Free agents are redefining the employer/employee relationship
When John Roth's star was shining a little brighter, the Nortel Chairman and CEO would often cite the lack of skilled workers as one of his company's greatest impediments to future growth. Little more than a year later, Nortel's stock price tanked and the greatest creation of shareholder wealth in the country's history had largely evaporated. Twenty thousand job cuts were announced.
Layoffs have been a fact of life for decades. But when even employees at Nortel, arguably one of the country's most successful companies, have little or no security, few Canadians can be confident of their long term employment prospects.
The job as we know it is dead, says Daniel Pink in his book Free Agent Nation: How America's New Independent Workers are Transforming the Way we Live. In its place, a new compact is emerging in which "free agent" workers negotiate employment contracts with companies, similar to the way sports stars negotiate deals with the teams they play for.
This can be either an overt deal, or an unspoken arrangement where a company hires an employee - ostensibly for a full time job - but the arrangement is terminated, as soon as it is no longer convenient for one of the parties.
The reasons for the breakdown of the employee-employer relationship are varied. Technology has a lot to do with it. Most individuals now have the computing and communications firepower at home, which was once reserved for large corporations. This has led to a shift in the balance of power from the organization to the worker.
Exacerbating this trend, today's companies, -- especially those like Nortel, who are operating in the fast changing new economy -- can no longer supply security. Product life cycles are shorter, and companies need short term employees to accommodate them. Netscape's life span for example, from it's IPO, to the time that it was bought out by AOL Time Warner, was less than five years.
Employees --having less to lose-are also far less loyal than the "Organization Men" of the 1950s. IBM employees in the 1970s, -- who benefited from guaranteed life-time employment - thought long and hard before jumping ship. But after the company - facing stiff external competition -- trashed 120,000 people, many were less reluctant. IBM of course was not alone. The widespread corporate down-sizings of the 1980s and 1990s permanently altered the old employee employer relationship.
Pink defines "free agent" broadly to include temporary workers, contractors, freelancers and micro businesses and their ranks are growing fast. According to Pink's calculations, 33 million people or about one in four Americans are free agents. That total is higher than the number of workers employed in the entire manufacturing government sectors. The largest private employer in the U.S is now Milwaukee's Manpower Inc. a temp agency with more than 1,100 offices across the country. In the bellwether state of California, two out of three workers do not hold full time, permanent out of home traditional jobs. According to Pink, this growing force will make itself heard in areas far beyond the workplace.
For example most traditional employees have taxes deducted from their paychecks a little bit at a time, so they don't really feel it. Free agents sit down every quarter and often have to write a considerable check to the government. The fact that they write the check as opposed to having it deducted, completely changes the dynamic about how free agents view government, and how much they are willing to pay for it.
Another area that is going to feel pressure is the school system, one of the few institutions in our society that have hardly changed at all in the last forty years. Schools writes Pink, are set up to produce rows of conformist kids who would fit in well in the big companies of the 1950s. But since many of these jobs don't exist any more, the value of a traditional education is likely to drop sharply, and parents will increasingly choose home schooling for their kids.
Pink, a former speech-writer for Al Gore, also walks-the-walk. He left his White House job after a bout with exhaustion to become a free agent himself, and claims to enjoy the home office and the extra time with his growing kids that his new lifestyle provides.
His experiences, as well as those of countless other free agents that Pink interviewed inform the book, and give good insights into a growing segment of North America's working population.
Free Agent Nation: How America's New Independent Workers Are Transforming the Way We Live, by Daniel Pink, Warner Books, 356 pages
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