Singular: The Future of Employment

In tomorrow’s world, every individual will operate as a single economic unit: he or she will create value by using technology and sheer individual effort, determine what to do and when, and not be guided or bound by any institutional restrictions or compulsions.

Used to be that in an earlier generation you would join a company as a “permanent employee” at the bottom rung of the ladder and work your way up the organization, receiving professional mentoring and avuncular career guidance along the way, sometimes staying in the same organization your entire career, and retiring one day with a pension plan, a gold plated wristwatch, and a plaque. Changing employers seldom happened. For that matter, change seldom happened in the world at large.

When I graduated from IIM Calcutta in the late eighties, we all lined up dutifully on Placement Day in our brand new suits to appear in an assembly line of interviews with sombre and similarly suited executives to vie for an entry-level position in a multinational bank, a national consumer goods company, or a global advertising agency.

When I visited the campus recently, I noted that not one of those companies was in the top list of employers, and moreover, many of the soon-to-graduate students had decided not to apply for a job, choosing instead to launch an entrepreneurial venture. That confirmed my doubts about a) the relevance of management education today and b) the future of “employment”. (I invite you to read an article I wrote last year on why working for a start-up is better than an MBA that seems to contain some naked truth, going by how it continues to be shared over and over again).

Today, large corporations worldwide are withering. Be it ultra-white-collared banks, venerated consumer and industrial goods companies, state-owned mega-corporations, or any number of other categories—one thing is common. They are uniformly embattled institutions struggling to remain relevant to their customers. However, they continue to valiantly put up an appearance of growth and profitability. In some cases, they do this by buying other businesses to bulk up and slash redundant workers (Big Pharma), and in others, they sell unprofitable businesses and slash redundant workers (IBM).

In the process, these large corporations have become completely soulless environments where the struggle for survival and job protection pits people against each other on a daily basis. Compassion and empathy, the foundations of a harmonious society, don’t exist in large corporations today.

Management guru Gary Hamel declared recently that “large organizations of all types suffer from an assortment of congenital disabilities that no amount of incremental therapy can cure”. (Read his incisive and well-articulated indictment of the large western corporation here.)

In an age where the permanence of an employer is a big question mark, the notion of “permanent” employment has become quaint and laughable.

So what is the future of employment?

My submission is this. There is no such thing as “employment” any more, much less anything called “permanent employment”.

To understand this, we look for clues in the changing dynamic of the relationships between corporations, their employees, their former employees, and their potential future employees.

The rupture of trust between employers and employees—something which was the bedrock of society and the economy a generation ago, enshrined in the promise of “permanent employment”, is the only thing that is “permanent” today. Deprived of job security, individuals are turning into free agents with little or no loyalty to their employers.

From mid to late career professionals all the way to millennials, people are tending to work—by choice or compulsion—in smaller, more collegial environments where there is work-life balance and flexibility, mutual trust and collaboration. In many cases, they are eschewing formal employment altogether and opting for self-employment. (Women employees, who choose to displace themselves to attend to families, newborn children, or simply for better work-life balance, are in a unique sub-category that influences this dynamic.)

Disenchanted with and distrustful of large corporations on the one hand, and lured by the opportunity to remain independent and do meaningful work on the other, the next generation is increasingly choosing self-directed occupations over employment. This often takes the form of entrepreneurship. I met a young man named David from Holland at a meditation retreat in Thailand earlier this year. He had just graduated from a hotel management programme, and was planning to return to Holland after his travels in South East Asia to set up a restaurant with some friends in Eindhoven. I never heard him use the word “job” during our entire conversation.

These young men and women are also adjusting their lifestyles in very definite ways, such as choosing public transport over owning a car, renting vs buying a home, and saving vs spending on goods. As this shift robs large corporations of revenues from the next generation of earners and spenders, they are not just hiring less people but are letting go of people they have, which in turn, diminishes them even more as their most loyal customers become displaced workers that leave the ranks of shoppers and buyers of the company’s products and services.

There are some exceptions to this. In some countries such as France, Spain and Greece in Europe, where the Government was and is the main employer, people will most likely stay with their employers till they complete a certain tenure—with guaranteed pensions as the foundation underpinning this relationship. This promise is soon to be broken as governments can no longer fund pension programmes (and in many cases, even salaries), and we are already seeing that play out most painfully in debt-burdened southern Europe.

In other cultures, such as collectivist Japan, it was—and still is—not an accepted practice to change employers, even if they are privately owned for-profit corporations. The only difference is that in the case of European government workers, they get away with very little work, whereas in Japan, employees work long hours, sometimes literally dropping dead of overwork (the infamous Karoshi deaths which are a blot on Japanese society).

We know that economic growth in these countries is slow and sclerotic, leaving employees with few alternatives. Left with no choice, a generation of unemployed and underemployed youth in these countries is set to take their destiny in their own hands and become their own employers.

On the bright side, fantastic new opportunities are being created by the astounding rise of technology led innovation and entrepreneurship, in Silicon Valley in the US, in the maturing tech sector in India (going beyond the big and successful IT services firms), and in the explosion of technology firms in China (exemplified by the Zuckerbergian success story of Jack Ma and Alibaba). Among other things, this is an unfolding story about how a very small group of individuals—very often, just one individual—can create billions of dollars in enterprise value in an extremely short period of time by developing a product or a service that can scale very rapidly, and can shake up some traditional marketplace and put a longstanding corporation out of business virtually overnight.

The story of how video-streaming service Netflix brought video rental retailer Blockbuster to its knees and eventually banished it on a one-way ride to oblivion with a bankruptcy ticket is the story that will be discussed in business schools for a long time to come (assuming business schools will be around that long). Created by single individuals or a very small group of individuals, innovative young companies like Uber and AirBnB are writing new rules for business while large corporations struggle with their incrementalist approaches to “innovation”.

So what does it mean for the individual?

When every individual is expected to change a dozen jobs over the course of a career, it is employment by name but free agency for all intents and purposes, with frictionless transitions from one “employment” to the next enabled by personal accomplishment and expertise, and strong social and professional networks. Every stint with an “employer” is just another gig that adds value through cash compensation, learning opportunities, relationship networks, and eventually, some form of success defined as money, expert knowledge in some field, institution building, and legacy creation.

As Reid Hoffman, the founder of Linked-In, says in his book, The Start-up of You, a career now means building your own personal brand and treating yourself as a business of one.

I describe this as the Singular phenomenon. A single individual drives his or her own destiny, with little or no guidance and support from an institutional employer, and often does this with the help of advanced and readily available information technology, and most likely a very small group of fellow Singulars. These are individuals who value independence, intellect, and drive, and have low or no tolerance for formal authority of any kind, especially the bureaucratic command-and-control structures of large corporations.

In this world, every individual operates as a single economic unit: he or she creates value by using technology and sheer individual effort, determines what to do and when, and is not guided or bound by any institutional restrictions or compulsions. Utopia? maybe not. But it’s a Singular world. And it’s yours.