Last September the Globe and Mail published an article about an interesting company, We Wash Cars, that provides car-detailing services in Vancouver and Toronto. The company is unusual in the way it operates: Instead of running a garage where people bring their cars, it maintains a roaming fleet of vans that travel to customers. All the company’s services are provided on-site. In fact, the company has no office at all: Customers schedule their own service and pre-pay through a website, and the rest of the business is run out of the vans themselves. It’s a great example of what I called at the time a virtual company, one that uses technology to remove the need for a physical presence, lowering capital costs and freeing work from being tied to a specific location.
Earlier this month I learned from NPR about a company that has taken this idea a step further. Fuentek is a multi-million dollar technology-management services company based in North Carolina with a staff of about 40 people, all of whom are required to telecommute. Fuentek not only is a virtual company, it is assembled entirely of virtual workers, too. The company’s success demonstrates how it’s now possible to build a thriving business with workers free to set their own location and schedule.
I think these stories illustrate a significant, lasting change that’s occurring in the way work is done. I see several trends converging to bring this about.
First of all, the traditional model of full-time employment is breaking down. Following the greatest economic crisis of a generation, companies everywhere are looking to lower their labour costs, which has led to widespread layoffs and to reductions in benefits for those left behind. With the previous recession still fresh in our minds, no one can really still believe there is security in a full-time job. Companies are purposefully moving away from permanent staff; The Globe and Mail has also reported (the article is now available only to subscribers) on new concessions built into job offers and how the market for contract workers is booming amidst a shift to more flexible, contingent labour. Last month, Business Week offered a bleak outlook for employees:
The forecast for the next five to 10 years: more of the same, with paltry pay gains, worsening working conditions, and little job security. Right on up to the C-suite, more jobs will be freelance and temporary, and even seemingly permanent positions will be at greater risk. “When I hear people talk about temp vs. permanent jobs, I laugh,” says Barry Asin, chief analyst at the Los Altos (Calif.) labor-analysis firm Staffing Industry Analysts. “The idea that any job is permanent has been well proven not to be true.” As Kelly Services (KELYA) CEO Carl Camden puts it: “We’re all temps now.”
At the same time the employment market is unravelling, technology is steadily lowering the barriers to self-employment and entrepreneurship—for knowledge workers particularly, but as the example of We Wash Cars helps demonstrate, for others as well. The Internet and applications built on it are freeing workers from traditional nine-to-five, office-bound roles as quickly as these roles are disappearing. New tools like netbooks and smartphones make productivity possible far away from an office building. Voice-over-IP and virtual-private-network technologies allow the self-employed to project an office presence wherever they go. Social-media sites like LinkedIn, Twitter and Facebook are increasingly the way new colleagues and customers are found. Most importantly, the capital costs of setting up a small, virtual business are plummeting: Hosted web, email and even telephony services are now astonishingly cheap, as are powerful computers and professional-quality software. As Fuentek demonstrates, in the new virtual workplace, traditional outlays like office space and a network infrastructure are no longer essential.
It used to be self-employment was risky because it offered neither benefits nor job security. Once these things are gone from full-time work as well, how many of the bright and talented will be afraid to make the jump?
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