>Staffup Weekend put the lie to Stein’s pronouncement. As Nicholson later wrote me, “The fact that people stayed for 48 hours to work on something put them head and shoulders above the thousands of applications we receive, because the participants are people who show up and see things through.”
And this event is an attempt to make showing up for a 48 hour 'work trial' a norm. This favors the younger, single population, and while you're working on whatever this event is, you are not putting more resumes out. There's the potential for abuse in getting free work out of applicants from other people mimicking this event.
(How long until we're tossed into an arena with bows and arrows only to survive and rewrite every algorithm from a CS degree on a whiteboard?)
Although the 46% percentage figure was shown in this thread to be wrong/bad, even if you consider hiring as a coin-toss, your success still depends on how many resumes you can put out there. You have to balance the time it takes to tailor your resume to the company versus moving on and finding the next company to submit a resume to. At the extremes, some people don't tailor at all and throw their resume and cover letter at everyone in a suit. Others will do deep-dive research and make 27 drafts of a resume/cover to the point where they already know more about the company than the person who may hire them. I still think there's significant coin-tossery going on: if the companies are having to filter everyone because there is so much volume, then you must at least do as much as you can to increase your own output. The 'trick' then is to just know someone who can put in a good word (and it really has always been an option)
This may work for some job sectors as a novel hiring process (it's certainly overblown for retail/fast food) but if it scales up, you'll end up taking significant bargaining power from individuals. To say nothing if companies start replacing their current employees with the winners from these kinds of events.
My first real job interview in 1999 worked exactly like this. A pool of candidates came in and were given the same 2 day coding assignment. We were paid for our time and worked on site. It was a great experience, but I tend to like working on interesting problems (which I guess is a valuable trait in itself).
It especially made sense at this company because they were using an obscure coding platform and needed to train everybody from scratch. So you were actually learning the language a bit while performing the test. Mentors went around and asked you your thought process as you worked an gave some helpful nudges.
I did get the job and to this day it was the best office environment of my life. I wish all tech companies were as well run as that one.
I'd happily do that type of interview as two days of money coming in is still great in its own right when you're unemployed.
Plus it seems like an utterly fair way of evaluating candidates that I don't really feel like trick questions, riddles, and high pressure whiteboard challenges accomplish.
One question/concern I have is: How much paperwork is involved in paying someone for just two days? For example, do you now need to file tax stuff (both state and federal), and how do you physically pay them (e.g. set up bank transfers, cash, etc)?
In an ideal world you'd just have people in for two days and hand them a small wad of cash at the end. But with the laws on the books and complexity of employment in general, something tells me the overhead of such a thing would be problematic.
And this event is an attempt to make showing up for a 48 hour 'work trial' a norm. This favors the younger, single population, and while you're working on whatever this event is, you are not putting more resumes out. There's the potential for abuse in getting free work out of applicants from other people mimicking this event.
Totally agree. Sounds like each applicant should be getting paid or something. Even so, dropping the rest of your life for two days stinks.
You have to balance the time it takes to tailor your resume to the company versus moving on and finding the next company to submit a resume to. At the extremes, some people don't tailor at all and throw their resume and cover letter at everyone in a suit. Others will do deep-dive research and make 27 drafts of a resume/cover to the point where they already know more about the company than the person who may hire them.
You know, there should be an app for that. Something where you can just put in everything, and then when sending out one resume to a particular company, it would help you customize it for them.
Maybe you could feed in the job ad, and the app uses some fancy NLP to then select which topics you should emphasize on your resume.
It should also keep track of what version you've sent out to whom, so that you can view it when talking to the potential employer on the phone.
Agree! I am tempted to show up with my 18 month old and have him run amok :)... or better still have the others take care of him while I show off my coding skills!
To be fair, that's not a self-contradictory position. It is quite possible that there could be a lack of qualified programmers, while employers are flooded with applications from unqualified programmers. The obvious solution to that problem is, of course, for companies to spend the time and money on training.
What a bizarre and compelling story. Glad to have read it.
Meanwhile I think the hiring problem/solution is staring us right in the face.
What would the world be like if contract/freelance/part time/short term work were the default?
Isn't it perhaps weird that there is an assumption companies and employees should bind their fates together, and, if it doesn't work out, one or both parties is pretty screwed because of an investment of time and money which will likely result in a person being unemployed and/or a company paying a person far beyond when they are providing value.
This is like getting married after one date. Every time.
If employees were assumed to be exploring many things simultaneously, both sides would have plenty of chances to gather meaningful data about the employer/employee relationship, and if it is really a great fit, a long term employment arrangement could be worked out, with a contract that reflects mutual responsibilities revolving around this shift to an all-eggs-in-one-basket situation for the employee - and likely a corresponding move to much more critical functions being performed for the company.
I cynically suspect the current concept of full-time work evolved to suit employers, it allows them to manipulate and scare employees, especially when (for example) health insurance is at stake. Employers naturally have more data about salaries and so forth, in general most employers have many employees, while most employees only have one employer. That is inherently asymmetrical. Now that certain skill sets are harder to hire for, it is hurting everyone.
But the situation was never that great from the beginning, let's figure out a way to make it better for everyone.
> What would the world be like if contract/freelance/part time/short term work were the default?
That's actually one of the reasons I find the idea of a guaranteed basic income so promising. The biggest thing making an "everybody freelances" world a dystopia rather than a eutopia (sic) is that it would eliminate any semblance of income stability.
Static long-term contracts would still be an option because of the reliability they offer to both sides, but it would give employers the benefit of at will employment without the drawbacks that normally has for the employees.
Of course I don't really see it happening in the US -- at least not in a way that's good for the employees. A lot of the welfare system in the US is still based on the idea of traditional long-term employment, even with Obamacare and all that decoupling it a bit.
That's actually one of the reasons I find the idea of a guaranteed basic income so promising. The biggest thing making an "everybody freelances" world a dystopia rather than a eutopia (sic) is that it would eliminate any semblance of income stability.
Don't forget health care. That plus a basic living stipend would be quite a revolution to the economy. We'd start to price activities more sanely, and use automation more effectively.
The people still driven by status will still work their asses off to get ahead, and in general I think things would still get done. With the energy resources and automation we already have, we can do this now.
This is an awesome typo. "Utopia" is a transliteration from Ancient Greek meaning "No place." The same rules of transliteration would make "eutopia" mean "good place."
"Utopia" came into English through a satire, the meaning being that nowhere's really paradise, but today we mostly use it without that edge, i.e., as if it really were spelled "eutopia."
The concept you're looking for is "savings". Contractors and freelancers charge a premium to compensate for the lack of income stability. If that premium is saved up, you get stability.
What's the weekly rate of the average freelance software developer? And how does that compare with that of a freelance bartender, nightwatchman or refuse collector?
Relying on a BI (at any feasible level) for even a fairly brief period of time is going to represent a severe drop in income for most skilled contractors, and thus people paying mortgages on their condos in SF are going to be just as worried about income instability as before.
It's a beautiful idea but the problem is implementation.
The government of most countries is already a powerful and corrupting force, giving it even the additional power and discretion to 'hand out' a basic income is terrifying to consider.
Ronald Coase won a Nobel Prize in Economics for asking and answering why individuals choose to form companies over contracting out their work.
In a frictionless, efficient market it is always cheaper to contract out work. But the world isn't frictionless. There are transaction costs. Search, information, bargaining, maintaining confidentiality and enforcing agreements all cost time and money. Meanwhile, overhead costs and the management error grow as in-house functions increase. Balancing labour transaction costs and management scaling inefficiencies results in an optimal firm size. This firm will outcompete less agile and well-integrated small firms and distended behemoths.
> What would the world be like if contract/freelance/part time/short term work were the default?
I've heard this line a lot. The interesting thing is that there are areas, even inside tech, that this is the default. And it's nto necessarily better. For example, steelworks or the oil industry. A pretty significant portion of the employees in these fields (including IT sectors) are contractors. They have minimal job security and limited motivation to excel (even in the steel industry where perks are fairly decent).
I know this empirically because whenever we have a job opening there is a queue of people from these industries looking for a more stable role, even if it means a pay cut. Which somewhat gets to the heart of it - this is about job security!
What you are describing works well when you look at the top 0.5%, or maybe less, of employees. For the rest, the current system has evolved to favour the employee and provide stability for them month-to-month.
Now don't get me wrong; it's imperfect, and we need to evolve the system again! But short-term working is not a coverall solution IMO.
But short-term working is not a coverall solution IMO.
Indeed. A coverall solution would be a basic income for all permanent residents, coupled with a nationalized healthcare program. People want stable employment because freelancing is so risky without the benefit of any guaranteed regular paycheck or insurance. If the government actually provided a minimum subsistence income and insurance program for working adults, there would be much less incentive to get "married" to a corporation, and the labor market would be much more fluid, fungible and efficient as a result.
Agreed. I'm guessing there should be (in the realm of possible solutions) some sort of intermediate arrangement, or a whole spectrum of intermediate arrangements. These may previously have been too complex to manage, but might now be plausible.
(Can't help but feel like there's some sort of parallel between this and conventional attitudes towards marriage! Just because marriage is a little bizzare doesn't mean that the only alternative should be bachelor life forever.)
People have kind of touched on this a bit, but I just want to say this as explicitly as possible, because I think this is a thing that's been kind of forgotten over time: Forcing employers to commit to their employees on some level was one of the most significant achievements of the labour movement.
Most people don't really want to have the 'flexibility' of working, because that also comes with having to find work on a regular basis. In some post-scarcity or at least post-austerity society this might be something people are willing to do, but most people aren't working because that work is something they have a passion for, they're doing it so they can do other things like have a home and a family.
Employers of this kind of labour would love nothing more than to schedule you whenever they felt like, have more part time employees at lower wages, and let you go if you miss even one shift.
"I cynically suspect the current concept of full-time work evolved to suit employers, it allows them to manipulate and scare employees, especially when (for example) health insurance is at stake. "
Before, getting paid _daily_ was the norm. Getting money for the whole month at a time is way more predictable.
Employers typically are financially much better suited to weather out economic slumps than individuals are.
On the average, it's to the employees benefit temporary employment is not the norm.
"employers naturally have more data about salaries and so forth, in general most employers have many employees, while most employees only have one employer. That is inherently asymmetrical."
This is very true. Unions are a one such leverage balancing mechanism.
I don't particularly enjoy the hiring process. It takes a lot of time, which is time I can't be building.
I think I would really, really not enjoy having to potentially hire a brand-new crop of people, or renegotiate every contract on my team, every time we hit a gatecheck, major deliverable, project checkpoint, etc.
The current concept of full-time work means I as an employee don't have to worry so much about not having a job in a week (it takes time to hire a new me, too), and also that the people I hire likely aren't going to disappear on me in a week, as well.
Moving to a "everyone short-term contracts" model means I have less security that this team I've spent a lot of my time trying to build may end up not being here in 6 months. It means my team members have less security that the coworker of theirs who is specializing in ____ will be here in 6 months.
Probationary periods in new hire contracts exist for that "this isn't a mutually good fit" issue.
Ultimately it feels like an "everyone is a contractor" default will end up increasing overhead for the company, reducing productive time available for people involved in hiring (my developers have to interview a new hire, as well), and less security for both the contractor and the employer.
The solution to overhead of hiring isn't "let's do more hiring". It's figuring out how companies can de risk the hiring process. Certainly moving everyone to contracts would do some de risking (definitely around 'parting ways'), but more revolutionary would be to figure out a way to de risk the 'finding talent' part of hiring.
> What would the world be like if contract/freelance/part time/short term work were the default?
The problem with this arrangement is the cost of health insurance. Currently, the insurance market heavily favors employer-paid coverage; it's much more expensive for freelancers to buy their own insurance.
With the ACA, this is no longer true, at least in NY. When I was an employee in 2013, my premium healthcare plan cost ~2400 / month for my family. I only paid half of that, but my employer was pying the other half. Now I am contracting and I bought the best plan in the NY exchange which costs ~1700 / month. It has less choice of doctors, but higher % coverage, and the in network list is pretty large. Also, the plans offered to corporate groups have changed a lot and the plan I was on in 2013 is no longer available.
If everyone was a freelance employee, and could be replaced at any time, what motivation would companies have to invest in their employees (training, etc)?
If I were ever in charge of hiring for many types of position (whether programming, or writing, or such), I think I would do something similar.
The advertisement will say "looking for full time X (must complete initial contract period of Y weeks)" or similar.
The best way to see if you like someone's work, is to see it. So, hire them for up to three months (telling them that this is what is happening, and why, and being completely upfront about it), and if it works out, hire them full time. Then, why not hire multiple people? If you have a program that needs work done, then hire six people to work on those parts for a couple of weeks. See who's work you like, then hire them full time.
This requires a change in both thinking, and how programming is done. You want to have nice chunks of work that can be completed by new people in a short period of time. But, I'm sure it's possible.
(Where I'm from, the way to get a full time job in many fields is: get casual work, get short term contracts, get longer term contracts, someone else dies or retires, you get offered a full time job. This is partly due to too many people looking for too few jobs. This is not an ideal situation, but does mean that by the time people are hired for the full time job, the people hiring them know them already, and the quality of their work.)
No, that's not similar. There's a huge difference there ...
Good consultants / freelancers have higher hourly rates than normal employees, to cover their expenses and the periods of inactivity. Plus really good ones are much more expensive simply because they can deliver value that can't be delivered by average employees, so they are expensive because there's demand for their skill-set.
Your solution for example would not get me hired by you. Because I hate probation periods. Because getting hired for only X weeks is a risk for me that has to be worth it. So either you're a really sexy company for which I'm dying to work for, or you must pay me enough for those 3 weeks to be worth it.
And furthermore, the relationship between a consultant hired for a limited amount of time and an employee on probation is very different, going beyond just price. A good consultant gets hired based on (initial) trust in that consultant's skill-set, wheres a probation period signals exactly the opposite.
Very few people would leave a job for a "chance" at another. So you'll limit yourself to only people currently without work, which is a much smaller pool and likely to be filled with a disproportionate number of recently fired people.
That's pretty much how it works here. Labour contracts include a provision that you can be fired for any reason at any point during the first three months with the company (they still have to pay you for all the days you're with them, of course). Conversely, they also include the clause that you can leave at any point during those three months without advance notice. After that, both parties must give a full month's advance notice to the other before terminating the relationship.
I've done a bit of both, and I can honestly say that the biggest problem with freelance work is that your work is short term and well defined.
I don't know how many times I could see client's problems, which weren't always what they thought they were, without any mandate to fix it. Sometimes they even hire you to do something that completely fly in the face of what they need. That's not fun.
If you're in it for the long haul you can allow yourself to take bigger risks, even if it's officially outside your responsibilities. What are they going to do? Fire you for fixing stuff? It is simply a more fun way to work and to interact with your peers, even if it may not be as financially rewarding.
Another option would be to hire fairly leniently, but prune ruthlessly and early.
In most jurisdictions, there is a trial period of sorts, typically 60 to 90 days, during which it is easy to fire an employee, before various rules about dismissal kick in. As far as I know, most companies don't really make use of this, except in really serious cases.
But assuming it is in fact easy to fire during this period, we could hire somewhat loosely, and then carefully evaluate the progress of the employee at the 60-day mark. And just dismiss the ones who aren't making good progress. We might dismiss half the hires early.
I don't know if I'm convinced "making contract work the default" is the right solution. But I do agree the lines should be blurred in terms of how companies approach their "hiring process". Companies won't change unless they perceive the change as bringing benefits to the company (ie. saving or making money). I think there will need to be some major success stories before we see widespread adoption of dramatically new hiring policies.
> What would the world be like if contract/freelance/part time/short term work were the default?
It appears to be what we are moving towards, and so far it ain't looking pretty. Sure, "our kind of people" profit from it, but mostly workers are being ruthlessly exploited on a massive scale without the protection offered to employees in most civilized countries outside the US.
> I cynically suspect the current concept of full-time work evolved to suit employers,
The reason there is a difference between full-time employment and contract work is regulations put in place to limit the power companies wield over its workers.
Companies like FedEx try to pass of its employees as "contract workers" to circumvent employee protections. I guarantee this is not done to benefit the employees.
I'm a startup founder and while this had been our initial approach to evaluating new engineers, our payroll company, PayChex, has specifically advised us to NOT do this. Why? Because it sends a red flag to the IRS to come after us for taxes for the period when they were a contractor.
Crazily enough PayChex has told us that the real solution here is for us to "sign" the person over to a contracting company so we can hire them thru the contracting company for the evaluation period. Yes we'll pay more for them since we have to pay that company's markup but we won't get gone after by the IRS. And, yes, it adds another layer of BS / paperwork. End result? We've hired no one because of this - its too hard to vet engineers without seeing their work. Sigh.
While that sounds like a reasonable hiring approach most of the contractors I know (in the UK and Ireland) wouldn't take permanency because contractors earn significantly more. Maybe it's a bit different in the US though.
What would the world be like if contract/freelance/part time/short term work were the default?
Many of the replies thus far have quite rightly pointed out that the predominate contract/freeland/short term model actually puts even more power in the employer's hands, and is often used in an abusive, diminishing way. It is full-time employment made worse -- all of the problems and detriments, with fewer of the benefits.
There is an alternative model, but it is extremely hard to make a success. I build systems for financial services, and have a long, proven track record (one of the products I built half a decade ago, barely changed since, was just acquired by another company for big money). I decided to go solo, set up a corporation, and pitch my independent services for short term engagements. The premise is that it amplifies my own motivations, focuses my work, and intrinsically improves my rewards.
A surgeon ready to swoop in and remove the cancer -- focusing on my specialty and utilizing my somewhat unique set of talents -- leaving a well-documented, working, tested, proven solution for your organization to pick up and run with. This can be for load sharing, for capacity extensions, or because certain talents don't exist on the team. It allows me to specialize in a way that I couldn't do in one engagement, and I don't end up whiling my days away reading Reddit (which is the case for a significant percentage of full-time workers pretty much everywhere).
It is extremely difficult to get businesses to buy into this model. The first problem is the illusion of a "learning curve" -- if you have a learning curve in what you do (the classic "employees can't be productive for the first n months), you probably don't actually know what you're doing. I saw this in one firm where everyone was sure it couldn't work because their mystical financial calculations were so complex it would take months to understand them. Only they weren't actually complex whatsoever -- everyone was just blissfully in the dark about how to calculate simple things like IRR, so it seemed like some sort of unique, in house mystery meat.
A bit of a rant -- I could go on for pages -- but honestly most firms can't utilize the contract style employee because their own processes are so broken, their projects so tightly coupled and intertwined and undocumented, that they can't imagine how to separate something out.
"...most firms can't utilize the contract style employee because their own processes are so broken, their projects so tightly coupled and intertwined and undocumented, that they can't imagine how to separate something out."
I frequently find it frustrating that an employer can have meetings and make specific plans for a rented person doing a one time project, but they generally don't know how to organize or make their own people more effective. It's like the employees are a given, but this outside thing needs special approval and funding so it needs to be handled well.
> if you have a learning curve in what you do (the classic "employees can't be productive for the first n months), you probably don't actually know what you're doing
Either that or you have a crapload of self-imposed complexity.
That said, some roles really do have a major learning curve due to the amount of background domain knowledge required.
I didn't even read the story after this gem:
"In 2012, for example, consulting firm Leadership IQ announced it had tracked 20,000 new hires over time and discovered that 46% of them had failed within 18 months. In other words, most recruiting practices are about as effective as a coin toss."
Now, what's wrong with this reasoning? :-)
Yeah they fail to understand that should the recruitment be a coin toss, 80% would fail.
This is because the good candidates resume are hidden in a forest of bad resume, from people submitting resume for jobs they are obviously unqualified for.
> In 2012, for example, consulting firm Leadership IQ announced it had tracked 20,000 new hires over time and discovered that 46% of them had failed within 18 months. In other words, most recruiting practices are about as effective as a coin toss.
This does not take into account amount of candidates that have been rejected.
"We found zero relationship. It’s a complete random mess."
Something overlooked is the millions (billions?) of non-productive labor hours that go into the failed traditional hiring process, when even the smartest guys in the room have to admit that upon statistical analysis its all a waste of time. That's an enormous staggering financial drain on the economy.
Overall, across the entire economy, the overall minimum cost mode of hiring would appear to be a union work hall. So employer shows up and the dude who's been sitting there unemployed the longest is hired.
This would require incompetent people to admit their own incompetence, so its never going to be implemented, we're all above average here and just because no one else can do traditional hiring correctly doesn't mean I won't be the first to ever get it right because I've been told since birth I'm a special snowflake and I have the participation trophies to prove it, etc.
I'm not saying we have to unionize (whole nother topic) but stealing the union work hall "technology" would seem a very wise idea.
What's important here is that what you have here is only one side of the coin.
If you're looking at the performance of only those who make it successfully, what you don't know is how the people who didn't make it through the process would perform on a comparative basis.
For example.... There's a pool of candidates, 90% weak, 10% strong (weak and strong if they were measured post-hiring). If your recruitment process took that ratio and ensures you hire 50% weak and 50% strong, that's obviously not completely wasted effort.
From the NYT's article quoting Laszlo Bock: "Years ago, we did a study to determine whether anyone at Google is particularly good at hiring."
Google made the classic mistake of using the interviewer as the predictor of interest. Meanwhile, decades of research has shown it's not who does the asking but how and what you ask. For example, structured interviews are about 50% more predictive of job performance (r = .51) compared to unstructured interviews (i.e., the way almost everyone interviews; r = .38).
So why did Google run this experiment when they had an army of Industrial/Organizational Psychologists who already knew the research? They wanted to collect their own data and test the theories on their own employees, which I encourage and applaud.
Do you have a cite for this? I thought Google looked at interviewers and found that no particular interviewer did any better than any other, except, literally, one guy in a narrow sub-specialty. That's quite a lot different than concluding a 50% success rate is no better than chance, which I agree would be problematic at best, flat wrong at worst if the expected occurrence was low.
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And this event is an attempt to make showing up for a 48 hour 'work trial' a norm. This favors the younger, single population, and while you're working on whatever this event is, you are not putting more resumes out. There's the potential for abuse in getting free work out of applicants from other people mimicking this event.
(How long until we're tossed into an arena with bows and arrows only to survive and rewrite every algorithm from a CS degree on a whiteboard?)
Although the 46% percentage figure was shown in this thread to be wrong/bad, even if you consider hiring as a coin-toss, your success still depends on how many resumes you can put out there. You have to balance the time it takes to tailor your resume to the company versus moving on and finding the next company to submit a resume to. At the extremes, some people don't tailor at all and throw their resume and cover letter at everyone in a suit. Others will do deep-dive research and make 27 drafts of a resume/cover to the point where they already know more about the company than the person who may hire them. I still think there's significant coin-tossery going on: if the companies are having to filter everyone because there is so much volume, then you must at least do as much as you can to increase your own output. The 'trick' then is to just know someone who can put in a good word (and it really has always been an option)
This may work for some job sectors as a novel hiring process (it's certainly overblown for retail/fast food) but if it scales up, you'll end up taking significant bargaining power from individuals. To say nothing if companies start replacing their current employees with the winners from these kinds of events.
It especially made sense at this company because they were using an obscure coding platform and needed to train everybody from scratch. So you were actually learning the language a bit while performing the test. Mentors went around and asked you your thought process as you worked an gave some helpful nudges.
I did get the job and to this day it was the best office environment of my life. I wish all tech companies were as well run as that one.
I'd happily do that type of interview as two days of money coming in is still great in its own right when you're unemployed.
Plus it seems like an utterly fair way of evaluating candidates that I don't really feel like trick questions, riddles, and high pressure whiteboard challenges accomplish.
One question/concern I have is: How much paperwork is involved in paying someone for just two days? For example, do you now need to file tax stuff (both state and federal), and how do you physically pay them (e.g. set up bank transfers, cash, etc)?
In an ideal world you'd just have people in for two days and hand them a small wad of cash at the end. But with the laws on the books and complexity of employment in general, something tells me the overhead of such a thing would be problematic.
Totally agree. Sounds like each applicant should be getting paid or something. Even so, dropping the rest of your life for two days stinks.
You have to balance the time it takes to tailor your resume to the company versus moving on and finding the next company to submit a resume to. At the extremes, some people don't tailor at all and throw their resume and cover letter at everyone in a suit. Others will do deep-dive research and make 27 drafts of a resume/cover to the point where they already know more about the company than the person who may hire them.
You know, there should be an app for that. Something where you can just put in everything, and then when sending out one resume to a particular company, it would help you customize it for them.
Maybe you could feed in the job ad, and the app uses some fancy NLP to then select which topics you should emphasize on your resume.
It should also keep track of what version you've sent out to whom, so that you can view it when talking to the potential employer on the phone.
We're told our immigration policy has caused a drought in programmers, yet employers are flooded with applications from the nonexistent workforce.
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Meanwhile I think the hiring problem/solution is staring us right in the face.
What would the world be like if contract/freelance/part time/short term work were the default?
Isn't it perhaps weird that there is an assumption companies and employees should bind their fates together, and, if it doesn't work out, one or both parties is pretty screwed because of an investment of time and money which will likely result in a person being unemployed and/or a company paying a person far beyond when they are providing value.
This is like getting married after one date. Every time.
If employees were assumed to be exploring many things simultaneously, both sides would have plenty of chances to gather meaningful data about the employer/employee relationship, and if it is really a great fit, a long term employment arrangement could be worked out, with a contract that reflects mutual responsibilities revolving around this shift to an all-eggs-in-one-basket situation for the employee - and likely a corresponding move to much more critical functions being performed for the company.
I cynically suspect the current concept of full-time work evolved to suit employers, it allows them to manipulate and scare employees, especially when (for example) health insurance is at stake. Employers naturally have more data about salaries and so forth, in general most employers have many employees, while most employees only have one employer. That is inherently asymmetrical. Now that certain skill sets are harder to hire for, it is hurting everyone.
But the situation was never that great from the beginning, let's figure out a way to make it better for everyone.
That's actually one of the reasons I find the idea of a guaranteed basic income so promising. The biggest thing making an "everybody freelances" world a dystopia rather than a eutopia (sic) is that it would eliminate any semblance of income stability.
Static long-term contracts would still be an option because of the reliability they offer to both sides, but it would give employers the benefit of at will employment without the drawbacks that normally has for the employees.
Of course I don't really see it happening in the US -- at least not in a way that's good for the employees. A lot of the welfare system in the US is still based on the idea of traditional long-term employment, even with Obamacare and all that decoupling it a bit.
Don't forget health care. That plus a basic living stipend would be quite a revolution to the economy. We'd start to price activities more sanely, and use automation more effectively.
The people still driven by status will still work their asses off to get ahead, and in general I think things would still get done. With the energy resources and automation we already have, we can do this now.
"Utopia" came into English through a satire, the meaning being that nowhere's really paradise, but today we mostly use it without that edge, i.e., as if it really were spelled "eutopia."
Relying on a BI (at any feasible level) for even a fairly brief period of time is going to represent a severe drop in income for most skilled contractors, and thus people paying mortgages on their condos in SF are going to be just as worried about income instability as before.
The government of most countries is already a powerful and corrupting force, giving it even the additional power and discretion to 'hand out' a basic income is terrifying to consider.
In a frictionless, efficient market it is always cheaper to contract out work. But the world isn't frictionless. There are transaction costs. Search, information, bargaining, maintaining confidentiality and enforcing agreements all cost time and money. Meanwhile, overhead costs and the management error grow as in-house functions increase. Balancing labour transaction costs and management scaling inefficiencies results in an optimal firm size. This firm will outcompete less agile and well-integrated small firms and distended behemoths.
http://www3.nccu.edu.tw/~jsfeng/CPEC11.pdf
I've heard this line a lot. The interesting thing is that there are areas, even inside tech, that this is the default. And it's nto necessarily better. For example, steelworks or the oil industry. A pretty significant portion of the employees in these fields (including IT sectors) are contractors. They have minimal job security and limited motivation to excel (even in the steel industry where perks are fairly decent).
I know this empirically because whenever we have a job opening there is a queue of people from these industries looking for a more stable role, even if it means a pay cut. Which somewhat gets to the heart of it - this is about job security!
What you are describing works well when you look at the top 0.5%, or maybe less, of employees. For the rest, the current system has evolved to favour the employee and provide stability for them month-to-month.
Now don't get me wrong; it's imperfect, and we need to evolve the system again! But short-term working is not a coverall solution IMO.
Indeed. A coverall solution would be a basic income for all permanent residents, coupled with a nationalized healthcare program. People want stable employment because freelancing is so risky without the benefit of any guaranteed regular paycheck or insurance. If the government actually provided a minimum subsistence income and insurance program for working adults, there would be much less incentive to get "married" to a corporation, and the labor market would be much more fluid, fungible and efficient as a result.
(Can't help but feel like there's some sort of parallel between this and conventional attitudes towards marriage! Just because marriage is a little bizzare doesn't mean that the only alternative should be bachelor life forever.)
Most people don't really want to have the 'flexibility' of working, because that also comes with having to find work on a regular basis. In some post-scarcity or at least post-austerity society this might be something people are willing to do, but most people aren't working because that work is something they have a passion for, they're doing it so they can do other things like have a home and a family.
Employers of this kind of labour would love nothing more than to schedule you whenever they felt like, have more part time employees at lower wages, and let you go if you miss even one shift.
Committment forces cultivation of talent rather than frontrunning.
Before, getting paid _daily_ was the norm. Getting money for the whole month at a time is way more predictable.
Employers typically are financially much better suited to weather out economic slumps than individuals are.
On the average, it's to the employees benefit temporary employment is not the norm.
"employers naturally have more data about salaries and so forth, in general most employers have many employees, while most employees only have one employer. That is inherently asymmetrical."
This is very true. Unions are a one such leverage balancing mechanism.
I think I would really, really not enjoy having to potentially hire a brand-new crop of people, or renegotiate every contract on my team, every time we hit a gatecheck, major deliverable, project checkpoint, etc.
The current concept of full-time work means I as an employee don't have to worry so much about not having a job in a week (it takes time to hire a new me, too), and also that the people I hire likely aren't going to disappear on me in a week, as well.
Moving to a "everyone short-term contracts" model means I have less security that this team I've spent a lot of my time trying to build may end up not being here in 6 months. It means my team members have less security that the coworker of theirs who is specializing in ____ will be here in 6 months.
Probationary periods in new hire contracts exist for that "this isn't a mutually good fit" issue.
Ultimately it feels like an "everyone is a contractor" default will end up increasing overhead for the company, reducing productive time available for people involved in hiring (my developers have to interview a new hire, as well), and less security for both the contractor and the employer.
The solution to overhead of hiring isn't "let's do more hiring". It's figuring out how companies can de risk the hiring process. Certainly moving everyone to contracts would do some de risking (definitely around 'parting ways'), but more revolutionary would be to figure out a way to de risk the 'finding talent' part of hiring.
The problem with this arrangement is the cost of health insurance. Currently, the insurance market heavily favors employer-paid coverage; it's much more expensive for freelancers to buy their own insurance.
This requires a change in both thinking, and how programming is done. You want to have nice chunks of work that can be completed by new people in a short period of time. But, I'm sure it's possible.
(Where I'm from, the way to get a full time job in many fields is: get casual work, get short term contracts, get longer term contracts, someone else dies or retires, you get offered a full time job. This is partly due to too many people looking for too few jobs. This is not an ideal situation, but does mean that by the time people are hired for the full time job, the people hiring them know them already, and the quality of their work.)
Good consultants / freelancers have higher hourly rates than normal employees, to cover their expenses and the periods of inactivity. Plus really good ones are much more expensive simply because they can deliver value that can't be delivered by average employees, so they are expensive because there's demand for their skill-set.
Your solution for example would not get me hired by you. Because I hate probation periods. Because getting hired for only X weeks is a risk for me that has to be worth it. So either you're a really sexy company for which I'm dying to work for, or you must pay me enough for those 3 weeks to be worth it.
And furthermore, the relationship between a consultant hired for a limited amount of time and an employee on probation is very different, going beyond just price. A good consultant gets hired based on (initial) trust in that consultant's skill-set, wheres a probation period signals exactly the opposite.
I don't know how many times I could see client's problems, which weren't always what they thought they were, without any mandate to fix it. Sometimes they even hire you to do something that completely fly in the face of what they need. That's not fun.
If you're in it for the long haul you can allow yourself to take bigger risks, even if it's officially outside your responsibilities. What are they going to do? Fire you for fixing stuff? It is simply a more fun way to work and to interact with your peers, even if it may not be as financially rewarding.
In most jurisdictions, there is a trial period of sorts, typically 60 to 90 days, during which it is easy to fire an employee, before various rules about dismissal kick in. As far as I know, most companies don't really make use of this, except in really serious cases.
But assuming it is in fact easy to fire during this period, we could hire somewhat loosely, and then carefully evaluate the progress of the employee at the 60-day mark. And just dismiss the ones who aren't making good progress. We might dismiss half the hires early.
It appears to be what we are moving towards, and so far it ain't looking pretty. Sure, "our kind of people" profit from it, but mostly workers are being ruthlessly exploited on a massive scale without the protection offered to employees in most civilized countries outside the US.
The reason there is a difference between full-time employment and contract work is regulations put in place to limit the power companies wield over its workers.
Companies like FedEx try to pass of its employees as "contract workers" to circumvent employee protections. I guarantee this is not done to benefit the employees.
Crazily enough PayChex has told us that the real solution here is for us to "sign" the person over to a contracting company so we can hire them thru the contracting company for the evaluation period. Yes we'll pay more for them since we have to pay that company's markup but we won't get gone after by the IRS. And, yes, it adds another layer of BS / paperwork. End result? We've hired no one because of this - its too hard to vet engineers without seeing their work. Sigh.
Many of the replies thus far have quite rightly pointed out that the predominate contract/freeland/short term model actually puts even more power in the employer's hands, and is often used in an abusive, diminishing way. It is full-time employment made worse -- all of the problems and detriments, with fewer of the benefits.
There is an alternative model, but it is extremely hard to make a success. I build systems for financial services, and have a long, proven track record (one of the products I built half a decade ago, barely changed since, was just acquired by another company for big money). I decided to go solo, set up a corporation, and pitch my independent services for short term engagements. The premise is that it amplifies my own motivations, focuses my work, and intrinsically improves my rewards.
A surgeon ready to swoop in and remove the cancer -- focusing on my specialty and utilizing my somewhat unique set of talents -- leaving a well-documented, working, tested, proven solution for your organization to pick up and run with. This can be for load sharing, for capacity extensions, or because certain talents don't exist on the team. It allows me to specialize in a way that I couldn't do in one engagement, and I don't end up whiling my days away reading Reddit (which is the case for a significant percentage of full-time workers pretty much everywhere).
It is extremely difficult to get businesses to buy into this model. The first problem is the illusion of a "learning curve" -- if you have a learning curve in what you do (the classic "employees can't be productive for the first n months), you probably don't actually know what you're doing. I saw this in one firm where everyone was sure it couldn't work because their mystical financial calculations were so complex it would take months to understand them. Only they weren't actually complex whatsoever -- everyone was just blissfully in the dark about how to calculate simple things like IRR, so it seemed like some sort of unique, in house mystery meat.
A bit of a rant -- I could go on for pages -- but honestly most firms can't utilize the contract style employee because their own processes are so broken, their projects so tightly coupled and intertwined and undocumented, that they can't imagine how to separate something out.
I frequently find it frustrating that an employer can have meetings and make specific plans for a rented person doing a one time project, but they generally don't know how to organize or make their own people more effective. It's like the employees are a given, but this outside thing needs special approval and funding so it needs to be handled well.
Either that or you have a crapload of self-imposed complexity.
That said, some roles really do have a major learning curve due to the amount of background domain knowledge required.
This is because the good candidates resume are hidden in a forest of bad resume, from people submitting resume for jobs they are obviously unqualified for.
Pretty well explained in http://www.joelonsoftware.com/articles/FindingGreatDeveloper...
It takes the base rate of successful performance into account.
This does not take into account amount of candidates that have been rejected.
Like the Google stories, which also are not true.
Shame, the Staffup Weekend in itself would have been an interesting writeup.
Something overlooked is the millions (billions?) of non-productive labor hours that go into the failed traditional hiring process, when even the smartest guys in the room have to admit that upon statistical analysis its all a waste of time. That's an enormous staggering financial drain on the economy.
Overall, across the entire economy, the overall minimum cost mode of hiring would appear to be a union work hall. So employer shows up and the dude who's been sitting there unemployed the longest is hired.
This would require incompetent people to admit their own incompetence, so its never going to be implemented, we're all above average here and just because no one else can do traditional hiring correctly doesn't mean I won't be the first to ever get it right because I've been told since birth I'm a special snowflake and I have the participation trophies to prove it, etc.
I'm not saying we have to unionize (whole nother topic) but stealing the union work hall "technology" would seem a very wise idea.
If you're looking at the performance of only those who make it successfully, what you don't know is how the people who didn't make it through the process would perform on a comparative basis.
For example.... There's a pool of candidates, 90% weak, 10% strong (weak and strong if they were measured post-hiring). If your recruitment process took that ratio and ensures you hire 50% weak and 50% strong, that's obviously not completely wasted effort.
Google made the classic mistake of using the interviewer as the predictor of interest. Meanwhile, decades of research has shown it's not who does the asking but how and what you ask. For example, structured interviews are about 50% more predictive of job performance (r = .51) compared to unstructured interviews (i.e., the way almost everyone interviews; r = .38).
So why did Google run this experiment when they had an army of Industrial/Organizational Psychologists who already knew the research? They wanted to collect their own data and test the theories on their own employees, which I encourage and applaud.
She's an "ideas person", isn't she.