Aug 2016

The Shamrock Organisation and the high costs of a Contingent workforce

By: Odyssey Publication
Tags: Freelance, Independent contractors, Shamrock organisation

Just recently an article noted working as a short-term contractor, casual employee, or freelancer is taking its toll on Australian workers.

At the same time we are seeing research from the Australian Bureau of Statistics and the journal Social Indicators Research, indicating that since 1984 casual employment in Australia has grown from 15 per cent of the workforce to 25 per cent.

The explosion in independent contractors, who now make up more than 10 per cent of workers, and the number of people in non-permanent jobs, is about 40 per cent of the workforce.

The Irish author/philosopher Charles Handy first coined the term “portfolio worker” as part of a “shamrock organisation“, in which professional core workers, freelance and part-time/temporary workers each form one leaf of the shamrock.

It is noted that the “core group” is becoming an increasingly smaller group with developments in e-commerce and teleworking, which has led to downsizing and restructuring. This should translate for accountants into reduced size of office space and fixed rentals.  As this article notes, the office has had its day.

And with digitisation allowing for all records to be digitally stored, there should be no need for any paper or storage in an accountant’s office. Side note: Just recently a visitor to Odyssey’s office was stunned that there is no paper storage at the Odyssey office. With over 200 professional staff, not one piece of office floorspace is required for paper storage.

The second leaf of the clover is the peripheral workers, that are the part-time, temporary and portfolio workers that are employed as and when required. This constitutes the greater proportion of staff for companies.

And the last leaf is the “Outsourced workers” who are not employed by the organisation, but are paid to complete a particular and specialised task such as advertising, skills training or overflow work. This group includes freelance workers, subcontractors, agencies and the self employed. These people are hired for their skills and paid for results.

Going back to the original article, this theme has been repeated several times over the past few years, with a 2012 article referring to the same Australian Bureau of Statistics casual employment percentage of 25%

Around the same time as the above 2012 article, casual labour issues in France, as noted in this 2012 NY Times article commented on longer term participation in the workforce with 24% of workers aged 15 to 29 have simply given up looking for work.

In this article, the floating generation was noted as seeing 42 percent working in temporary employment, up from 33% a decade previously. And some 30 percent were employed part-time which was an increase of 9 percent. In France 82 percent of people hired today are on temporary contracts.

It will be interesting to see how this trend towards casual employment of resources develops in Australia, with offshoring, outsourcing and automation impacting Australian casual workers in the accounting arena. As the article notes, how well Australian workers can adopt and adapt to the changing workforce composition will determine how well Australia can keep a productive, supportive and diverse workplace.