The Shift to Non-Standard Employment part 1

Contents

2. Labour Market Trends

Innovations in Technology and Globalization

The Shift to Non-Standard Employment:

Non-standard Employment and

SMEs

The First Great Job Shift

Implications of the Shift to Non-

standard Employment

The Impact of Demographic Change

Summary

Where to Find More

The Current State of the Labour Market

More jobs are part-time.
More women are balancing paid work with work in the home.
More people are self-employed.
More workplaces are getting by with lower staffing levels.
Both paid and unpaid overtime work are on the increase.

Charles Handy's Shamrock Organization

The British management scholar, Charles Handy, predicts that all competitive firms and institutions of the future will have three types of workers. Handy uses the term shamrock organization to describe the organizational structure he envisions, with each type of worker representing one of the leaves in a shamrock.

The first leaf of the shamrock is made up of the professional core. It consists of professionals, technicians and managers who possess the skills that represent the organization's core competence. Their pay is tied to organizational performance, and their relations will be more like those among the partners in a professional firm than those among superiors and subordinates in today's large corporation.
The next leaf is made up of self-employed professionals or technicians or smaller specialized organizations who are hired on contract, on a project-by-project basis. They are paid in fees for results rather than in salary for time. They frequently telecommute. No benefits are paid by the core organization, and the worker carries the risk of insecurity.
The third leaf comprises the contingent work force, where there is no career track and often routine jobs. These are usually part-time workers who will experience short periods of employment and long periods of unemployment. They are paid by the hour or day or week for the time they work (Handy, 1992, p. 153).

The Shift to Non-Standard Employment

It is a revolution, a revolution for sure. It is not just a matter of a few bloated corporations trimming jobs. It is a new way of doing business and organizing work that spells the end of secure, long-term employment for practically everybody. An unwritten covenant between employers and employees is being annulled (Fritz Williams, quoted in Curriculum: New Work for a New Generation, Detroit Educational Television Foundation, p. 16).

In their report to the federal government, the Advisory Group on Working Time and the Distribution of Work comments:

The paradox of our times is that many Canadians today work long hours while many others have no work at all. Increasingly, people who want full-time, permanent employment have to settle for part-time, temporary or seasonal work. This form of underemployment is as troubling as unemployment, since more and more people are relying on these non-standard or contingent jobs (1994, p. 15).

Jobs can be defined as standard and non-standard. Standard jobs are those that are full-time, full-year with a single employer. They usually offer benefits and some career prospects. The usual employer is a large firm or government. Just over half of Canadian workers still hold standard jobs.

Part-time, contract and temporary-help agency work are examples of non-standard employment. Non-standard employment also includes own-account self-employment, which is the selling of goods or services by people who do not employ workers themselves.

While more full-time jobs were created in 1994 than part-time ones, almost half (46 percent) of the 3.5 million jobs created in Canada between 1975 and 1993 came from part-time jobs. By 1993, nearly one quarter of all jobs in Canada provided less than 30 hours of work per week compared to 14 percent in 1975.

Another indicator of the trend to non-standard employment is the higher growth rate of self-employment. Over the last decade, self-employment has grown twice as fast as regular employment, as many companies and governments have contracted out services that used to be provided in-house by workers in standard jobs. Self-employment seems to have grown particularly fast among older workers: approximately four in 10 are 45 years or older. However, the Federal Business Development Bank reports that one quarter of Canada's one million small businesses are owned and operated by people aged 18 to 29. It seems that energy and enthusiasm edge out experience as a prerequisite for successful entrepreneurship.

Just-in-Time Work Force

Employers are now reluctant to commit themselves to full-time, full-year "permanent" employees and prefer to get workers - from clerical staff to sophisticated consultants - on a project-by-project basis.

Flexibility is a key issue. Without the long-term commitment and salary burden of an extensive full-time work force, companies are more agile because part-time workers' hours of work can be easily changed and "temp" work just as long as required.

Just-in-time production has become just-in-time work forces. For example, if a company starts making a new product, all aspects of the launch - such as sales, marketing and telemarketing - can be handled by a temporary work force. If a cross-country road show is planned, a temporary staff can be assembled in each city.

The president of the Federation of Temporary Help Services in Canada says, We don't even call it temporary any more - it's a flexible work force

(Bacigalupo, 1994).

Paid jobs (that is, where an employee receives a wage or salary from an employer) nevertheless, continue to predominate. Excluding farmers and fishers, fewer than one tenth of working Canadians are self-employed. Among the sectors with significant levels of self-employment are business services and construction (both with one in five workers self-employed) followed by transportation, trade, and insurance and real estate agencies (all with one in 10 workers self-employed).

While some of the increase in non-standard employment (see Figure 3) is cyclical - that is, related to recessions and/or weak economic growth - deeper structural forces are also causing this permanent shift in how work is being done. The growth in non-standard employment has resulted from several interrelated structural factors.

The shift from a goods-producing to a service economy: Retail, tourism, entertainment and personal service industries have grown in terms of their share of the total labour force, and these sectors have the highest concentrations of part-time work.
New forms of business organization: The growth in small-size businesses and contracting out by firms means more short-term employment.
Increased competition in both domestic and foreign markets: Increased competition puts pressure on employers to lower their costs, including wage costs. Workers with non-standard jobs do not usually participate in pension and benefit plans, which can add 25 to 30 percent to the bill for wages.

It should be noted that not all non-standard jobs are bad jobs. Some part-time jobs provide good pay and benefits, as well as stable employment and prospects for advancement. They are preferred by many working mothers, students and highly paid consultants. However, many non-standard jobs do not provide individuals with predictable hours or a predictable income.

In his book Job Shift, William Bridges (1994) coined the phrase "dejobbing" to describe this trend to non-standard employment. He says that workers are going to be more like independent business people (or one-person businesses) than conventional employees. They are likely to work for more than one client at a time and to move back and forth across organizational boundaries - being employed full-time for a period of time, then hired to do contract work, then hired to consult, and then brought back in-house (perhaps part-time this time) on a long-term assignment. He concludes that, although there will always be enormous amounts of work to do in our economy, the work will not be contained in that old familiar employment form of standard full-time, full-year jobs.

Figure 3: Non-Standard Employment as a Proportion of Total Employment, 1991, Canada.

Work-Time Practices

Increasingly, employees want flexible hours - working from eight to four, for example, instead of from nine to five. Some prefer compressed working hours, by which it is possible, for instance, to take off every second Friday by working longer hours over the preceding nine days. And some, though by no means all, working people would like to consider such options as the four-day week, or extended vacations, or temporary part-time status, even if it means some reduction of income. These changing attitudes are likely to have a growing impact on work-time practices.

Recently, there has been considerable public discussion in Canada and elsewhere about the desirability of the four-day week. It has been seen as a major social transition - comparable to the historical shift to the eight-hour day and the five-day week - that could both create jobs for the unemployed and improve the quality of life for those currently employed. If the four-day week were to occur in Canada, it would most likely be the result of successful examples and changes made through collective bargaining, not because of legislation.

The best known Canadian example of the four-day week, at Bell Canada, was a negotiated agreement to reduce hours as an alternative to layoffs. The one-year agreement, signed in December 1993 between Bell and its major union, the Communications Energy and Paperworkers Union (CEP), followed rejection of a joint application to the Unemployment Insurance Commission for support for a work-sharing program. The union and the company subsequently agreed that, in place of the standard eight-hour day, five-day week, hours would be reduced, which meant some reductions in pay in place of layoffs. The agreement also restricted use of outside contractors.

While the initial Bell-CEP agreement called for mandatory unpaid days off (the most unpopular part, among Bell's workers), a recovery in business has meant that it now involves a much smaller reduction in hours and pay. Bell technical and other staff may now work four nine-hour days per week, which results in the loss of just two hours of pay per week. One of the most significant lessons from the experience is that negotiated work-sharing agreements can be an alternative to layoffs. Most important, perhaps, is the fact that some workers will be willing to trade at least some pay for a reduced work week. Very few of those on the four-day week have switched back to five days in order to obtain two hours more paid work per week, although this option is now available to them.

SOURCE: Report on Working Time and the Distribution of Work. (Advisory Group on Working Time and the Distribution of Work, Human Resources Development Canada, 1994.)

Non-Standard Employment and SMEs

As outlined in the section on globalization and technology, small- and medium-sized companies (SMEs) are the creators of employment in Canada. This is an important point because rapidly growing companies have a great deal of work that needs to be done, but they offer fewer and fewer traditional jobs to get that work done.

Globally competitive organizations use a change-driven style of operation that requires flexibility and speedy responses to keep up with changes in the marketplace. Because conventional jobs inhibit flexibility and speedy response to the marketplace, many organizations are turning over even their most important tasks to temporary and contract workers.

It is important to emphasize that the members of what is coming to be called the contingent or just-in-time work force are not just clerical or assembly-line workers. Temporary hires do sophisticated electrical engineering, and they work as senior benefits analysts, lawyers and accountants. Even in the traditional professions of health and education, and in government service, where job security has been paramount, there have been reduced work weeks and layoffs.

Even Standard Jobs are Changing

Not only are there fewer standard jobs, but those that remain are changing. Downsized companies must change and add new responsibilities to the jobs that remain. That is, people working within organizations in standard jobs will do so under conditions too fluid to be called jobs in the old sense. For example, William Bridges (1994) describes what it's like to work at Microsoft, the Seattle software giant.

There are no regular hours. Buildings are open to workers 24 hours a day.
People work anytime and all the time, with no one keeping track of their hours, but with everyone watching their output.
Workers are accountable not to conventional managers but to the project teams of which they are a part.
Within each team, individuals are always given a little more than they can accomplish on their own, so there is constant collaboration among team members.
At regular team meetings, workers stand before the team to explain what they have contributed to the project lately, so it doesn't take long to straighten out a team member who isn't performing.
Because workers are not protected by the boundaries of a job, normal and satisfactory come to be synonyms for substandard; Microsoft employees are expected to work beyond the limits that any job could set for them.
Many projects include round-the-clock periods of work, with many workers overextending themselves and experiencing anger and burn out.

Burnout is not an unusual outcome at the end of a major new software development project. Bridges notes that John Sculley, ex-CEO of Apple Computers once estimated that a third of the people on a new-product development team quit the company for six months or more after the product had been launched. Most of them eventually returned to the company, however.

Bridges comments that the pattern of alternate bouts of intense labour and of idleness is similar to work patterns among 19th century English artisans who had not yet given in to the demands of an industrial job. In fact, he goes to great lengths to remind us that "the job" is a social artifact, not a timeless fact of human existence.

March 3, 1998