By Jack Cumming
Not long ago, I had an encounter with a parking lot gate at the San Diego airport. You may know the feeling. I had just returned from the Atlanta LeadingAge meeting. A machine near the terminal took my payment to validate my parking ticket for the exit. When I got there, though, inserting the card had no effect. What’s more, there was no attendant anywhere in sight and no phone number to call for help.
Cars began to back up behind me. Their drivers were impatient. The gate appeared to be rubber protected, so it could be forced when all else failed. I gave it a try. Big mistake. That encounter with the gate damaged my car. A policewoman strolled over, but said she could do nothing. I pleaded, and she flashed a card, the gate sprung open, and I was free. With the labor shortage, such unattended encounters are common. That’s the obvious side of the workforce challenge.
What happened next illustrated the flip side of the workforce challenge. It’s how I got my car back to pristine condition. There are lessons here for senior living as for every other labor-intensive industry. Work relationships are changing in the digital age. We can resist change and bemoan the workforce challenge, or we can embrace change and adapt.
The Independent Worker
The story of my damaged car demonstrates the potential of the gig economy. I went to the dealer who estimated $1,500 for the repair. The dealer assumed that insurance would cover much of the cost, but without damage insurance, I was free to think more creatively. Moreover, I doubt that any insurance company would pay for anything as foolish as my having tried to force that gate.
I learned of a freelance worker, operating in the gig economy, who would do a quality repair for what turned out to be a third of the price. Chris Slaughter’s high-quality workmanship would never be adequately compensated by a conventional body shop owner. He’s one of a new trend among working people who value independence and take pride in their ability and performance. After trying the work-a-day world, he now has his own business, which he operates with almost no overhead, passing the savings along to his customers.
What struck me about Chris, was how central digitalization is to everything he does and how he takes for granted technologies that are still rare in senior living. He built his own website, without having to pay a developer, putting together the information that prospective customers need and expect. He then placed his own Facebook and Google ads to attract people needing his services. That investment pays off handsomely for him.
Pride and Value
Moreover, Chris works out of his truck, bringing his services to his customers, saving him the overhead of leasing a shop. A byproduct of that economizing is that he also gives customers convenience above and beyond their expectations. His smartphone is central to how he operates. Although he offers more old-fashioned ways of contacting him, I was able to text him photos of the work needed. He texted back an estimate and a time slot for getting the work done. He arrived when scheduled and went right to work very professionally. He texted again when he finished. I inspected the job and was astonished at the quality.
Payment followed just as easily. He offered multiple payment choices but I chose PayPal. He held out his Smartphone with a QR code. I focused my iPhone’s camera on the code. We were connected. I typed in the payment and hit send. It was that easy. I asked him if he runs his whole business on his smartphone. He does but he keeps his accounts in QuickBooks on the computer in his office at home.
The Gig Economy
The old idea of work has been that workers sell themselves by the hour to employers who direct their activities during work hours subject to legislated social protections. The emerging idea is one of partnership in which workers enter into accords with people needing services to get work done. Chris Slaughter’s way of doing business is an example. It saves overhead. It gives customers lower cost. And, it elevates the dignity of work. It’s called the gig economy, and it’s controversial. Unions don’t like it; they thrive by bargaining in the old work economy. Employers are troubled by it; they are used to the industrial era idea of labor organization. Corporate chieftains are uncomfortable; they like control.
Is this premise overstated? Perhaps it is, but it can be useful to consider the possibility that it’s not. Will the old ways endure? Of course, they always do. There are still farmsteads like those that dominated the American economy in the 19th century, but industrialization changed the economic landscape through the 20th century. Industrialization is still the norm today even as digitalization is changing the way we live, work, and play. The gig economy is an example of how digitalization is supplanting industrialization.
The industrial model of the assembly line required the drumbeat of the hourly work model. The enduring need in senior living for repetitive chores – collecting trash, food service, caring for the frail – perpetuates the hourly model. Shifting these latter recurring tasks away from the established cadence takes imagination, but it can have the effect of elevating the dignity of work and of making those who fulfill our missions the heroes we have proclaimed them to be. Making such a change will require experimentation and innovation.
Already, entrepreneurial thinkers are coming forward to help with change. For senior living, as just one example, Robert Crowe’s Matchwell firm offers the chance to outsource an entire workforce, allowing the provider organization to focus on mission and quality of care, while leaving the challenges of ensuring shift coverage, compliance, vetting, and more to a specialist. Matchwell is challenging the “registry” model of temp staffing to provide better value, i.e., lower cost, while extending the breadth of services with a gig economy vision. This is an embryonic venture but the vision is there.
Back to the Future
The shift of work from industrial age regimentation to independent employment (comparable to how farmers, merchants, and craftsmen operated in a bygone era) was foreseen by Marion McGovern in her 2017 book, “Thriving in the Gig Economy: How to Capitalize and Compete in the New World of Work.” Intriguingly, Ms. McGovern serves on the Board of at least one senior living provider. Slowly, as one might have expected, the gig economy is becoming a senior living reality. Those businesses that are adapting are less impacted by the dread “workforce challenge.” Some of them are Matchwell clients.
Registry is, of course, the first example of the gig economy that comes to mind for people serving the most frail and vulnerable in the skilled nursing segment of senior living. That is a small part of the industry, however. Of the 55 million Americans now over age 65, just about 1.5 Million are living in nursing homes. That’s less than 3%. There are people in senior living who think of the industry solely as nursing services but that misses the other 97% who also need services.
The Changing Work Economy
The pandemic demonstrated that the common aspiration for job security was no more than a will-of-the-wisp that evaporated as COVID-19 pressures made layoffs unavoidable. Previously, the expectation was that worker loyalty and subordination would be rewarded by job security. When COVID shut parts of the economy down, the myth of job security was shattered. Many workers discovered the gig economy – Uber, Lyft, etc. – when they had nowhere else to turn.
Will that cultural transformation endure once the economy is fully back on track and pandemic fears are history? The old idea of work requires employees to elevate loyalty to their job above home and family concerns. That pretense of personal sacrifice is muted by the gig concept. It seems unlikely that the former tolerance for depersonalizing subordination by workers believing in job security and benefits will return.
The Amazon Effect
A big question is whether the social politics that has long coupled healthcare and pensions with employment will endure or be replaced by a more portable individual entitlement to benefits. Before industrialization, these benefits were community and family-based. Digitalization allows, and even encourages, a more individualized approach. How such benefits should be funded and delivered is now top of mind in the political divisiveness that is roiling government policy deliberations.
In the meantime, new ways of doing business, grounded in digitalization, are already impacting labor with a force comparable to regulatory and compliance interventions. During a recent panel discussion, Joe Zidle, a managing director for the Blackstone Group, cited the “Amazon effect” as a stronger force elevating minimum wages than the politics of minimum wage legislation. When an Amazon facility opens in a community with higher wages, it’s only natural that employees gravitate to the better-paying jobs. Other local employers then have no choice but to match what Amazon offers.
We can speculate on how and why Amazon is able to pay higher wages than senior living for equivalent jobs. For one, Amazon has automated many of its operations with robotics and artificial intelligence. Senior living has lagged. It’s not that senior living leaders might not want to improve productivity, but make-work labor laws require minimum staffing ratios regardless of need or efficacy, and other industry elements conspire to keep senior living labor-intensive.
Change Is Coming
Amazon is already heavily into the gig economy. The last mile deliveries are often managed digitally as gig undertakings. People like Robert Crowe and his Matchwell organization are showing that gig concepts can work for senior living. In the meantime, conventional organizations are continuing to grapple with the challenges of meeting needs while struggling to retain the old ideas of work organization.
Not surprisingly, we are seeing inflation begin to take hold as economic expectations are destabilized and business seeks to adapt to changing exogenous factors. Changing cultural concepts for work are only part of this larger picture. It’s too soon now to see how it will play out. It seems likely though, that those businesses which adapt to changing worker and customer expectations will be better positioned for the future than will those who stay mired in the past, pre-pandemic.
Marion McGovern’s book, “Thriving in the Gig Economy”, is an actionable guidebook outlining ways to maneuver in this new world of employment relationships. Click here to find her book on Amazon. You can explore Matchwell’s innovative approach to staffing by clicking here.
