The New ‘Interim Economy:’ How Employment Has Dramatically Shifted
Part of Kathy Caprino’s series “Supporting Today’s Workforce”
In a never-in-our-lifetime milestone, the number of Americans who have filed for unemployment surpassed the 40 million mark with 1 in 4 workers becoming jobless over the last two months. And Director of the National Institute of Allergy and Infectious Diseases Dr. Anthony Fauci has recently shared that a second wave of the coronavirus outbreak in the U.S. could happen.
In our post-crisis world, many things will never be the same—including jobs and how we work. Career experts predict that it will be a dawning of a whole new employment marketplace for many American workers.
To learn more about this shift in our workplaces and the new manner in which millions of people will work, I was excited to catch up with Joe Mullings about his thoughts on what he calls the “Interim Economy.”
Joe Mullings has been building companies and careers since 1989. He founded and is Chairman & CEO of The Mullings Group, the world’s leading search firm in the medical device industry. The Mullings Group is responsible for more than 7,000 successful searches with more than 600 companies in the medical device industry. It counts among its clientele Johnson & Johnson, Google, Medtronic, Abbott, and Siemens. In 2020, Mullings was appointed the Chief Visionary Officer of MRI, Inc., ranked 3rd among executive recruitment firms with 400 offices worldwide.
MRI’s mission is to help recruiting and talent advisory firms thrive in every stage of their growth. Its global search and professional services experts provide a worldwide membership community with forward-thinking advice, training, and access to exclusive tools and systems. Through its menu of tailored services, firms offer their clients with full-service talent and business solutions.
According to Mullings, the Interim Economy will incorporate the former Gig Economy. Contract workers, freelancers, part-timers, and independent consultants, will be included, but also millions of workers, including management-level and professionals who never dreamed that they would be working for themselves three months ago.
Here what Mullings shared:
Kathy Caprino: You coined the term ‘The Interim Economy.’ What exactly does that look like in terms of careers?
Joe Mullings: The Interim Economy was kicked off by a rapid unintended transition into the emerging, Brave New World of Work caused by the coronavirus. In the past, a “freelance” or “contractor” position was more of a choice driven by lifestyle, additional income, or re-entry back into a career after taking time off to raise a family or deal with a personal issue as health. It also tended to be concentrated in specific industries, notably leisure, hospitality, and information technology.
The transition from full-time salaried employees to full-time or part-time contracted employees progressed to some degree over the last decade. To be clear, work from home was still the exception rather than the rule at virtually every company on February 1st.
Now, however, with the abrupt disruption of the workforce and the economic blow experienced by the business world caused by the pandemic, companies large and small will hesitate in bringing back all of their former full-time, salaried employees. They will consider how the overhead costs of paid-personal time off (PTO), healthcare benefits, retirement plans, and other additional costs, which add up to fully 25% or more of salaries per employee, are hitting their balance sheets in these unprecedented and tough economic times. Enter the Interim Economy.
Caprino: How does it differ from the Gig Economy?
Mullings: To a large degree, at least for many workers, the Gig Economy was one choice. The Interim Economy, for the foreseeable future, will be a survival strategy and eventually a ramp to full-time re-employment—both from the employee and the employer perspective. Self-employment was on the rise and had recently become especially desirable. Self-employed individuals had multiple choices in a Gig Economy that—until three months ago—was very healthy.
In a Gig Economy, organizations were accustomed to outsourcing work to individuals who had specific skills and could hit the ground running and immediately impact a project that had a clear start and finish. A company could flex its HR muscles by employing their contracted workforce on-demand, whenever needed. Now, if you can imagine that but on a much larger scale and for all kinds of workers, including managers at all levels, then you have a good idea of the Interim Economy.
Caprino: You suggest that how and where workers are employed will change radically in the new Interim Economy. Can you paint us a picture?
Mullings: A recent study concluded that up to 40% of all jobs could be performed at home, while before the pandemic, it was estimated that only 3% did. So-called flex time was a luxury.
Last month both Facebook and Twitter announced that many of their employees would continue to work at home indefinitely. So, there’s huge potential for the emergence of the Interim Economy.
Ironically, it was the tech world that temporarily slowed this trend earlier in the decade. Remember when in 2013, then recently appointed Yahoo! CEO Melissa Mayer stopped all remote working, issuing an edict that reverberated throughout the tech industry and beyond.
Her memo to all Yahoo! staffers included this infamous excerpt: “Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together.” It sounds positively Jurassic, now.
Fortunately, a recent survey by the Gartner research firm of chief financial officers found that 75% planned to permanently increase the number of employees working remotely. That synchronizes with a recent Gallup poll that found nearly 60% of employees would like to keep working remotely after access to businesses and schools have been restored.
In the next four to six months, watch for how these two dynamics develop, which again, existed before but never at such a scale as we are experiencing now:
Permanent Remote Employment
When the workforce immediately had to shelter in place, businesses had to pivot quickly and figure out how to make that work. The new normal includes a dramatic increase in the use of virtual meetings, collaboration across time zones, and shared work platforms enabled by technology. What both individuals and companies found is that they will no longer be held hostage to the extent they are today by geography.
Location-Adjusted Salary/ Compensation
Does it make sense to pay employees the same if their cost of living has been reduced significantly because they no longer need to live in close proximity to where their company is located? The cost of living in San Francisco, for instance, is tremendously different from the cost of living in Flagstaff, Arizona.
If a person is able to work as an interim employee and perform remotely from essentially anywhere, the salary requirement may differ by as much as 30%. That could have a tremendous macro-economic impact on business.
Caprino: We saw in the last economic upheaval—The Great Recession—that workers 50 years or older were affected harder than other age groups. It took months, even years, for many of them to be rehired, and when they were, oftentimes, it was for a substantially lower salary. How do today’s 50+ workers protect themselves from the same thing happening after the pandemic?
Mullings: Let me be frank: The 50+ crowd is at risk. Generally-speaking, they are the group that is highest compensated and least likely to be accustomed to learning new skills as compared to their younger peers.
Even before the crisis, the rate of acceleration of technology was outpacing the rate of adoption and utilization of “new tech” by the 50+ crowd. The pandemic has driven new business models to be created and older business models to be put to rest. Darwin is always present in a free-market capitalist environment. As is the case with most new business models, there may be lower rates of pay, new skills required, and a younger generation prepared to step into the fray.
This is not to say, however, that the 50+ crowd has not honed valuable skills and possesses irreplaceable institutional memory. In fact, look for all of the workforces to be more adept at creatively finding jobs, marketing/branding themselves to their industry, and preparing for interim job roles.
Caprino: As the shelter-in-place situation continues for much of the country, what are some practical, career-building advice for workers, no matter what their age or profession.
Mullings: The number one activity that every worker should get comfortable with is professional branding and reputation building in their respective areas of expertise. The days of sending out resumes, answering job postings, and hoping to tap into analog networks of exclusively “people you know” is so pre-pandemic. Simply put, it will no longer create the best opportunities for employment. Active networking, proper positioning of work experience, and personal web pages for careers are all critical assets for employment and careers moving forward.
One way to begin enhancing your personal brand while still sheltered at home is to begin following key director or VP-level executives of companies where you’d like to work. Gradually begin posting social media messages that you think they would like to see. When they respond to your posting, then you’ve taken the next step to becoming part of their inner circle.
This moment, while these hiring targets are working from home just like you, is an especially opportune time to pursue this strategy.