Where I mix career information and career decision making in a test tube and see what happens

Thursday, February 5, 2015

The Changing Expectations of Employers and Employees

As teenagers turn into adults, they and their parents need to renegotiate the terms of their relationship. The parents have to let go of the control that they had over their children’s’ lives, and the new adults have to learn how to fend for themselves without the parental safety net. The transition usually takes several years, during which there are always awkward, even painful moments when the two parties’ expectations don’t totally match.

Something similar has happened as the employer-employee relationship has changed in recent decades. Traditionally, employers have had certain expectations for their employees: high-quality work output, low absenteeism, a good attitude, and reasonable cost. Employees have had their own expectations: a reasonably good work environment, respect, steady employment, and at least a living wages. Starting in the late 1970s, these expectations began to weaken or even fall away, but during this period of transition, the two parties have often found their expectations were not in synch.

The first big dislocation was the wave of downsizing that began in the 1970s and 1980s. Companies decided that their need to contain costs was more important than meeting their employees’ expectation of steady work. Loyalty became a thing of the past. In making this move, employees banked on the notion that the quality of work output would not diminish with employees’ loss of security. My generation, the Baby Boomers, never completely adjusted to the new reality. Books like What Color is Your Parachute? taught many of us how to deal with this situation, but we did not and still largely do not accept that this is the way jobs ought to be. Our expectations are stuck in the model of the 1950s and 1960s economy.

However, it’s also true that many employers did not fully appreciate how they had changed the nature of the relationship. I experienced this when I returned as a consultant to work for a company where I had been downsized after many years as a salaried employee. The company presented me with a contract that included a two-year noncompetition clause. I was flabbergasted. The company was saying, in effect, that they had no loyalty to me but that I had to be 100 percent loyal to them. I refused to sign the contract unless that clause was removed. They needed my skills badly enough that they conceded on this point.

In the 1990s, automation killed off some jobs but added so much productivity to other jobs that the economy as a whole did very well, so the employer-employee relationship did not change greatly. But as the century turned, computers got smarter and began to displace more workers and, worse yet, globalization resulted in the offshoring of hundreds of thousands of manufacturing jobs. Employers were happy with the reduced cost of foreign workers and the quality of their work, while the absenteeism and attitude of these foreign workers were somebody else’s problem. To find steady work, many former employees of manufacturing jobs now had to shift to service jobs and lower their expectations for the work environment, for respect, and even for living wages.

The latest dislocation is the arrival of what is often called on-demand work or the “Uberization” of the workforce. Technology now makes it possible for employers to take on workers for assignments that last only a few hours or less. The work may be driving passengers for Uber or Lyft, performing cleaning or other home services for Handy (formerly Handybook), or doing almost any kind of low- to moderate-skill task for TaskRabbit or Mechanical Turk. By using these temporary workers, who are classified as independent contractors rather than employees, employers can still meet their expectations for low cost, and customer feedback about individual workers ensures that the quality of work output and perhaps workers’ displayed attitude will not suffer. Absenteeism is not a problem as long as there is a sufficient pool of interchangeable workers. Some workers are able to earn better than a living wage in these arrangements, but many do not, and few can count on steady employment or respect in this relationship.

It is possible that many workers have become so beaten down, especially following the Great Recession, that they have lowered their expectations to the point where they can accept this new relationship. But several lawsuits are revealing small but significant instances in which employers’ expectations are out of synch with the realities of using on-demand workers. Last year, FedEx drivers won an appeals court ruling that they are not independent contractors, because the employer requires them to wear company uniforms, drive company vehicles, and maintain company standards for grooming. A current lawsuit against Handy makes a similar argument, stating that the employer does not treat its workers as contractors because it requires them to adhere to strict guidelines on matters such as what clothes to wear, when to ring customers’ doorbells, when to listen to music, and how to use the bathroom. Still another lawsuit, this one also against Handy, happened when the company stopped using a contractor because she subcontracted the work to her sister.

In the traditional employer-employee relationship, the worker’s expectations of good work conditions and a living wage were guaranteed by laws that governed workplace safety, minimum wage, overtime pay, Social Security payments, unemployment insurance, and the right to unionization. These laws mostly do not apply to on-demand work situations. On-demand workers may also face new kinds of liabilities. For example, when I was a full-time employee and drove from my office to a meeting at another site, my employer provided insurance coverage for the trip. Uber drivers, on the other hand, are insured by Uber only for the time when they have a passenger in their car; they are not covered when they drive to, from, or between assignments.

Perhaps what is needed is a new category of worker, “dependent contractor,” who would have some protections that independent contractors lack. A court in Canada ruled that this kind of worker has the right to reasonable notice of termination. Germany recognizes several rights for these workers.

Can the United States protect on-demand workers? I am pessimistic. The major constituencies that influence workplace policy are the corporations and the unions. Most corporations are not interested in making these concessions to workers, and few on-demand workers are union members.

1 comment:

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