Beyond Employment: Hunker Down? By Becky Spears

This is the first post in a series about the future of work. 

Early in my career my parents worried about my carefree attitude about employment. 

• How can you work for a company that doesn't have a retirement plan? 
• What are you thinking – changing jobs after only 3 years? 

As an employee and part of a new generation, I was responding to a world in which US businesses were:

• Launching subsidized 401K programs as they discontinued retirement programs
• Using that somewhat new process Reduction In Force (RIF) to routinely manage employee resource levels

Employers said that responsibility for our careers and our retirement were now up to us, and so we had less reason to plan careers around one employer, a trend that has continued.

Expectations about and perhaps the very meaning of employment seem to be evolving. At the turn of this century Daniel Pink's Free Agent Nation documented a new workforce that is composed of people who are free from the bonds of a large institution, and agents of their own futures. Pink saw this workforce moving further outside the corporation, setting up consultant businesses, cottage enterprises, guilds, family businesses, and other self-managed modes of performing work for value. He shared stories of how people often made this change as the result of job loss, and yet many found reasons to stay. 

This emerging free agent possibility became a key dynamic for me during a baby boomer Scenario Planning initiative that I led about five years ago. Our Scenario Planning methodology was based on the Global Business Network (GBN) Developing and Using Scenarios Workshop that I had attended. In a desire to implement what I'd learned, I cajoled several baby boomer friends to embark on a wild scenario planning ride that we called Lifestyles 2015. I think we were all surprised when employment emerged as one of the two most critical dynamics (the other was the economy).

Even more surprising to me was that this free agent model emerged as a critical uncertainty in Scenario Planning sessions I subsequently led with business teams, causing me to ponder:

• To what extent and in what way is this trend inevitable?
• Are OD and HR professionals (myself included) prepared for this type of change in our clients' businesses?
• Who will take advantage of this change? 

In this post I'll describe Lifestyles 2015; future posts will describe other scenario planning outcomes related to employment.  [Editor's Note: a description of the scenario planning process appears at the end of this article.]

Lifestyles 2015

Two of our four future worlds were dominated by a free agent employment model – Hunker Down and Be Happy. The other two worlds were dominated by a traditional corporate employment model – Moat and Drawbridge and Corporate Life.  Here is the complete grid showing all four oppositional worlds as well as the critical dynamics that define and separate them. 

As these potential future worlds emerged from our work, the drivers we identified that would favor free agency included:

• Corporations offer employees less advantageous benefits compared to those widely available without employment (healthcare as the major new factor).
• Technology advances make it easier for people to set up a personal workplace (at home or elsewhere).
• Individuals desire more independence (flexible work time, choice in assignments) and aging baby boomers become more interested in using their acquired wisdom and expertise on relevant work.
• Favorable tax treatment encourages self-employment.

Potential drivers that would favor employment included:

• Corporations prefer on-site workers and are hesitant to contract with outsiders. 
• Corporations create the best places to work, offering benefits, flexibility, and amenities that are hard to improve on outside.
• Rising healthcare costs make self-employment viable only for those without that need.
• IRS becomes suspicious of the self-employed and increases audit activity. 

The Worlds of Hunker Down and Moat and Drawbridge

These worlds are on the left of the grid, the worlds in economic decline.

The term Hunker Down originated with the Scots and was first recorded in the 18th century. It means to take shelter and assume a defensive position, while also being ready to move at a moment's notice.  It's a good label for this potential world and probably a good label for many US workers and companies today.  Moat and Drawbridge symbolizes the protective strategy that you can also see today, as fewer people change jobs.  It's just safer to stay in your castle.   

In Hunker Down, we imagined an economic crisis centered on energy and water. Cost for these vital resources rises due to global and local scarcity versus demand. In addition the aging US delivery systems' capacity and resilience issues create shortages. Health care costs continue to increase, adding to economic pressures.

In response, Hunker Down corporations increase outsourcing to partners, contractors, consultants, or off-shore, implemented more automation, and reduce their reliance on employees. They increase delivery of services via the web – value which can be created or accessed from anywhere. The associated growth in technology infrastructure enables the self-employed to set up businesses in their homes or cars. Although economic times are tight, the small business sector grows as more people who lost their jobs chose this path. 

In Moat and Drawbridge, the world is in worse shape. Global tensions result in restrictions to trade and heightened concerns about security and control of intellectual property. US brands are furthered inhibited by the US political role internationally. Environmental degradation begins to take its toll.  Taxes and licenses imposed on use of the internet slow its use further. The US is in recession. Power and water are rationed.

In response, Moat and Drawbridge companies create protective walls. Although employment is still a cost to consider, they prefer this alternative to bringing in outsiders, thereby making it difficult for the self-employed to gain access. This is a tight world of high unemployment, protective security measures, and restricted self-employment opportunities. Large corporations dominate industry. Employees work by their rules. 

We considered options for our planning if we would eventually live in one of these worlds.  Our most critical options were:

• Develop skill and knowledge to ensure value as workers whether employed or self-employed
• Increase energy independence
• Save more and spend less
• Beware the US stock market; consider foreign investments
• Ensure that one member of the family stays employed by a corporation, to ensure health insurance coverage and some economic stability (if Moat and Drawbridge, everyone stays employed as long as possible)

The Worlds of Be Happy and Corporate Life 

These worlds are on the rosier right side of the grid, with a growing economy.  Be Happy has the same free agent and employment drivers, but due to economic wealth people are making the choice.  Corporate Life has the same employment drivers, but this is a wealthy world where corporations woo employees.    

In Be Happy, the US economy steadily grows due to successful investment in alternative energy and the emergence of the US as a leading world energy supplier. Even Detroit unveils new, cheap, energy efficient cars. This economic stability results in a shift in lifestyles to favor more balance between money and personal pursuits. Businesses that offer creative travel options grow as many people take breaks between work engagements. National borders are more porous and people truly work from anywhere -- tools and connectivity options multiply. Due to pressure from the large successful sector of self-employed, tax and other business laws evolve to favor this type of work.

In Corporate Life, the American economy is gradually growing and poverty becomes a thing of the past. Cottage industries are crippled by successful corporations, which offer employees real estate financing and a host of new benefits.  Health advances and excellent health benefits offered by corporations make that mode of employment the most desired. Even formerly retired people return to fill open positions, as flexible workdays are the norm.

In both Be Happy and Corporate Life, differences between an employee and a consultant blur. Many employed also work from home.  Homes become work and education centers, a hub for a family that often includes more than one generation.  Health coverage options are extensive and individuals choose the plans that match their values. There is a greater focus on well care, improving health overall.  

Options for our planning if we would eventually live in either of these:

• Learn how to use the net and exploit it in every way
• Develop skills that enable independent work (whether as employee or self-employed)
• Explore and/or consider joining a professional guild or association
• Invest in alternative energy companies and healthcare industries
• Consider a life coach – a mentor who helps you identify the most important activities for the rest of your life

The Real World of 2009
Today the economy would place us on the left side of the Lifestyles 2015 grid, experiencing Hunker Down or Moat and Drawbridge. 

Although only 11% of adults are self-employed (based on the 2009 Current Population Survey conducted by the Census Bureau & Bureau of Labor Statistics), the dominant employment model is under pressure.  The Kauffman Foundation index of entrepreneurial activity's 2008 report shows a statistically significant increase in the creation of new businesses during 2008 (+.3% over 2007).  Their data show that:   

• An average of 530,000 new businesses were created monthly in 2008. 
• The business classes experiencing the most growth were those with low and middle income potential.
• The people creating the most new businesses were aged 52 to 64.

In 2008, small businesses were on the rise, many created by boomers.

A NY Times article further explores this push toward starting a business in On to Plan B: Starting a Business by Mickey Meece.  Meece describes the changes that these new small business owner's experiences are having on concepts of employment. As the economy improves, some who have started businesses will remain entrepreneurs while others will will return to the workforce, but with a different vision of employment. Many say that even if they go back, they will continue their businesses on the side.

Even in these tight times, with many people eagerly seeking employment, the Pew Research Center found that self-employed adults are significantly more satisfied with their jobs. 

I am thankful that my scenario planning activity has focused me on this area, as I suspect a further evolution in the definition of employment is happening and is relevant for my future OD and HR work.  Daniel Pink argued that the shift toward more flexible employment models is beneath the radar of the political and media establishment.  Which is very understandable -- as Peter Schwartz, the founder of GBN, has said so well: The dominant intellectual strategy that people bring to the future is denial. It is hard to look past today's realities. This is why I believe Scenario Planning is so valuable.  Every deductive Scenario Planning workshop I've participated in or led has changed the way I see the emerging world and has changed the news I follow.

Will one of the four worlds come true? Nope. Often the reality cycles amongst them all, taking a piece of this and a piece of that and perhaps shifting in this direction, and then in that, in an environment that continues to update.  Scenario Planning is not meant to predict the future.  It is about busting open those mental barriers to consider potential futures that are not simply an extension of the past, and thereby enabling creation of a more robust strategy businesses or individual participants. 

Many of the drivers toward free agency are here today. The current economic situation has pushed many outside their comfort zone, into a new type of work.  In our professional futures, we'll encounter some of these people as employees who have returned to corporations, but with a different perspective. We'll encounter some as our clients' partners, consultants, etc. We'll work with clients who will embrace this expanded view of human capital as a strategic part of their business plan. The nature of the workforce is changing.  We need to consider that change as we implement OD and HR practices, to lead and support effective utilization of the the entire spectrum of a fluid human capital resource. 
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About the Scenario Planning Process

Deductive scenario planning following the GBN methodology is an intensive process and hard, difficult work.

• We begin with a consideration of the major forces that are driving change in the world.  This pushes us to think outside our local reality and produce an environmental backdrop that will help us see divergent potential futures.
• Through iterative convergence and divergence, we select the most critical uncertainties so we can focus on four oppositional worlds, and we consider probable causal factors for each. 
• We create scenarios (stories) depicting those futures, which gives them character and makes them more real to us. 
• Then we return to our local view as we determine the implications each of those futures would have for us, and potential actions we can take.
• The final step is to select which potential actions we'll include as we develop a viable and robust strategic plan, as well as identify key indicators that will help us continually reassess and adapt as the real world unfolds.