Fractional Work. The next small thing?

May 2014 - 7 years after the date of this post.  The Rise of the Gig Economy.

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Models of Fractional Work continue to emerge.

The video blogging web site Revver opens with the statement "What if creativity could pay the rent?". And JyvePro announces "Live access to people and what they know".  Ether launched a while back with the strap line "Earn money, selling what you say".  More recently, BitWine in similar vein, proposes that people can "Get straightforward Advice, Instructional Guidance or a Second Opinion, and talk to real people in real time". 

Emerging behind the scenes is ki work (my favourite, and in which I have a personal interest) which if it receives funding, will adopt a profoundly more subtle approach to fractional work and should eclipse its nearest competitors, Elance, Guru, PajamaNation, Odesk and others.  As always we lag behind in the UK, although ExpertSources is getting there.  If its management team can be persuaded to embrace Web 2.0 technology it could quite easily become a de facto cybermediary for sourcing expert opinion in the UK by connecting media researchers to experts. At this time, none of these appear to have embraced or indeed undertstood the importance of reputation management and the dimension of trust it adds to user confidence.  Several new entrants can provide the 'plug 'n' play' services they need, for example RapLeaf, Venyo (just launched) and iKarma.

Ki Work's Michael Wolff has collected just about every statistic on the future of work one could ever need, has also been crunching numbers and comparing the performance of some of these players.

Guru

Projects posted by employers: 70,200
Employers received an average of 15 quotes per project they posted
80% of invoices created by Guru or Guru VENDOR members, i.e. members that pay some level of subscription and therefore, more likely to get work if a paying subscriber. 

Elance

800,000+ registered users.
100,000+ projects annually.

"So if we take Guru, Elance and others,  the number of projects posted per year ranges from 200,000 - 400,000, mainly from US customers."  This still only represents a small fraction of what's possible.

I'm convinced as stated in a previous post - Fractional Work Debuts, one of these intermediaries will become the new Manpower or Adecco except using a model that anticipates the maxim, "the unit of work is no longer a whole job". 

In the UK Richard Tyrie, founder of JobsGoPublic, has developed a Ruby on Rails based platform that is perhaps the most functionally rich web application for matching supply with sources of demand, I've seen to date. Richard worked with the highly respected  economic forecasting group, Oxford Economics.  They calculated that if just 1% of the 2.6 million people in the UK on incapacity benefit (points to a PDF file) carried out work on this platform, many millions of pounds would be returned to the Treasury in taxes.

Equally impressive is TorchBox's Slivers of Time (funded no less than by Her Majesty's Government, The Office of The Deputy Prime Minister) that supports their proposition for employers;

"Employers input their needs, for example "3 people for 2 hours at lunchtime today", they see everyone who wants to do that specific booking ranked by reliability (reputation) and hourly rate. They can buy instantly."

With continuing support from the government and professional grade funding, there's no reason why this could not become the eBay for work.

In fact a significant percentage of the 80,000-130,000 government employees (depending on who you ask) at the Department of Work and Pensions who provide a service back to incapacity benefits claimants could work this way, that is, on demand.  Many functions that provide 'soft services' within the NHS (for example, psychiatry, radiography) consist of people who work this way anyway.  So why not contract on the basis of demand?  Why wouldn't you want to reduce the massive salary bill created by 1.3 million NHS employees?

Research from the UK Work Foundation found that the main cause of the 2.6 million people on long term sickness and incapacity benefit is workplace stress, costing the tax payer billions of pounds every year.  Our current command and control organisational model is literally killing people.  Recent research by McKinsey & Company indicates that “half or more of a company’s spending on labour may be devoted to basic interaction activities, many of them internal to the organisation".  Again corroborated by other UK Work Foundation research finding that non-productive interactions in many organisations exceed 60%.

Most Western economies face a wide range of issues related to ageing populations and the retirement costs of baby boombers.   Many blue chip companies cannot replace the talent that will exit their companies in the next 5-10 years, and have not considered the possibility of retaining them on demand, deploying them in a  fractional way that allows the 'ex-employee' to choose their unique work/retirement balance.  How much more pain does everyone have to be in before these new organisational approaches are adopted by organisations of every kind?  Why aren't they doing it now?  One of the perceived 'challenges' is the transparency and openness required to make this mode of work feasible.  Inside the corporation, it would be possible for everyone to see and know what everyone else is working on (or not, as the case may be).  This is difficult to achieve operationally because of rigid command structures and culturally, because the nature of the employer-employee contract does not reward or incentivise in anyway, behaviours that allow people to openly share. 

Perhaps an employment law expert can re-work the ethos of the Open Source General Public Licence and Creative Commons into a new type of employment contract?  In any case, with India, China, Russia and Eastern Europe's low wage economies and highly educated populations providing services of every kind and on every scale (India's Infosys received 1.4 million job applications for employment last year alone), the only way to compete will be to adopt alternative organisational models.  Interestingly, Small & Medium sized Enterprises (SMEs) and micro-businesses which are collectively the biggest employers in Western economies are increasingly turning to these models of work to take cost out of their businesses, but also to work more productively.  When the very clear cut case histories start to roll in, companies will find it hard to ignore these new ways of working.

There must now surely be a case for corporations and  government institutions to completely re-think the way they source, manage and contract with their 'human resources'.  Everyone needs to realise that fractional work is not only economically viable for all parties, and that traditional models of employment are not only unproductive, but inhumane and in some cases, barbaric. Update 13 April 2008. See Stow Boyd's new venture, Workstreamr - work made social.

Comments

[Nasir]

Leon, you'd likely have noticed the same critical issues happening at traditional freelance marketplaces just like jobs markeplaces -- the available microjobs and jobs respectively, are only enough to cater about 10% of the seekers/service providers, meaning that more than 90% of the seekers will never get any assignment/job at all! (considering that several providers will get more than one job).

I have some ideas on how we might be able solve this critical problem, but I'd like to hear first on what you think we (people, marketplace operators, corporations/govt) should do...

Do you think that it'll be sufficient if the govt and corporate help by outsourcing the bulk of their work to these networked workers?

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