Staffing Industry Analysts’ (SIA) “Collaboration in the Gig Economy” conference wrapped up a week ago, but the topics showcased leave us with a tremendous amount of insight to sift through. Every year, the event focuses on the innovations and advances in the staffing industry. What made the 2022 gathering different and more poignant was the industry’s reckoning of the seismic shifts that occurred in the aftermath of the pandemic. And let’s face it, everything changed: our societies, our lives, our sense of normal, and the very nature of work. In the opening keynote, SIA President Barry Asin and Research Director Brian Wallins laid out 35 trends shaping the new course of the gig economy. But in distilling and synthesizing all of that information, I detected a subtler theme that, while lurking in the counter melody of the score, began to resonate more powerfully: employers must accept that their relationship with employees may never be the same. And that’s not a bad thing.
Major Workforce Trends
“A key trend is that the gig economy is growing globally,” SIA wrote in its recap of the conference. “The keynote speakers noted it reached a record level of $5.2 trillion. Revenue in the US was $1.7 trillion.”
Another predominant topic concerned the “platformization” of everything. Temporary staffing platforms experienced a 190% growth rate in 2021 alone. However, healthcare staffing platforms have demonstrated more intense growth, with SIA intimating that this momentum could serve as a possible harbinger for other segments.
“Is healthcare just in a unique place in the staffing industry, or is it the canary in the coal mine?” Asin asked. “It’s certainly true that in healthcare staffing, the platform models have grown significantly faster than the traditional model. They’ve also grown really fast during the pandemic, let’s not mistake that at all.” The pandemic served as a catalyst for healthcare staffing platforms because recruiters couldn’t meet the heavy demand, he said. “The platforms met that demand. They grew over 317% in 2021; they’ve got 22% of the healthcare staffing market now.”
A third trend that received much attention involved the rising influence of talent in the gig economy. The pandemic forced businesses to adopt remote work arrangements with unprecedented rapidity. Workers discovered a new level of flexibility that helped them strike a genuine balance between their social lives and their jobs — without sacrificing productivity.
A 2021 survey quoted by Bloomberg actually found a 5% uptick in U.S. productivity during the remote working period of the pandemic, Not only that: “The findings suggest the rapid adoption of new technology amid the pandemic will offer lasting economic gains, helping to boost sluggish productivity that has long weighed on global growth.”
Despite the grousing and often ambiguous “return to the office” rhetoric from employers, talent are calling the shots.
“Study after study is showing us that, above all else, workers prefer flexibility in the new work environment,” Wallins said. “And workers are getting what they wish right now. They have the leverage with the current talent shortage, so it’s critical for organizations today to adapt to this new environment and engage with workers the way they want to be engaged.”
So here, SIA touches on the concept that today’s workers are leveraging more power. But that’s not really the whole story, is it? At least not as I’m seeing it. Let’s look at a few more discussion points that arose from various sessions during GigE 2022.
Emphasis on Training
Many of the breakout sessions emphasized a renewed concentration on training. We heard a lot about “recruit-train-deploy” models, for example. The idea behind RTD is that workers with appropriate skills and education secure jobs without necessarily having domain or platform experience in the work. They are then trained on the specific platforms or processes and deployed. It’s not really that novel a concept. Before the United States essentially abandoned trade schools to push everyone through academics-based universities, RTD was a staple of Americana. In Europe, dual education models continue to thrive. Germany, for instance, boasts a strikingly low unemployment rate as a result. Businesses there collaborate with government agencies, unions, schools, and workers to create a system where students benefit from on-the-job training while exploring the traditional science and liberal arts education of a college.
Emphasis on Human Interaction
Many of the sessions illustrated the importance of enhancing the level of interpersonal communication, engagement, and attention that workers receive. The future of staffing discussions inevitably called for advances in social recruiting, meaningful and personalized interviewing, candidate adoption, delightful candidate experiences, and a more strategic mix of human interaction with talent-centric automation to decrease the burdens that workers face while improving their ability to perform core tasks.
Payroll platform providers offered new and nuanced approaches that cater to workers. We saw many systems increasing their agent of record support features for independent contractors. The promotion of evolved agency of record functionality seemed to outshine traditional employer of record offerings in some aspects. That’s not to say providers were dismissing EOR, but they were touting features focused on the needs of talent rather than employers. A strong example came in the form of “same-day” payments and even “pre-payments.” For the latter, think of it in terms of an author or musician who receives an advance on the work.
Stagnating Labor Growth
Barry Asin noted that the Bureau of Labor Statistics (BLS) predicts slowing labor growth of 6.3% through 2050. Younger workers aged 16 to 24 will actually shrink in the market. The Great Resignation and other factors likely contribute to this forecast. As we explained in July 2021, the infamous Microsoft survey that indicated 41% of workers globally were thinking of leaving their jobs. That was January 2021. Four months later, according to BLS, 4 million U.S. employees tendered their resignations. And in June 2021, Monster.com presented a harsher reality.
“A majority of Monster's respondents, 66%, believed there were job opportunities available for them, and 92% said they were willing to change industries for the right role — a potential sign that workers are feeling more confident about their prospects in the tight labor market,” wrote Anna Cooban for Business Insider.
Burnout shone as the biggest factor. Yet the second-highest ranked reason for wanting to quit, at around 29%, was a lack of growth opportunities, the Monster poll showed.
The pandemic certainly played its part here. Although, in ways we may not have considered. An article in the Wall Street Journal by Alexandra Samuel illustrated a nuanced facet in how employees assumed more leadership responsibilities without recognition or the salary increases that traditionally come with managerial roles.
What’s the Point?
The point, it seems to me, is that anyone involved in the dynamics of the modern workforce understands that candidates have more control than ever before. Think about it: staffing shortages, mass resignations, the increase in the gig economy (signifying a move toward entrepreneurialism and independence from talent who don’t want to be employees), and a shift toward embracing and catering to the needs of workers over bosses — it all indicates that employers may no longer get to call all the shots. They may no longer be able to have their cake and eat it. Let’s dive deeper into that.
A New Worker Revolution: Talent Pushing Back
Record Profits, Stagnant Wages
For decades, business-friendly legislators have helped erode many of the worker benefits that propelled America’s enviable middle class. Although corporations are forbidden legally to prevent employees from organizing, their union busting tactics matured and refined in the 1980s through today. Citizens United, a controversial decision that reversed century-old campaign finance restrictions and enabled corporations and other outside groups to spend unlimited funds on elections, empowered mega corporations to influence elections, with those politicians passing laws that offered windfalls to business while stilting the benefits to employees.
Wages in the United States have stagnated since the early 1970s. Between 1979 and 2020, workers’ wages grew by 17.5% while productivity grew over three times as fast at 61.8%. And corporations are displaying historic profits.
“A measure of US profit margins has reached its widest since 1950, suggesting that the prices charged by businesses are outpacing their increased costs for production and labor,” explained Bloomberg’s Reade Pickert. “After-tax profits as a share of gross value added for non-financial corporations, a measure of aggregate profit margins, improved in the second quarter to 15.5% — the most since 1950 — from 14% in the first quarter, according to Commerce Department figures.”
Not only that, some businesses are simply passing their own costs off on consumers. But not much of the money seems to be trickling down to talent.
“The data show that companies overall have comfortably been able to pass on their rising cost of materials and labor to consumers,” Pickert noted. “With household budgets squeezed by the rising cost of living, some firms have been able to offset any slip in demand by charging more to the customers they’ve retained -- though others like Target Corp. saw their inventories swell and were forced to discount prices in order to clear them.”
Sometimes, the ways in which overhead costs are “reallocated” to consumers is outright shady.
By and large, restaurants are not required by federal law to offer health insurance, although there can be some differences depending on the size of the business, according to the National Restaurant Association. However, offering health benefits can help owners retain employees and combat high turnover. Sounds good, right? But if you follow folks on TikTok, you’ll notice some disturbing trends. Many videos capture images of receipts from meals that include surcharges for things like “Staff Benefits - 3.50%.” When these TikTokers (is that what they’re called?) questioned the staff, they were told the charge covers the restaurant’s costs for employee healthcare benefits. So, your brunch is footing the employer’s bill.
In August, a Pennsylvania diner was ordered to pay its staff $1.35 million after it used a portion of servers’ tips to pay bussers’ wages in a string of labor law violations.
The Sacramento Bee reported on a similar incident in which an Oregon restaurant withheld $43,000 in tips to pay staff wages.
Talent Taking Charge
Despite these revelations, talent are fighting back. From a September 12 article in Al Jazeera: “Approximately 15,000 private sector nurses in the US state of Minnesota have launched a three-day strike as they push for higher pay and better staffing in a healthcare system that has been stretched to its limits during the COVID-19 pandemic. The nurses walked off the job on Monday in seven healthcare systems in Minneapolis and Duluth, mounting picket lines, chanting slogans and holding signs bearing messages such as ‘Patients Before Profits.’”
Nurses are the most in-demand yet overwhelmed talent in the nation. The average national turnover rate for nurses is typically 17% annually, with some regions reaching as high as 40%. The pandemic has had a profoundly detrimental impact on those figures. We now confront the worst nursing staffing shortage in decades, with 60% of nurses and 20% of physicians preparing to exit their professions directly because of COVID-19. Analysts project these departures to cost individual hospitals an average of $5 million in turnover per year—about $137 billion overall. But little has been done to provide nurses with safer conditions, backup staff, and commensurate pay increases. With other potential strikes planned or mass resignations, executives may soon realize that they’re no longer holding the reins.
Union activity, in fact, has seen an uptick across the country, as workers push for better wages in a number of industries. “Some companies such as Starbucks have tried to undermine unionisation efforts, but more than 230 stores of the chain across the US have voted to unionise since late last year,” Al Jazeera explained.
I’m certain everyone’s heard about “quiet quitting,” but what does it mean?
“The phrase is generating millions of views on TikTok as some young professionals reject the idea of going above and beyond in their careers, labeling their lesser enthusiasm a form of quitting,’” wrote Lindsay Ellis and Angela Yang in the Wall Street Journal. “It isn’t about getting off the company payroll, these employees say. In fact, the idea is to stay on it—but focus your time on the things you do outside of the office.”
“The videos range from sincere ruminations on work-life balance to snarky jokes,” they added. “Some set firm boundaries against overtime in favor of family. Others advocate coasting from 9-to-5, doing just enough to get by. Many want to untether their careers from their identities.”
In a sense, quiet quitting is akin to the idea of “acting one’s wage.” If there’s no reward for going above and beyond, they believe, why bother? After the pandemic, social media were flooded with images of employers complaining that people just didn’t want to work anymore. Those lamentations were immediately met with departed talent who revealed the lackluster working conditions and below market wages present in those organizations. The blame-the-worker idiom had its moment, but that time is fading fast.
In citing Heather E. McGowan’s keynote speech at GigE, Omni Inclusive CEO Wen Stenger hit the nail on the head: “Conference quote of the day. ‘Quiet quitting is one of the dumbest terms. People doing the job they were hired to do is okay.’ - Heather E. McGowan. I cheered that someone else finally said it out loud! Corporate culture once again blames the worker when it's their environment and lack of leadership that is causing the disappearance of affective commitment. Do you want your workforce to do more? Give more back to them!”
Talent Will Shape the Future
Back to Barry Asin’s opening address at GigE. When he referred to the meteoric rise in healthcare recruiting platforms, he referred to the phenomenon as a “canary in a coal mine.” The term itself generally alludes to a warning: miners released the birds into the mines. If the canaries died, the miners knew that poisonous gasses had polluted the area, which was to be avoided. Perhaps in a way, it is a warning. Talent are not desperate to take jobs. Creative workers are capitalizing on the gig economy, autonomy, work from home flexibility, and leveraging their skills in a hyper competitive market, where employers are no longer in a position to call the shots.
To me, the situation is less canary in a coal mine and more a bellwether of change. If we analyze all of the topics, trends, and discussions of the conference, it’s clear that the workforce solutions industry understands that hiring and retaining skilled staff is paramount to business success. And that means employers will need to start looking at their talent as partners in the endeavor. As valuable contributors and stakeholders. As members of the brain trust. As perspectives that contribute to innovation, strategic direction, marketing, and more. And they will need to start reinvesting their historically soaring profit margins back into the business — and the business is the workforce.