and largely unacknowledged social change. Silicon Valley and the tech industry are still seen as a culture apart. But the truth is, as high-tech districts sprout all over the country -- Boston, Austin, Minneapolis, Boise, Portland, Denver, San Diego, Silicon Alley in Manhattan -- their work practices are clearly becoming the mainstream.

We're entitled to mixed feelings about whether this is a healthy trend or not. Much-in-demand mobile tech workers think it's great. They have personal freedom, full employment and a kind of rolling job security. But what if the economy were to turn downward? What if companies sharply scale back on innovation and new directions?

And what about the growing social divisions between tech and non-tech workers? Won't the latter become increasingly disconnected and angry as they're pushed into a job market where they earn less, where their job security and opportunity and benefits may evaporate at any time?

The retreat of the traditional firm and the rise of the guilds definitely mark a new phase in the history of work. What nobody knows yet is whether this new flexibility is a great step forward for individualism or another heartless Darwinian profit-making tool of the new corporation. If history is any guide, it's probably a bit of both.

[Note: to read the study yourself, CDI requires registration.]

Comments

Starving Netizens.

[Anonymous Coward]

If the economy takes a downturn, particularly in the tech sectors, then a lot of people will be out of a job. This is hardly rocket science. Right now, it's a seller's market for IT professionals, and they're taking advantage of it any way that they can, secure in the knowledge that they can get another job 15 minutes after they walk out the door. In this way, skilled IT people are like a new natural resource, just being exploited, a case in which demand far outstrips supply.

Eventually, though, the market will mature. The dot-coms that are unrealistic will fail, and companies will find themselves saddled with more IT people than they can use. The firings will begin, and a lot of ITs (and probably a lot of /. readers) will be out on the streets.

My advice: cultivate secondary skills. Being a top-notch Perl programmer is great when it's in demand, but it won't keep you fed if you get tossed out of a job and there's no market for your obsessively-honed skills.

Re:Starving Netizens.

[lwagner]

>Eventually, though, the market will mature. The
>dot-coms that are unrealistic will fail, and
>companies will find themselves saddled with more
>IT people than they can use. The firings will
>begin, and a lot of ITs (and probably a lot
>of /. readers) will be out on the streets.

Another thing you have to realize is that, while employers (like me) are SOL right now as far as finding people, when the economy turns down and it's an employer's market, people who have been "job-hopping" (i.e., spending only a few months at a .com-style job before leaving for another, higher-paying .com-style job) will be *damaged goods*.

Think about it: If you had to pick between someone who had three or four .com jobs in two years and someone who stuck solidly with their company through the past few greedy years, there is already an implied bonus: the latter seems to promote stability and level-headedness (even if it is not the case). It will also show that the person can make real contributions to the company (in terms of culture) and that training him or her will be worthwhile. These are just examples.

As I've learned when talking with other employers, some people (potential employees) have caught on to this and have started leaving "gaps" in their resumes to hide it. Either way, their resume immediately gets tossed. If they do make it into an interview, they are grilled about the "missing" time. Ususally, it is some bullsh*t like, "Oh, I took a vacation for three months."

Best thing: stick with it for at least a year. Remain level-headed and don't be greedy; as more and more people pour onto the scene doing what you do and the economy inevitably turns downward, employers are going to be selecting the best *people*, not just someone who can *code*.

--
Spindletop Blackbird, the GNU/Linux Cube.

Not Economics, Accounting...

[alexhmit01]

Hmm, I'm the CFO of a company, and we are trying to show maximum gross operating profits so that our shareholders are happy. All that matters is the gross profits.

I can hire a full-time employee at $60k/yr (I'm using Boston entry level salaries), or spend $60k on a contractor for 3 months. If it is a one-shot need, it is a wash. If I constantly need the contractor, I pay four times as much, right?

Well, not exactly. With the full-timer, I need to pay for them to keep their skills up to date, $15k/year (either classes or their learning time), soc. sec. tak, $5k/yr, benefits, say $25k/year, now I'm up to 105K/yr for the full-timer, 240K/yr for the contractor.

With the contractor, I record it as a one time expense. It affects my bottom line, but not my gross operating profit which is more interesting to investors. After all, from a business fundamental point, operating profits SHOULD matter more, unless games like this are payed.

If the business needs change, I have to lay-off full-timers, with severance, my unemployment insurance costs increase, etc. I also get my corporate name in the paper for lay-offs, etc. I record big restructuring costs while Wall Street plays wait and see.

With the contractors, I can increase labor in the short term (theoretically true in all labor, but the modern reality is that full-time help is a short-term fixed cost) and adjust to the market. With full-timers, I need to project out 2-3 years.

So, do I take a hit against "profits" to increase "net profits" or do I sacrifice net for gross?

I guess it depends what my cashflow expectancies and my ability to make aquisitions with a high stock price....

A dollar is not a dollar... what column does it go in?

Do I authorize the IT Staff to increase numbers, or do I allocate a one-time cost to get the short-term needs handled.

I know my company is using contractors and part-timers to avoid having to project our cash situation in 6-12 months which depends on financing which is variable... but YMMV.

Alex