Companies exist to make money for their owners. To do that, they must provide goods and services that people want, at competitive prices. And to be competitive, they must manage costs and time. The largest fixed cost in any company is often headcount.
Fixed costs weigh on the financials whether sales rise or fall. While a bustling office full of busy people making sales and pumping out services is a joy to experience, there’s also the other kind of office: the place where legions sit somberly at their desks, some making calls, others waiting for the phone to ring. Do all of these people really have to be there?
Tradition has it that ‘the office’ is where one works. In retail, financial services, technology, FMCG, manufacturing or most anything else, the office has become the hub, with random people periodically ‘working from home.’
Here’s today’s reality
Competition among companies is becoming more ferocious, constantly. For every new market, there are more providers. Critically – and the difference between our era and all the eras that came before – technology is now enabling knowledge to be shared at a viral rate.
Holding onto a traditional model of employment, for its own sake or because change is scary, can be extremely costly.
- As an ad agency in Birmingham gears up for a slew of new clients and the staff grapple with how to produce huge volumes of video and text, there’ll be a freelance service in London that could provide content on demand.
- As a factory in Leeds tries to figure out a competitor analysis for its goods in central Europe and the MD discovers there’s no one in-house who can do the job, there’ll be an independent contractor in Warsaw who could offer an immediate, tailor-made solution.
In a time when economies are struggling to expand and markets are challenging operators, there’s not a company owner who’d choose to have predominantly fixed instead of variable costs, or who’d choose to limit his choice of professional expertise.
In the UK, while the unemployment rate stands at 7.6 percent, fewer than one fifth of employers expect to increase their headcount by more than 2 percent. In the private sector, the focus is on careful planning, rather than adding masses of full time employees.
The “office” can be anywhere now
Fortunately, as business owners balk at large-scale, permanent hirings, ‘the office’ can be literally anywhere with Internet connectivity.
The opportunity for employers (and workers) is clear. No one should in principle stick with the notion of large, fixed staffing as the benchmark. The environment and technology have moved on. Employers can find the expertise they need at short notice and in many places. Employees with skills can, as independents, offer their services not just locally, but globally.
There’ll be workplaces forever. But what there’ll also be is a swelling number of companies which recognize that plenty of business can be done more efficiently by employing from an expanding cloud of independent contractors.
The world provides a vast, technologically-enabled market for talent, on tap and simply when it’s needed. It’s not about the death of employment. It’s about the birth of efficient employment.
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