Fractionalized Employment Now!

Yet even though work is important most of us do not define ourselves solely by workWe have many other identities and responsibilities parent caregiver sailor artistamp8230 that make us who we are or passions we wish to pursueTo integrate and deal with the spectrum of what life brings we could work at a job with all its benefits but also constraints or be a freelancerindependent worker with all its freedoms but uncertaintiesToday due to several forces there is the possibility of another way as we architect the future of workA way that benefits both the individual employee and the firmFour ForcesFour concurrent forces are resculpting the nature of work and what constitutes a company in the most dramatic ways in over a century1 AI AI will significantly enhance productivity Companies will be be able to do more with less While new types of jobs will be created and enhanced productivity can allow companies to invest in new areas so employment will grow it is very likely that the need for employees in any existing knowledge role will declinePeople will either do higher level tasks or be trained for new tasks or see a demand for their existing skills diminished2 Declining populations combined with an explosion of older people Except for the continent of Africa most countries particularly Europe the US China and Japan which account for most of the global GDP are seeing shrinking populationsAt the same time all these countries are seeing rapidly aging populations with 10000 people turning 60 every day in the US Many of these aging folks have skills and expertise that will remain critical in an AI age perspective mentoring people expertise in craft and are likely to want to or need to work for financial or other reasons but may not want to or be in a position to work fulltime3 Covid19 Unbundled and distributed work has changed peopleamp8217s mindsets Our minds are like champagne corks that once opened swell and do not fit back in the bottle Everything is being questioned from the nature of work to the role of managementPeople want to and need to work but many now no longer ask how do I find time for my life in a world of work but rather how does work fit in my life4 Generational Mindsets and the SideGig Todayamp8217s reality is that 66 percent of GenZ with a fulltime job in the US have a side gig or side hustle and 76 percent want to work for themselves A plethora of new marketplaces from UpWork to Etsy to Shopify are enabling the feeding of passion projects enhancing optionality and increasing incomeThe Fractionalized EmployeeToday most companies combine three types of work forces1 A fulltime employee2 A fulltime or parttime contracted employee from another firm eg Wipro or Cap Gemini3 Freelancers directly or via an intermediate firmFulltime employees are usually the backbone of any company and its culture with contracted and freelancers being mixed in to expand expertise and manage oscillating workloads in a costeffective mannerWe may now want to think of a fourth type of worker to reflect the forces of technology shifting demographics and new mindsets The Fractionalized EmployeeImagine if one could get both the continuity and loyalty of a longterm employee with the flexibility of cost management of a part time employee and the expertise of a freelancer and do so in a way that both grows employees and retains them in the long runThis is the Fractionalized EmployeeEvery employee in the company is given a choice to work 100 75 or 50 of their timeThey get to select this at the beginning of every year or can adjust to a different level when a life event occurs health birth of a child need to take care of a parent a passion that needs to be attended to or other life issuesNo longer does an employee have to choose between staying or going or being torn trying to do two things at one time If they wish to try out a different type of noncompetitive job starting a gaming company amp8211assuming they are not working at a gaming companyor being an artist or writing a book it behooves their employer from letting them do so because retaining half or three quarters of a talented person is better than zero As importantly these external skills or vocations will make the employee better rounded and probably more productive And there will be cost savings from both reduced compensation but also eliminating the friction and cost of severance rehiring and trainingAnd as AI makes companies realize they need to change adapt and manage new talent mixes fractionalized employment allows for a smart way to manage costs by dialing down employee cost while ensuring the dignity of continued employment the security of continued health care and the enablement of those employees using the nonemployment time to earn revenue or build new skills for an AI age or take care of personal needsAnd it will probably attract a lot of talent who may want to work 50 to 75 percent of their timeIncluding the more seasoned who might only want to work half time As countries grapple with aging and declining populations this is one way to address this issueFor the employee they do not have to give up an income stream health benefits or a part of their identity to build new skills pursue new horizons or take care of lifeamp8217s events Over the course of a career they can dial up and down the percentage they workThe Fractionalized Employee model will allow companies to retain talent grow talent mix and match talent in ways that are truly winwinEmployees gain greater flexibility optionality opportunity for growth managing life stages and time to build additional expertiseEmployers can attract new types of talent retain stars elongate the careers of seasoned experts and long time employees calibrate costs in humane ways that do not negatively impact culture and enhance adaptability to changing circumstancesOvercoming the Hurdles to Fractionalized EmploymentThe fact that outside Australia and some countries in Europe this is a very rare option is due to several concerns among employers which need to be addressedThere are many concerns from it will be hard to implement to employees will use this to prepare for their next gig to customers and clients will find it unacceptableWe must lose these controlling mindsets fear filled mindsets and lack of imagination mindsetsEmployee Flight Talent is not owned by a company They work for the company Giving them more flexibility is likely to increase retention since talent can now do their side hustle or passion project openly and bring that expertise and credibility into the company The time they have for themselves can help them look after their families or try new stuff without having to leave their company They often can also discover that the the grass is greener on the other side because it is fertilized with bullshit Trust talent and they will trust backClientCustomer Challenges Clients and Customers are likely to embrace this for a variety of reasons First they are likely in an AI age want to continue to access their key talent but given productivity increases not need as much Second if given a choice between not having access to the folks they want or less access they are likely to opt for limited access Third coverage can be guaranteed because fractionalized employees can be 100 percent available during key periods and the savings from their compensation can be used to provide customers with a wider palette of talent or other coverageMost talent organizations are really good and can definitely incorporate this new type of worker by adopting the following process to make this manageableLimited Choices Employees who wish to work less than full time but get full health benefits and prorated financial benefits such as bonuses or equity should be given only two alternative levels50 percent of full time or 75 percent of full time This limitation makes the program easier to administrate and manage If people were allowed to select any percentage it would be a nightmare for payroll and to arrange coverage when they were off workLimited Sign UpChange Periods An employee can only decide to change their percentage once a year during a particular twoweek periodamp8212perhaps in September of the previous year for the following year The only exception would be a major life or health event This enables companies to forecast how many workers they will need and how work gets covered It also enables far easier administrationLimited Eligibility Being selective helps funnel high performing candidates into the fractionalized program a key measure since the program is designed for the companyamp8217s best talent and those who are wellversed in the companyamp8217s culture and processes To limit eligibility the following criteria are usefulaHaving a minimum number of years of service For example one must have worked in the company for at least x years full time before being eligiblebAchieving a specific level of performance or a minimum rating level only candidates with levels evaluationcRestricting eligibility Certain roles which require fulltime presence such as overseeing a large team or providing continuous service to a highly demanding customerCompanies that allow for Fractionalized Employment are going to have a significant advantage in a world of AI changing demographics new mindsets and emerging marketplacesPosted at MediaVillage through the Thought Leadership selfpublishing platformClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillageorgMyersBizNet

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