Easy come, easy go

17 October 2008

Who are more important to you – the contractors you hire for temporary projects or the employees you pay through PAYE? How differently do you treat them? And do you expect your employees to be more loyal than temporary workers?

If your attitudes to hiring people are based on traditional notions of building career paths and rewarding long-term loyalty, you may want to think again. According to panellists debating the ‘Future World of Work’ at the recent Oracle OpenWorld event in San Francisco, the rules are changing fast – and entrepreneurs need to take account of everything from globalisation, language literacy and the changing nature of corporate career ladders when they try to hire talent.

“In five years time, I believe we will no longer have employees, we will have contractors,” said Lowell Williams, Executive Director of Global HR Services at advisory firm EquaTerra. “They will come to a brand – in an industry they want to work for, because it enhances their personal brand. If this is close to being right, the systems of rewards and benefits we have for people today are wrong.” Williams pointed out that one of his colleagues has worked for EquaTerra on three separate occasions. While entrepreneurs often see employees quitting as a sign of disloyalty, in most cases EquaTerra is quite happy to invite leavers back later on in their career, believing it’s a good way of acquiring proven talent.

But if you accept that your employees will come and go more easily, you’ll also need to change the way you reward them. EquaTerra now focuses on providing short-term rather than long-term rewards – and as Williams points out, people also want more portable benefits. It’s not just consulting firms that are starting to take this approach, he argues – even companies in traditional industries are following suit, particularly for high-potential future leaders.

These changing dynamics also impact the kinds of career paths you build for your most talented people. As Molly Anderson, executive director at Deloitte Services, pointed out, traditional working structures haven’t evolved to match changing family structures. “Some of our organisational models – how we think about how we develop talent and how we think about developing careers – are outdated,” she said. Most development structures and associated organisational processes still tend to be based on corporate ladders. Anderson suggested, however, that the corporate lattice is a more appropriate analogy, a structure that allows movement in many directions and is highly scalable.

Deloitte has also invented what it calls Mass Career Customization, an approach that it’s currently rolling out across its workforce. As Anderson pointed out, employees are used to customising the music they listen to and the way they watch television through digital video recorders, and similar principles now apply to the workplace. Every workforce is made up of multiple different characters with different priorities, and Deloitte’s aim is to build a framework that caters for some degree of individuality. That doesn’t mean the options are infinite, of course. In fact, it’s similar to the retail world, where mass product customisation does exist, but only within a defined set of choices.

What this means in practice is that during performance evaluations, employees are given the flexibility to commit to greater or lesser stretch goals, with their compensation adjusted accordingly. That may seem somewhat alien to entrepreneurs who expect their employees to devote as much energy to the cause as they do, but it reflects the reality of working life. The amount of time and energy people commit to their job is always going to be impacted by personal circumstances: the issue is whether you fight that or work with it.

Williams also argued that as globalisation expands, the virtual world will become more of a reality, bringing its own practical problems. Communications need to be very clear, and employees may need to be taught basic writing skills. He pointed out that there’s also a significant difference between language and cultural literacy. Someone may have excellent Russian language skills, for example – but if they haven’t worked in Russia, it’s unlikely that they’ll be able to provide an adequate level of service to people in that country.

Finally, Mark Schumann, managing principal at Towers Perrin, suggested that the work environment may ultimately draw from Craigslist, the free classified listings and forum website used in London and 50 countries around the world. If you can already find your house, your couch and a date on Craigslist, all free of charge, what does that mean for the workplace of the future? Will individuals start to find work by simply floating their skills and experience on the web?

By Keith Rodgers, Webster Buchanan Research