The way we work is changing.
Decades ago, you’d walk into a business, ask the manager for a job, and potentially work there for life. Nowadays, it’s not uncommon for people to switch careers half a dozen times before reaching peak earner status.
While labor mobility has been accelerating for years now, it could be COVID-19 that kicks it into high gear. In an effort to counteract the impacts of the global pandemic (e.g. supply/demand shocks), companies are beginning to embrace what’s known as “labor sharing” — a trend that could reshape the world’s workforce.
Fortune 500 companies explore labor sharing
Innovative companies like Unilever are pushing the limits of the sharing economy.
Via World Economic Forum (WEF),
“. . .Unilever has been establishing a coalition of companies to build a common pool of employees, skills-certified and union-backed, who can be shared across industries. COVID-19 accelerated this work, as it had a significant impact on Unilever’s business; some product lines encountered increased demand, others completely stopped.”
WEF goes on,
“To date the company has redeployed 4,744 internal employees and 4,369 third-party employees (such as in-store execution, merchandisers and beauty advisors). One employee sharing scheme was in Argentina with General Motors (GM) . . . Unilever is now developing a framework for deploying alliances and employee sharing globally.”
On one hand, labor sharing could prevent layoffs caused by supply/demand shocks and provide standardized employees (e.g. factory workers) with more dynamic careers. Instead of being fired or having their hours reduced, workers could be re-deployed to ‘allied’ facilities.
On the other, however, it could pave the way for megacorporations to dominate the labor market and stifle innovation.
Citing Goldman Sachs, Retail Insider Media states that FAANG companies currently make up ~21% of the S&P 500’s market value. And, as Amanda Mull from The Atlantic notes,
“. . .the fewer companies that control the economy, the worse the economy generally is for workers and consumers.”
We’re witnessing the predatory relationship between megacorporations and workers play out today. Take Amazon, the second most valuable FAANG stock by market cap, for example.
“. . .a confidential Amazon internal memo viewed by Recode reveals how the company is making significant investments in technology to track and counter the threat of unionization.”
The article continues,
“. . .Amazon is not alone among large retailers in its opposition to unions. Walmart is perhaps the most infamous for its anti-union tactics. The brick-and-mortar titan has been known to show anti-union videos to new hires and supply store managers with “Labor Relations Training.”
As mentioned above, labor sharing also presents a potential challenge to innovation and the quality of human capital, given that it encourages workers to focus on refining transferable skills rather than developing new ones. This could, in turn, suppress innovation, considering the critical role new skill development plays in increasing innovation outputs.
Labor sharing will change the global economy
Labor sharing is a transformative workforce strategy that builds upon the foundations of the Industrial Revolution. Although only a handful of companies are testing the waters with it today, economic pressures (especially those related to COVID-19) could enable it to go mainstream. If it does, the global economy will change — for better or for worse.