Ted: Thoughts On The Changing Workforce

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Oaken Financial

September 25, 2019


It’s interesting to hear Ted describe how much easier it was for a young person to build a career back “in his day”. As Ted remembers it, in those days, if you had an undergraduate degree companies were eager to hire you and put you on the fast-track to middle management. Things have definitely changed since then, and as Ted notes in this Saversodes video, younger workers today face a work environment undergoing a tremendous transformation.

The Fourth Industrial Revolution

In his address to the 2016 World Economic Forum meeting in Davos, Switzerland, Klaus Schwab, founder and executive chairman of the World Economic Forum, first introduced the idea that we’re now in the Fourth Industrial Revolution.

To support this claim, Schwab described how the introduction of water and steam power marked the beginning of the First Industrial Revolution and mechanized many tasks that previously could only be performed manually. The Second Industrial Revolution made use of electricity to power early versions of modern factories, while the Third Industrial Revolution introduced transistors and computer processors that performed complex mathematical calculations.

This brought about some truly astounding capabilities leading eventually to incredible accomplishments, not the least of which was the 1969 moon landing. Looking at the pace of new digital developments and the promise of further innovations, Schwab suggests we’ve now entered the Fourth Industrial Revolution.

“The speed of current breakthroughs has no historical precedent,” Schwab noted in his discussion. “When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance.”

More recently, emerging technologies have led to the development of digital platforms like Uber and Freelancer. These on-demand job apps match independent workers with individuals looking for a specific service and the entire engagement from initial contact all the way to invoicing and final payment is facilitated through the app. Whether you need a drive to the airport or require assistance with a one-off website design project, there are now a number of sites available to help you connect with someone to help you.

Growth in temporary employment

While temporary workers have always been part of the Canadian workforce, they’ve mostly taken the form of contractors and freelancers. Stats Canada currently places the number of temporary workers at 2.1 million or 13.3% of the workforce in its most recent Labour Force Survey update. This is a significant increase over the 1.4 million, or 11.8%, of all workers categorized as temporary in 1998.

As the update notes, even though the number of Canadians working in temporary positions is relatively small compared to the entire workforce, over the past 20 years growth in temporary employment has consistently outpaced growth in permanent employment. This trend is expected to increase as the adoption of on-demand job apps becomes more widespread.

A 2018 study by the Bank of Montreal, provides some insight into why more people are choosing to opt for temporary employment. When asked why they prefer part-time or “gig” work, the most popular response, cited by 60% of respondents, was that it was a personal or lifestyle decision. The second most common response was the need for a new challenge.

And it’s not just the Millennial and Gen Z generations taking part in this emerging “gig economy”. As noted in the Bank of Montreal report, of the baby boomers who responded to the survey, 31% took on gig work as a way to supplement their income, compared to just 10% of Gen Xers and 9% of millennials.

Drawbacks of the gig economy

A recent finding by the U.S. National Labor Relations Board recently found that Uber drivers are independent contractors and not Uber employees. This is an important distinction as it means that Uber and other companies offering similar services, are not required to provide additional employee benefits.

Similar clashes are also taking place in Canada and earlier this year, a class action lawsuit has been launched against Uber that will soon be heard in court. In addition, there have also been attempts to unionize that if successful, could force app-based services to provide benefits including guaranteed wages and healthcare.