Kaja Kallas: The New Reality of Work

Kaja Kallas

In political discussions, we often ask whether a specific policy will create or destroy jobs. The success of an economic sector is often measured by the number of jobs it provides. The question of jobs is particularly topical in the context of new businesses or start-ups, because they do not, as a rule, create jobs for masses. But perhaps we are not asking the right questions. Shouldn’t we be focusing on the new reality of work instead? Maybe we shouldn’t prefer stable long-term contracts and assess the success of economic sectors by the number of jobs?

The emerge of Industry 4.0 affects every part of the economy and the society. The digital world is now an integral part of our lives and influences the way we think, our actions and desires. Our behaviour has changed a lot. This has happened imperceptibly, and has also affected the way we work. People have more choices than ever before. They want to consume wherever and whenever they want. The same applies to work.

At present, labour laws are built around a certain ideal – a stable, long-term contract with one employer. However, this is no longer the reality for the majority of people. In 2015, 75 percent of people were on interim, short contracts or informal agreements or worked for a family without a contract. Over 60 percent of all workers had no contract. In Europe, 15 percent of workers are self-employed, in the US the percentage is as high as 25. The creation and loss of jobs is in constant motion – 20 percent of all jobs are created or destroyed every year. 50 percent of today’s children will work at positions that do not yet exist today.

Moreover, companies are no longer eternal. The average corporate life expectancy is 15 years, so there is no chance of a lifetime working for a single employer. Nor does a stable and steady job automatically mean a good job these days. Even more interestingly, people no longer dream of this ideal. The workers of new generations have completely different expectations for their work. They increasingly find it more important to have a good working experience, a nice working environment, and personal development, than a good salary. They are seek personal freedom at work.

Thomas Malone, a professor at the Massachusetts Institute of Technology, wrote that in the long term, these changes may be more important for businesses than democratic transition has been for the governments. Companies should treat their employees as internal customers, because they have individual needs. Previously, an employee had to adapt to the organization, but now, a modern organization adapts to the needs of employees. Companies who make their employees happy will win the war for talents.

Innovation, creativity and a sense of initiative, as well as the ability to maintain relationships with others are the keywords that count in modern businesses. Increasingly, we see that the working relationship is less direct and clear. Americans even have even come up with the concept of a tempreneur, that is, the combination of a temporary worker and an entrepreneur. It has been pointed out that long-term contracts slow down the entrepreneurial mind, which is one of the key qualities of future employees. Work is no longer a place to go, but something to do. Employees are more and more appreciative of their personal freedoms and the opportunity to reconcile work and private life, both for the purposes of raising children and investing time in their hobbies.

According to Forrester, a think tank, 29 percent of the global workforce are “people who work with information anytime and anywhere”. Man is a herd animal who wants to belong somewhere and nowadays we can work alongside people with whom we don’t share the same employer. There is even a concept for that – working alone together: to avoid traffic jams, you go to a co-working centre close to your home, define the length of your working day, exchange views with other people using the co-working space, even though you’re not professionally related.

According to sociologist Marc Halevy, the new generation of leaders should be more like entrepreneurs than managers, more designers than budget focused, more charismatic than technical, less like supervisors and less focused on the revenues. Josh Linker, an entrepreneur, has said that leaders need to encourage passion and autonomy, welcome new ideas, value the courage to fail and increase diversity. Employers can no longer insist on complete obedience, because they know that the future of their employees is not solely related to one employer.

Current labor standards are no longer applicable. Although some details of the system have been modified, the central ideas have remained the same. Labour Law Reforms are not questioning the key issue – the relationship between the employee and the employer.

In addition to labour laws, we should review social security systems that are entirely based on open-ended labor contracts and stable family models. Denis Pennel wrote in Ego Revolution at Work that we should not build our social system around a specific job, but rather take into account the whole job market. This is necessary for people to be able to switch easily between different employers. In practice, this could mean the rebirth of medieval guilds in a modern form.

We need further discussion on how to change the rules and define the problems that might appear with the new age of working. Given that we live in the new reality of work, we should certainly stop the contradistinction between the self-employed and the people working under stable contracts and build a suitable framework that would cover all working people.

The column was published in The European Files in January 2017


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