The New Structure of Employment

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The New Structure of Employment

Until the 1980s, most American businesses were composed almost exclusively of full-time, long-term employees.  People were typically hired with the idea that they could stay until they retired as long as they did a good job. 

Companies provided their employees with paid vacations and other benefit programs.  The employer expected loyalty from the employees, and vice versa.

Today, that’s all changed.  As business guru Charles Handy forecast over 20 years ago, the so-called “shamrock organization” has become the norm.1  It is typified by three parts: 

  • A permanent full-time corporate core that keeps getting relatively smaller.
  • A portfolio of specialized consultants or contractors creating “specific deliverables.”
  • A rapidly growing population of temporary workers employed on an “as needed” basis. 

 

In this structure, the “corporate core” acts as the repository for organizational learning, corporate culture, and strategic insights.  It is responsible for ensuring that the right resources are available to the right people at the right time to maximize value creation.

The specialized contractors are typically hired to deliver specific results for a specified price.  In manufacturing, this usually involves outsourcing production and physical distribution. 

These contractors tend to choose their own work methods, their own projects, and the methods they use to acquire intellectual and human capital.  They typically rely on a pool of resources they’ve accumulated for use with many clients. 

Whether they are solo practitioners, larger professional firms, or large companies with highly-focused functional competencies, they tend to see themselves as being distinct businesses, rather than employees of the “core.”

Temporary workers, on the other hand, are assigned to firms to perform work on an as-needed basis.  They are typically paid on an hourly, daily, or weekly basis, and perform work using the client’s standardized methods.  In many cases, “temps” work right alongside “core employees,” but they don’t have the same job security. 

Most temporary workers and many contractors form what can be labeled the “contingent workforce” — a group that is not eligible for unemployment benefits.

One of the biggest factors driving the growth of the contingent workforce is the volatility in the business climate.  Organizations have concluded they must become more agile in their management of labor, a characteristic that is lacking in the traditional, corporate core...

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