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The Rise Of The Contract Workforce (npr.org)
An anonymous reader shares a report: A new NPR/Marist poll finds that 1 in 5 jobs in America is held by a worker under contract. Within a decade, contractors and freelancers could make up half of the American workforce. Workers across all industries and at all professional levels will be touched by the movement toward independent work -- one without the constraints, or benefits, of full-time employment. Policymakers are just starting to talk about the implications.
[...] It's not just business driving the trend. Surveys show a large majority of freelancers are free agents by choice. John Vensel is a contract attorney at Orrick who grew up a few miles from Wheeling, on the other side of the Pennsylvania state line. In his 20s, he was a freelance paralegal by day and a gig musician by night. "I actually wanted to be a rock star," he says. But these days there are no edgy vestiges of a former rocker, only a 47-year-old family man cooing over cellphone photos of his children, Grace and Gabe. In the two decades in between, Vensel worked full-time corporate jobs. But he was laid off in 2010, on the eve of his graduation from his night-school law program. He graduated with huge piles of debt, into one of the worst job markets. For a time, Vensel commuted three hours round-trip to a full-time job in Pittsburgh. But more recently, he quit and took up contracting to stay near home in Wheeling.
[...] It's not just business driving the trend. Surveys show a large majority of freelancers are free agents by choice. John Vensel is a contract attorney at Orrick who grew up a few miles from Wheeling, on the other side of the Pennsylvania state line. In his 20s, he was a freelance paralegal by day and a gig musician by night. "I actually wanted to be a rock star," he says. But these days there are no edgy vestiges of a former rocker, only a 47-year-old family man cooing over cellphone photos of his children, Grace and Gabe. In the two decades in between, Vensel worked full-time corporate jobs. But he was laid off in 2010, on the eve of his graduation from his night-school law program. He graduated with huge piles of debt, into one of the worst job markets. For a time, Vensel commuted three hours round-trip to a full-time job in Pittsburgh. But more recently, he quit and took up contracting to stay near home in Wheeling.
I've worked hard, lived below my means, and saved ferociously for two decades now and I'm getting ready to retire with a 7 digit investment portfolio in a year or two before I'm 50. I feel sorry for the young people just entering the workforce, what a different scenario they will be facing with the Republican destruction of the social contract and delivering all power to corporate America. It's a much more lopsided equation than it used to be. As my late dad used to say, BOHICA. Bend Over Here It Comes Again.
For the last 15 years, I have been contract with short "real jobs" in the middle. But after 6 months to a year I have fixed the issues and it is maintenance. I do not like it, and they do not like paying my salary for it, so on to the next. Feeds my ADD. :)
Contract workers is effectively "try before you buy" on an employee. It's getting increasingly difficult to fire poor performing employees. Contract is a good bet for employers.
"Tempers are wearing thin. Let's just hope some robot doesn't kill everybody." --Bender
The situation sucks. Not only in the present but it was make the future suck as well because everyone caught in it are going to feel a crunch come retirement, if they ever do get to retire. There's no guarantees with the mighty 401(k) and IRA that are tied to market forces which we have no command or control over.
There are structural problems with our society that allow this to happen. It's not only coded in our employment laws but also in the anti-union bent of corporate profit imperatives. We want people to take responsibility for their own success but remove every single tool that might be used for that through black-letter law or through making it so expensive in seeking redress of wrongs it become untenable, even in principle, to see it done. We allow for unilateral NDAs to be upheld. We allow for so much to be hidden away that even if I were to invest the time (as if I had the time to invest) looking into a potential employer, I wouldn't find be able to find the problems they have.
So what do you want us to talk about here? We know about it. We work as well as we can within it. There's public outcry but no political will to do anything. This is the endpoint of 40 years of corporate political influence. What's there to be surprised about it?
Oh, the horrors!
Sounds like a typical commute into London, rather than some extreme bad case.
One of the reasons that I have worked for myself for all but ~6 weeks out of the last ~30Y is to have a bit more control over commuting...
Rgds
Damon
http://m.earth.org.uk/
In the future, all employees will be treated like front-line grunts; easily interchangeable and expendable.
Of course, design/engineering/programming/security work is infinitely more complex, but Greed doesn't give a shit about things like continuity, and will assume every employee is easily replaced.
Quality will become a shadow of its former self. Welcome to the Gig Economy. Enjoy the shitshow.
First job I had out of school was a lab where nearly everyone was "permanent contractors", where they were just using it as a way to avoid paying benefits. Interviewed another place where the lab had a 3 month opening because they had a 'permanent contractor' they really liked but couldn't keep her year round (unspoken: because then she'd have cause to sue for benefits, as I understand things). I don't know if it is still that bad but it sure led to high turnover and low morale at those places.
So step up to independent escort and keep all the money. :) "Just be nice to the customer, Fancy, and they'll be nice to you!"
The dirty little secret of this trend is that it's happening because the employers increasingly getting away with policies that in past times would have been called mistreatment of their workforce. The American workforce has increasingly moved out of the blue collar industries that had fought long and hard for Regulatory and Union protections, to the comparatively unregulated and unprotected world of white collar drudgery. Things like Union protections and Pension Programs are a things of the past, and loyalty (in either direction) has been entirely removed from the equation.
The vast majority of people would not cast off the security of a large organization and take on all the risk of going freelance while there are alternative. But increasingly the Companies are asking for more and more from their employees and giving less and less in return, to the point where the Hassle&Restriction of a large organization out weights diminishing expectation of Job Security that is the whole point.
Common Sense isn't as Common as people think...
...if we had a basic floor by some mechanism, where someone couldn't fall below, leading to a semi-permanent drain on society, and a society that was unwilling to have people die for their own benefit.
You know, something closer to the biblical ideal espoused in the 'new testament' part of the most consistently referenced book in this nation, but with the freedoms espoused in the other largely revered document, our constitution.
A 'basic income' system would work, but some mix of unions/safety net if that wasn't possible could at least mitigate those falling through the cracks.
Education also helps - but everyone can be suckered, or just have the bad luck to be taken advantage of for too long. Even the smartest folks can live most of their lives in abject circumstances for the sake of loved ones, or ideals where that intelligence doesn't help them.
A more ideal case would be if everyone had some base line, could be sure that everyone they loved would at least survive in some level of comfort, and were free to help, not in the confines of a arbitrary-hour work week, but could use tools to be available whenever made sense, without fear of becoming bankrupt later in life for pursuing whatever they felt helped others the most.
Money should still matter - what folks are willing to reward more or less can still matter... but it shouldn't be increasingly the ONLY thing that matters, above life, death, and everything else.
Shared social value should matter for SOMETHING, shouldn't it?
Ryan Fenton
There's also the outdated work ethic that only serves to fuel the lifestyle of the one-percenters. There's enough wealth in the world to satisfy everyone's needs without everyone "needing" a job. Guaranteed annual income should come sooner, not later.
it sucked. Very inconsistent pay. He'd be on 9 months and off 3. Which is fine if you're in your 20s but not so much when you've got kids to raise. You're always playing catch up. I forget why but you can't get for unemployment.
The other problem was he could never get a raise because his contract agency had established how much he was willing to work for, so even if the job paid more the contract agency just pocketed the difference. He didn't have a degree so he needed a contract agency to get past the HR filters.
Right now it's dog eat dog here in the States. Whenever anyone suggests having the gov't step in and fix it they're shouted down as tax and spend liberals redistributing somebody else's wealth. We can't even get health care over here.
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we need single payer health care!
we need crack down to the fake 1099'er where if you don't have the level of control that an true 1099'er gets then they must put you on the W2
When I get recruiting calls (and I get the often) I will either flat out say I don't do contract positions or I will raise my asking price (which is usually already significantly above what I am making - into the 6 figures range) because the fact is I can't get healthcare and I don't get vacations on a contract position. If workers don't start pushing back, companies will never get the hint that they can't just contract their problems out to someone else. Eventually, they will get the hint.
Yes, get the commoners to fight each other while the ruling class goes on to buy bigger boats.
mfwright@batnet.com
Or git better. And get paid a contracting fee for your skills. Enough to cover your own insurance and other benefits. And take time off between gigs as you see fit.
Have gnu, will travel.
Some of the Slashdot commenters seem to take the stance that this is a bad thing; a result of a workplace environment that's gotten so bad, you'd rather just risk going it on your own as a freelancer.
I'm not so sure?
For example, I work for a company that employs maybe 100 full-time people, but also keeps about 200 additional freelancers on a list of people they use on a contract basis for projects. Some of these folks were former employees who decided on their own to go freelance.
Having worked with a number of them over the years, I think it's a mixed bag. You've got the people who happily gave up a "stable job" with a regular salary and benefits for the contract work, because they're really good at what they do. They weren't worried about having enough work to make ends meet. In fact, they make a lot more money as a freelancer and can pick and choose what they'd prefer to do instead of have a project dictated to them as their sole job.
On the other hand? I've also spoken to a number of these freelancers who I'm really unimpressed with. They don't seem to know their way around the technologies they're supposed to be getting paid to work with, and some of them just have bad attitudes in general. I'm sure in at least some of those cases, they couldn't keep a full-time job for too long. Maybe they're good at a few specific things and that's why our company keeps them on their list of folks they use? But they're probably not a good idea to hire full-time.
I agree that "job security" isn't as much of a thing as it used to be, but that's been the case since I first entered the job market, decades ago! It's been clear to me that my parents had a level of job security that just doesn't exist for my generation, or for any of them that have come after me. Businesses today are just trying to be as efficient as possible, and technology helps automate away some of the job positions people once held where they really didn't contribute a whole lot. These days, you can't expect good pay and benefits unless you've got the knowledge and skills to warrant it -- and even then? If you work for a place that has a product or service that's not DIRECTLY tied to what you do for them, you're always at risk of losing your job through no fault of your own. (You might be amazing at database administration, but if the widget maker you work for has salespeople who slack off and don't get a decent number of widgets sold? You don't have a lot of job security there.)
Did my time there in Orrick's Wheeling office as a central system architect supporting their worldwide offices, as an employee, not a contractor. They are one of the law firms encouraging and enabling large corporations to do this, one of their prime business lines is corporate human resources legal work, finding legal ways to remove benefits from employees, protecting corporations in labor disputes, etc. etc. Using a law firm that is one of the drivers of the growing contracting work force for the NPR feature is a really poor example. They also only have an office in Wheeling because of a cozy relationship between one of the senior partners and the former governor of WV that gave them a sweet deal tax wise on a decrepit old toothpaste tube factory where their office is located. Nicely redecorated inside of course.
One amendment I'd make is for worker's comp. I'll agree one should not be *dependent* upon the employer, but on the other hand there does need to be an ever present knob to twist to have companies self-interest align with worker safety (hazardous environment in theory should translate to higher worker's comp premiums).
The health insurance linked to employer is just bonkers.
XML is like violence. If it doesn't solve the problem, use more.
I've had several headhunters contact me about positions with manager or director in the title, but they're rent-to-own: Start as contract, and if we like you, we might hire you in a year or so.
I have been in this industry for over 30 years, and I'm well known in the business -- I do industry conference presentations, blogging, loudly volunteer on standards development, etc.. If you can't actually hire me, I don't want to work for you.
Part of the problem is that the headhunters are the contract agency, so it's not at all in their interest to go back to the employer and say, "He'd like to join, but only as a permanent employee."
One note: with the recent mostly-vile tax revisions, independent contractors get significant tax breaks. It was designed as a handout to financial and real-estate gazillionaires, but it benefits the Uber driver and other giggers.
Design for Use, not Construction!
For sufficiently lazy definitions of "works."
Falling production costs for food, consumer goods and a lot of other stuff over the past 50+ years has masked a lot of stuff. A lot of those countries that are "working" so wonderfully have massive unemployment, particularly in the younger generations. And if we look at specifics, it's fairly obvious that third party health insurance (such as our system or Switzerland) has not worked better.
The damage being done is gradual and long term, but it's staring us in the face for anyone who cares to look for it. Employers can't drop employees overnight after a minimum wage or health insurance cost hike, but more and more effort is being devoted to fleshing out the alternatives to hiring Americans (or Europeans) directly as employees. This shouldn't be a controversial thing to say. This is Economics 101 and the signs are all around us that this is happening. Employment for life used to be a thing in a lot of countries. Now it isn't. Youth unemployment of over 40% in Western Europe used to be (I think) rather unthinkable. Now, it isn't.
Just because there aren't riots in the streets doesn't mean we should continue to allow the damage to accrue. Support sanity. Support real compromises that don't pit American employers and American employees directly against each other. It's not less capitalist; it's MORE capitalistic to let the government handle the cost directly. We do have to be careful that taxes don't rise so much as to scare companies overseas but I can't see how a centralized approach could possibly cost more in corporate taxes than they're already being forced to pay out of pocket now.
Does it matter if Bob Cratchet is a contractor or FTE? Either way, Scrooge is looking to get rid of him as soon as he can. It's the power imbalance in the system that's the problem, not the specifics of the employment contract.
That is all.
The rise of contract labor versus permanent employment has been an ongoing issue globally, ranging from Canada to France to Japan and even India. There are differences and nuances market by market, but a lot of it comes down to employers demanding workforce flexibility in the face of uncertainty, competition, and plenty of desperate underemployed people. France is a case where labor regulations are so tight, that contract labor is an easy loophole. Maybe the only place that this trend is beginning to reverse is in Japan, but that's simply because their labor force is rapidly shrinking.
And the staffing company rep doesn't like it when you call her your pimp...but, she won't fire you for it* and it is fun.
*You could be caught with a dead girl or a live boy, and they wouldn't fire you as long as the client company doesn't find out. They're afraid of the contract going to a rival company.
Aah, change is good. -- Rafiki
Yeah, but it ain't easy. -- Simba
So far as IT goes, I can say this highlights a very unfortunate trend. There is now an expectation that highly skilled workers in a very specific discipline are available to come out of the woodwork when they are called, that they will be grateful for whatever they can get, and then will quietly slink away to try to find and compete for an opportunity to work somewhere else. We are not talking about salaried contractors hired through a contracting firm, or about the traditional contract jobs of yore, where a self-employed contractor could expect to get the big bucks and make more than enough to carry them through the gaps until their next gig, swapping the job security for financial remuneration. The expectation now is that they will take these jobs, many paying no more than what is comparable for full-time employees (and with no benefits), and like it. In general, unless the remuneration is high enough to offset many other factors (such as the uncertainties and income insecurity, lack of benefits, and the lack of employer provided training) these contract engagements should only be taken as last resort. They tend to be bad economic choices for the worker in the same way that "rent-to-own" is a bad way to furnish your home.
Yes, there's a certain degree of sense in having employers share the cost of injuries so that they'll be motivated to build safer workplaces with safer practices. But I'm not sure that forcing them to pay for worker's comp is a particularly efficient way to do that. Insurance companies do in theory offer lower rates if you can prove you're safer than average but after shopping for car and homeowners insurance, I've noticed that this is often an unreliable, haphazard, inefficient method of interest alignment. I think OSHA plus lawsuits are probably good enough. I don't know precisely how the system is set up now, but we could even allow the worker's comp insurance provider (with a premium paid for by the government, let's say) to sue the employer if their negligence caused a costly injury. Correct me if I'm wrong, but I think this is basically how no-fault car insurance works... your insurance company pays to fix shit up immediately, but they reserve the right to sue the other person on your behalf to recoup their costs (or you can sue yourself, but in the insurance contract they reserve the right to deduct their expenses from any damages you win.)
So yeah, interest alignment for safe workplaces is all well and good but I think there are plenty of ways to do that without inflating the cost of hiring additional employees. Companies should want to hire more employees. There are many, many ways to help workers without discouraging employers from hiring them in the first place. And if we ever do manage to significantly raise the demand for labor, suddenly all kinds of other problems could begin to solve themselves, like the trade deficit or immigration woes. (Well perhaps not solved, but at least leftists could point a little more confidently to figures showing clear benefits of increased immigration.)
I'm one of those strange people who prefers a full time job, with a steady paycheck. I know the absolute dollar value for contracts in my field is higher than I get as an FTE, but everyone I know doing contract work is constantly hustling for a new job and never knows where their money will be coming from. I work for an IT services company so I get tons of exposure to different projects. I'm not sure I'd feel the same way if I didn't get work that varied often, but knowing you're going to be paid and can cover your expenses is a relief. I'm not a natural salesman, and really don't want to be looking for work again 2 weeks into a 3-month contract. We employ contractors in some positions where I work, and it's not exactly a ringing endorsement of the contracting lifestyle overhearing them calling headhunters, juggling bills, etc.
People with families, houses and other fixed committments tend to favor steady income. Companies want a disposable, nomadic workforce that never puts down roots and can load their belongings into their car at a moment's notice. I'm strange in that I think it's a good idea for people to stick around, see their projects through, and get involved in the communities they live in. I know employer/employee loyalty is at an all-time low but it doesn't have to be. I think well-run companies that think long term (a minority, I know) don't really want a payroll full of mercenaries that they can't really count on. One of the best things that could happen through the tax code and accounting rules would be to encourage employment of FTEs over contractors. Right now, companies do everything they can to avoid hiring people because there's no incentive. If you made it so that retaining and paying employees is cheaper than a bunch of hired guns, lots of people would be much less stressed.
Bullshit. It's Globalism dummy! What do you expect when you're in direct competition with slave-labor in a 3rd world nation that can do your job over the same internet. Oh, and manufacturing is cheaper too with less environmental regulations (because China doesn't care about its citizens).
Union. Actually, I'm in favor of it, not because it will solve what you suggest, rather, because it will hasten the exodus of jobs out of this nation even further. Maybe then people will get a clue!
Life is not for the lazy.
What's funny to me is that were I work contractors actually cost more than regular employees per slot. However that doesn't usually translate to the individual contractors being paid more. When I hired on as a contractor, I somehow was given a form that I probably wasn't supposed to see. That form detailed how much the company was paying for the slot I was filling, my salary accounted for less than 40% of that. Now it is true that employees cost more than just their salary, however in this case there was almost none of that outside of health insurance. When I finally got hired on as a regular employee I got a significant pay increase immediately, regular salary increases tied to time on the job plus annual cost of living raises, retirement benefits, 401k matching, far and away better health insurance coverage, more vacation and sick time. Years down the road now I'm making 20% more than I hired on at and my total cost to the company is still only about 75% of what the contractor company was getting nearly a decade ago. Why does my company use contractor companies for ? I can only imagine that it's tied to some good old boy system.
That form detailed how much the company was paying for the slot I was filling, my salary accounted for less than 40% of that.
So you weren't really a contractor. You were an employee of a job shop that sent you out on assignments. Carry the contract yourself and take home 100% of the fees.
Have gnu, will travel.
Yeah, like the other person said, whatever the situation you were in, there was clearly a lot more to it thay you being a contractor situation. Some weird shell company game they were playing for tax reasons, employee leasing, head hunting fees... I don't know exactly what it was you saw, but there was clearly more to it than just you being a contractor.
In one of my first jobs, our company transitioned us all from employees to contractors, we all received an immediate 33% pay rise and I was told that the company was still paying less per employee. I don't think there are any hidden fees involved in hiring contractors unless something else is going on. And yeah, a good old boy scheme of one sort or another is a pretty good starting assumption.
it's about 6 feet. You're guaranteed to get at least that far.
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and you feel invincible. Things like health care, retirement and child birth & rearing feel too far off to be real. The way most companies implemented this is by doing it to the young employees or by outsourcing/offshoring. Divide and conquer between the old and young. Break up worker solidarity. That sort of thing.
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Who woulda thought that if you impose multiple and ever-increasing burdens on employers, that they'll start to hire fewer people as employees?
While unfunded mandates on employers definitely push companies to want to decrease their employee costs, I think that's just one relatively minor issue among the much larger elephant in the room. The real problem is that the forces that push back against eliminating jobs and decreasing compensation are waning. If all government mandates were suddenly eliminated overnight, I believe that the current cost reduction will continue and even accelerate. Executives are incentivized to cut costs to maximize their short-term stock returns. That's the core of the problem. Until that incentive is altered, government regulations won't matter much in affecting job growth/elimination. Perhaps, those short-term stock returns need to be extended to many years, but that won't happen because the compensation committee members are also the beneficiaries in the incestuous world of corporate governance.
Yeah, and being a full time employee doesn't really guarantee you any safety. The usual suspects around here are legendary for their layoff cycles. You'll run into people here who've been laid off two or three times by the same company. Corporate benefits have been going to crap lately too -- you might get an extra bonus a year out of them, that might help with the difference between the FTE and contractor salaries. I made the mistake of accepting a stock grant, which accidentally made a decent amount of money for me but still almost wasn't worth the extra complexity in my taxes. Admittedly paid vacations are kind of nice, assuming they ever actually let you take them.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Keep playing with your email and phone while the old timers who got us to the moon using slide rulers continue to do the work.
I'm half joking here, but the problem isn't so much the older employees as much as companies do a terrible job passing knowledge.
This is a fairly common flow of events, and often goes a little like this:
CEO doesn't like wage bill on balance sheet.
CEO looks at workers and can't figure out what they all do.
CEO decides to downsize.
CEO hires a consulting company to conduct interviews and tell CEO what s/he wants to hear.
Consulting company recommends firing workers, and CEO acts.
Time passes.
CEO doesn't like sales figures on balance sheet.
CEO discovers they actually need workers to get stuff done.
CEO hires back workers as consultants on contract basis at 3x their prior wage.
Everybody smiles.
"Nine times out of ten, starting a fire is not the best way to solve the problem." - my wife
you shouldn't feel so safe. It wouldn't take much to wipe out that investment portfolio. 7 figures isn't a lot by today's standards and rest assured someone out there is already thinking about how to swindle you out of it.
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It is pretty rare for a contract firm (aka body shop) to offer any benefits at all. Generally all they do is pay you subpar wages and mark up what they billing the customer, pocketing the difference.
Do you sprinkle some sugar on the corporatist boots before licking them, or do you take them black?
We can't let corner cases like that dictate our entire economic policy. He already has incentives in the form of OSHA and employee lawsuits. If it turns out those aren't enough, well, we can enhance the power of either or both of those things.
Did you miss the part where I am in favor of DIRECT GOVERNMENT ASSISTANCE TO WORKERS including, but not limited to, wage subsidy/reverse income tax and government-provided universal health care (more or less)?
Corporate personhood should be abolished, corporate political contributions outlawed, etc. That's all well and good. All that happy horseshit? I'm for it. What I'm against is punishing corporations for hiring American workers. That's not pro-corporate; that's anti-masochism.
Doesn't change the fact you went on about companies not hiring 'because there are burdens on employers' which is straight up corporatist whackjobbery.
And you love Puerto Ricans as long as they don't move next door....
Many free agents aren't free by choice. There is just no other way to earn money.
-- Cheers!
I was a self-employed contractor for over 20 years of my 45 year career. Alvin Toffler in 1980 had predicted contracting to become part of what he called "the electronic cottage." In Information Systems, it began to be much harder to stay continually under contract after the major financial adjustments at the end of the last century. Mores the pity, I think. Instead of investing in high speed transit systems, why aren't we investing in higher bandwidth internet? Imagine the problems it we face today that would be addressed with the latter. But perhaps I am getting off topic.
Witness the modern American liberal, supporting centrist masochistic dogshit just because the Republicans hate it, instead of supporting something that would actually help workers.
We live in a capitalistic society. You cannot just randomly hurt corporations and expect workers to automatically benefit. Taxation and redistribution should in theory be a more left-wing thing to support, but no, since it would benefit the corporations as well (vs. the minimum wage status quo), we can't have that. Better that all should suffer.