Edition 83 – The Casualisation of the Workforce

Last week, we talked about disruption and how it is impacting the business world.

What we didn’t talk about was the biggest impact of disruption is on its way and, for the most part, most Australians are unprepared for it.

In the next ten years, I firmly believe the Australian workforce will become increasingly casualised and more independent. Large companies have been laying off workers for years as they restructure. Jobs have been outsourced to South East Asia and India.

Small and medium businesses are the next ones to venture down this road.

The recent decision by Australia’s Fair Work Commission that any casual employee is to be offered permanent employment once their tenure is beyond twelve months was seen as a win by the Trade Union movement. Except, as always, Trade Unions fail to see the longer term impact that means a win is ultimately a loss for its supporter base.

The argument pushed by the Federal Opposition Leader about Weekend Penalty Rates for employees is all about, allegedly, preserving entitlements – but not understanding the business world has changed in the past 70 years, since penalty rates were first introduced.

The impact of the Unfair Dismissal laws and how it hinders small and medium business from laying off staff who are poor performers only forces the owners of those businesses to consider employing less, limiting growth or using non-employee labour to solve their personnel issues.

So, here is my prediction as to what will happen to the Australian workforce over the next ten years:

1. There will be more casual employment, not less.
2. Long term employment tenure will be seen as a disadvantage to business growth.
3. The increased use of contractors will prevail.
4. Online portals where small, home based entrepreneurs tender for projects, from formatting documents to providing delivery services, will become prevalent.
5. Employees will choose to be more transient as the Baby Boomers exit the Workforce and younger people determine that life is not all about working, starting a family and creating a nest egg.
6. Technology will continue to take menial tasks away from lower paid employees.
7. Our economy will increasingly become service oriented and whether it is coffee shops, restaurants or bars, we will spend more time there and less time eating at home. That means the hours of work for the service based employee cannot possibly be an 8 hour day.
8. The price of housing, particularly in Sydney and Melbourne, will see more multi-generational households where the second generation works only to fund their lifestyle, not the purchase of real estate.
9. There will be an increasing use of motivational incentives for employees to think in their work – not merely turn up each day. Some of those incentives will be financial, most of them won’t.
10. Businesses that want to retain long term staff will need to get creative around extended sabbaticals and non-work based training for those workers so they retain them in their workforces.
11. Competitors in the marketplace will understand that by working together on certain projects, they may be able to deliver faster, more profitably, with less permanent employees and overheads.

So whilst the Trade Union movement and our Federal Government continue to labour over the protection of worker’s rights, what they fail to see is that business is becoming more creative about being less exposed to ideology, and more adaptable to change.

This Week’s Tip

If you were to lose 20% of your workforce overnight, could your business survive?