What traditional companies can learn from the gig economy
Not one study suggests that working in an office eight hours a day, five days a week maximizes employee productivity, satisfaction, or performance. In fact, any data that exists on working life in an office reveals that most employees aren’t engaged, waste a lot of time in the office not working, and that underperformance is a persistent problem.
The most impactful lesson that companies can learn from the Gig Economy is to judge workers based on their work -- their results, and their output -- not on when and where they do that work.
The Gig Economy transforms the way we work by disconnecting work from an office. Independent consultants, contractors, and freelancers are judged by their results and output – no matter how, where, or when they are produced - not on the time they spend in their office chair, or whether they work from 9 to 5 every day. Study after study after study of remote workers have consistently demonstrated that they are happier and more productive than their office-bound colleagues. Recent surveys of 8,000 workers by McKinsey’s Global Institute and nearly 900 independent workers by Future Workplace and Field Nation find that those workers, freed from the constraints of office life, are more satisfied and more productive. Yet somehow, despite compelling empirical evidence to the contrary, our office-based, five-day-workweek, time-in-the-cube approach to work still persists.
Tracking employee time and location made sense when many jobs were time and place dependent. Factory workers, manual labourers, or workers in retail stores, restaurants, or hospitals have to be at their place of work at specific times to be productive. If your job is to be salesperson at a retail store, you have to be there to sell to customers when the store is open.
There are still jobs in our economy that require a specific time and place to get done, but few of them are corporate jobs. Despite that, most corporations misallocate their resources to track and manage employee time and location, while failing to measure what actually matters. Ideas and results are the true value that workers bring to their employers, not time and presence.
When asked, executive and human resources professionals defend the need for an office-based culture by relying on narratives about team-building, culture, and collaboration. Yet, their arguments are anecdotal, and lack any data, even from their own companies. The evidence that does exist suggests that trust and effective teams are built primarily through interpersonal behaviour and communication, not constant proximity from working in the same office space.
Corporate culture is the primary obstacle to managing by output, results, and value delivered. Most managers enjoy working at a company in which employees are managed by time and place. After all, it’s pretty easy to see who is at their desk every day. It’s much harder to develop, measure and track - for each employee - the specific value, deliverables, and output that they should produce. Managers will have to work a lot harder under a system that focuses on tracking results and deliverables.
The rewards are great for companies that can overcome corporate resistance to remote work: more productive, efficient, and satisfied workers, better management, a healthier corporate culture based more explicitly on merit, access to much wider geographic pool of talent, and lower real estate and facilities costs as workers move away from an office-based work schedule.
Companies can start reaping these rewards by taking three immediate steps:
- Encouraging remote work
- Managing and evaluating employees by the results they deliver, and
- Offering co-working spaces instead of dedicated offices for employees who prefer the social structure of an office environment, or lack the quiet environment and space for a dedicated home office.
For employees, remote work eliminates the wasted time of commuting, the pressure of face time, the stress of constant exposure to office politics, and the shredding of the workday by a thousand paper cuts of interruptions and meetings.
Labour is the most expensive and valuable resource at most firms. Managing that resource by time and place is an unproven, inefficient, and costly approach that fails to measure what really matters: results. The biggest lesson that companies can learn from the Gig Economy is to manage and measure employees based on what they produce and deliver and solve, not the hours they spend in the office.
About the author
Diane Mulcahy is the author of The Gig Economy: The Complete Guide to Getting Better Work, Taking More Time Off, and Financing the Life you Want. She is an Adjunct Lecturer at Babson College, where she created and teaches an MBA course on the Gig Economy, and a Senior Fellow at the Ewing Marion Kauffman Foundation. Learn more about Diane’s work at www.dianemulcahy.com, and follow her on twitter @dianemulcahy.
- Gig economy
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