Sam Huleatt, IntelliGrad
For our parents’ generation, the traditional employment model consisted of being hired by a company and staying put for a good portion of your career. You could work your way up the ladder and enjoy a level of security thanks to good pension plans and health insurance. Not anymore. Times have changed. Companies new and old are trimming labor forces, hiring independent contractors and off-shoring to India. The future of employment in America, specifically for higher level, white collar jobs is moving toward niche specializations, where firms will utilize individual consultants for individual projects. The good news is that if prepared, young professionals can position themselves to excel in this new environment.
Three primary forces and trends have conspired to change traditional employment models:
- Globalization (especially technology)
- The cost of real employees
Globalization has made the cost of hiring highly skilled labor very cheap. Whether accounting, search engine optimization, web design, or product design, American firms can now reliably contract employees overseas who are willing to work for a fraction of the cost of U.S. labor rates. This means that employers are no longer limited to the skill sets of their current employees; in essence they can cheaply contract out experts.
Technology has helped to increase globalization by allowing reliable and fast communications with anyone in the world, anytime, from anywhere. However technology has also had another function: it has created new, very specialized jobs and skills. For example in the next 10 years the ’hot jobs’ are likely to be in online advertising and web development, including SEO, SEM and PHP coding. If you don’t know these acronyms, you’re already behind. Again, these new job functions are very specific skills, but they can easily be accomplished remotely from any computer.
Consultants now exist for every possible industry and skill set; the key question is what makes consultants so successful? The answer is broad industry experience and exposure. Rather than having worked for one firm, these consultants have experienced a diversity of organizations so they can call on a substantial rolodex of contacts and experiences. Also, consultants have the luxury of focusing on ’big-picture’ strategies, rather than getting caught up in day to day operations as full time employees do. Thus there outside perspective can more easily identify inefficiencies and opportunities for performance improvement.
Finally the cost of having real employees has increased exponentially. For example, in past generations a medium sized company might have hired a marketing manager with a ’background’ in marketing, but he or she also oversaw communications, managed the website and did some design work. Let’s say they earned an annual salary of around $75,000. However, as a full-time employee, their benefits and taxes would add an additional $15,000 to the salary, for a total cost of $90,000. In 2006, for that same $90,000 the company can hire someone part-time who manages a team of Indian consultants who are highly specialized in direct marketing, web design, and graphic art. Since they are only paid for specific projects, the company saves money by 1) not paying for ’down time’ and 2) they get more highly skilled and specialized employees and 3) they still likely save $10-$15,000.
Armed with knowledge, what can a young professional do to prepare for this new employment environment? As Sun Tzu would suggest, we need to proactively deal with this changing landscape. Young Professionals should worry less about titles, and tenure at a company and focus more on acquiring skills and certifications. Although most people base jobs on salary, be smarter: the difference between $35,000 and $40,000 may seem like the world, but it’s not. Take jobs where you will be trained, not hidden in a back office copying and filing documents. When you’re new, make an effort to meet with your boss and let them know about your interest or skills you want to learn: financial modeling, editing, web designâ€œ bosses are not psychics, so they will only know your true interests if you tell them.
Intelligrad.com offers a number of strategies for dealing with this changing labor environment. We have interviews with industry leaders and young professionals discussing approaches they took to get the most out their jobs. Look at our information on working as an independent consultant. Overall, remember to expose yourself to good risks at every opportunity; offer to help on a new project, sit in with a client, or take a part-time job. Do whatever you can to develop as many specialized skills as possible, even if they are in diverse subject matters. If you don’t think there is much need for graphic artists who know financial modeling and biotechâ€œ you might want to talk to Pfizer or Merck because they’d likely hire you in a heartbeat.