It’s coming faster than you think. And for those resisting change, it might be time to think about re-structuring salary remuneration in line with the times in order to retain outstanding talent.
The Gig economy pushes towards temporary, flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees. And though it might not seem real, a study by Intuit predicted that by 2020, 40 percent of workers would be independent contractors. Forbes, back in 2014, estimated 50 percent would be engaged in freelancing.
In this increasingly de-coupled digital world, a lot of jobs can be done from just about anywhere. There are plenty of Australian accountants who tweet about journeys to far away lands while continuing to be in touch and connected with clients. At the same time, the labour forces are being engaged overseas in offshoring (labour hire firms) and outsourcing (quality work managed by the outsource provider).
And the current reality is that the very formal salary structure is rigid, and doesn’t actually support the ability to cope with people moving through their lives. To some extent society is playing a massive catch up with peoples lives in this new century. If we look at sick days (daily adjustments) up to hard won benefits like maternity and paternity, there is the need for flexibility in people’s lives. People aren’t robots, and the work-employment relationship has struggled most of last century to ensure a fairly consistent salary for all cases. Certainly there are plenty of people warning about the issues in the rise of the gig economy.
However, the gig economy and the freelance economy, are destabilizing forces that are becoming prevalent, and whether you argue / agree that supply or demand is driving the movement, the fact is that the gig economy is on the upswell. There are certainly more enablers out there, whether it is Uber enabling their drivers to operate portable vending machines out of their cars, or software companies supporting accounting and bookkeeping for freelancers.
We’ve already seen the end of the “life-time” job, and into this century we’ve seen employees moving around several jobs before they’ve reached 30, with a couple of freelance gigs not unusual.
Certainly, employers have to invest in employees fresh out of university, and we continually hear that this investment is difficult to make with high turnover of employees. At the other end of the argument, employees don’t want to spend 10 or 15 years to become partner in an accounting firm.
The big question is what will happen to the fixed salaries of the Australian accounting world. There is argument to suggest that a fixed base salary that never changes depending on employee’s personal life and situation will not survive the gig economy. Freelancers are already voting with their digital feet for flexibility in working arrangements / income arrangements. And so fixed employees and fixed salary agreements must lessen in a digital world, though whether a fixed employee / fixed salary remuneration can ever be adequately identified to meet the needs of all digital parties remains the enigma.
At the moment, there seems little interest by Australian accountants in moving towards a more flexible remuneration model, thus enabling other business models like freelancing and outsourcing.