The Changing Future of Employment

Monday 4th May, 2015

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The Future of Work, and the “End of the Employee” …….why everyone must become an Entrepreneur

Have you ever considered what will jobs be like in ten or twenty years from now?

What skills will be in demand by then?

What new technologies will make your work-life easier?

With the continued innovations in science and technology, will there still be enough full-time jobs available?

There are a whole lot more questions regarding the future of work, business, and employment, but experience tells us that traditional predictions about what the world will look like years from now tend to be over-optimistic.  Some people believe that, in the future, most people will work virtually while others believe that there will be no more managers or workers.  So, what do we believe the future of work really look like?

What if, through research, an assessment of the labour market of the future could serve as a basis for debate around the challenges and opportunities individuals and businesses are likely to face?

Employment Context

Image courtesy of jesadaphorn at

Image courtesy of jesadaphorn at

Working twenty years ago was a very different prospect, and the recent explosion of digital-savvy-employees has significantly changed how people work today, increasing communications, increasing productivity and increasing automation.  Most businesses and companies are using software and applications that enable them to work anywhere!  According to the research done by Workshare and the Association for Information (AIM), 81% or more than four out of five workers, access work documents through a mobile interface – be it a phone, tablet, or laptop.  As a result, companies and businesses are now pressured to use systems and applications that are not only easy-to-use, but are also safe and secure to use for corporate documents, whilst on the move.  This trend of mobile working has become a common requirement for knowledge to those who are looking for a job.  Being computer / software literate has become a big plus for any company hiring; the more you know, the better chance you get.  Now-a-days, competition is higher as more and more people are knowledgeable about these new applications and software; therefore, the challenge of getting a job is higher.

 Contracting – The Tip of the Iceberg

Technology has transformed our lives in ways we couldn’t have dreamed of before.  As time goes by, these collaboration and social communication tools will surely get more sophisticated; new tools will be developed and who knows what  effect this will have on companies and businesses.  It is true that while technology develops, our jobs get easier; but is this something that employees really want? You may say yes, but have you thought about the future of it?  Think of it this way, for many administrative tasks, as technology develops, and automation increases, the task of many ordinary employee lessens to the point that one doesn’t need to do as much.  And of course, companies and businesses don’t need to hire as many or as highly skilled staff, or can hire lower skilled workers.   As other companies follow a similar path, the companies that don’t keep up fall by the wayside, losing competitive market share. So consequently, this trend is set to continue, driven by market forces.

Furthermore, companies are increasingly demanding specialised skill sets for either short periods or for less than full-time utilisation.  Typically the company needs someone quickly, and temporarily without the hiring duration and overheads of a full-time employee.  This is why companies are increasingly hiring contract employees and freelancers..

Yes, big companies can “afford” to hire their employees immediately, but that’s not why they prefer contractors; it actually has to do with the cost to employ someone full-time.  Full-time employees are very expensive to a company. Let’s say a company hires you for an annual salary of $50,000 in a permanent position, it actually costs them almost 50% more to employ you once benefits, tax and overheads are included.  There may be contractors or freelancers who are higher priced on an hourly basis, but still the company will be spending less if they hire for a finite period.

Furthermore, contract staff are much more easily set off against capital budgets, as they are fixed-term, and often recruited for very specific pieces of work. Financial rules, mean that the efforts to deliver a project can be set against the project’s capital budget, and the asset value of the project can be depreciated accordingly, typically over several years.

This way organisations can reduce their fixed operational overheads, which typically employees fall into, and improve their EBITDA (Earnings Before Interest, Tax, Depreciation & Amortisation) statements.  This set-up doesn’t only benefit the companies because being a contract worker or an independent contractor has its benefits too.

Working in this manner potentially gives you pay and tax benefits, as well as more freedom to do the things you want to do.  Come to think of it, if you don’t work full-time, let’s say you only work four to six hours a day (some highly skilled contractors or consultants may not want to work full-time jobs and are only available on a consulting basis), you still have a lot of time to set our own schedule and enjoy a wide variety of experiences.

While some choose to be an independent contractor, others become one by fate.  Being an employee isn’t something permanent as anything can happen.  If you suddenly get laid off, you’ll need to do something in order to keep an income stream coming in. The sooner you can do that, the less financial trouble you’ll be in. While you can look and look for jobs and hope you get hired, you could decide to start your own business and work independently.

Right now contract work, freelancing or entrepreneurship isn’t for everyone. However, increasingly we all must start to adapt as the job market is changing.

Already companies are increasing the percentage of contract staff on the promise of 10-30% savings versus full-time employees.

The Evolving Market for Resource

There is already significant pressure on the actual employee job market. Competition for good jobs is high, and this will only continue, with the number of employee jobs growing at a much slower rate than the overall population and economy.

There are other areas where the change to the way companies hire, is affecting the job market as well.



One of the most obvious is outsourcing. More and more companies are focussing on their core businesses, and pushing out non-core activities to other companies, whether on an operational basis, or on a project basis. Whilst this reduces the overall requirement for internal staff, it does have the benefit of increasing the opportunities for small startups and businesses to market solutions at new niches as the business world evolves. Companies that aren’t doing this, and are clinging onto doing everything internally themselves, will put themselves at a disadvantage in the long term as they end up being too diverse and unable to maximise value for their market and customers.

Already some innovative corporate organisations are recognising the evolving jobs market, and are establishing internal entrepreneurial principles where up to 20% of staff time is given freely to do what they want with it. They understand that by supporting the natural entrepreneurship of current staff, they may well spawn new ideas internally, and even if one of these ends up spinning off a successful start-up, the likely benefit will be an enhancement to their own business, rather than a threat either from the new business or the loss of the employee. It’s in fact likely that the former employee would revere their former employer for allowing them to flower.

Additionally this intra-preneurship is designed to save the employer money by coming up with new ideas for implementing greater efficiency and new lower overhead business models, furthermore putting pressure on available jobs.

Another way in which companies are reducing their need to hire employees, is through acquisition of other companies and start-ups that already have the products and skill sets that they want. In fact, in most cases following acquisition, there are further employees laid off due to overlaps, putting yet more pressure on available jobs in future.

Also, many employees are becoming increasingly entrepreneurial on the side from their main job, such that they are sometimes offering their services internally to their employees, and are managing to cover off elements of roles new hires might have taken.

Finally, the last element of pressure on the job market is the rise of the multi-skilled employee. Due to increasing automation, the more motivated employees are evolving and moving up the employee value-chain within their company. They are becoming skilled across multiple areas as generalists, whereas previously they would have been highly specialised. This is happening without a significant reduction in individual capability, and in any case, they benefit their employer further by bringing experience to new areas from other disciplines.

All these are just adding more and more pressure to available vacancies and hires, reducing the quantity of new hires, and increasing the demand for quality, in that if they are unable to match the versatility requirements, they are likely to be overlooked, or contractors hired instead.

We predict with confidence that market forces will continue to apply pressure in all of these areas outlined above. Why? Because the natural behaviour of companies is to drive increased profits, increase efficiency and drive down operational costs. Whether this is done by doing more with the same, or doing the same with less, it doesn’t matter. The impact in the long-run is the same. Increasing pressure on employees.


Image courtesy of iosphere at

Image courtesy of iosphere at

Ten years ago, we didn’t have social media. Ten years before that, we didn’t have the Web. So who knows what the job market will look like in a decade from now?

All we can predict is the trend that is currently occurring, and as we’ve described above, the pressure on employees and the employment market is steadily increasing.

Yet all is not doom and gloom. Where there is change there is opportunity.

Though things may be uncertain for the future of standard jobs, it does appear that there will be increased demand for skills that can be provided by the more entrepreneurial minded.  Ten or twenty years from now, we expect that the evolution of technology  will further permeate wide segments of our work and daily lives.  This perpetual wave of innovation threatens to ravage blue-collar employment and more than likely will even upset white-collar working practices.  Certain highly-skilled workers can succeed but far more may be displaced into lower paying service industry jobs at best, or permanent unemployment at worst.  No one is going to pay you just to show up; you must be competitive enough to get through employment.  Our educational system is not adequately preparing us for work of the future, and our political and economic institutions are poorly equipped to handle these hard choices.

Our strong recommendation, given the indications of future trends, is that all employees must start thinking right now, about what they need to do to become more entrepreneurial. The job market no longer offers secure, jobs-for-life, and the sooner you are able to adapt your skills and mindset to deal with the forthcoming changes, the greater the rewards. So, take our advice, get ready for the future, and start the path to become your own boss. Perhaps start by reading our other blog articles, and in particular, this article on the Values of Successful Entrepreneurs.

So, come with us and get some Momentum, now!


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