The Effects Of Nontraditional Forms Of Employment On Employees And Employers

The effects of nontraditional forms of employment on employees and employers

Introduction

What is your career choice? Doctor, engineer, IT expert, accountant, or may be something different? How would you develop your career? The latter question is becoming one of the major concerns for individuals if not the first when deciding for career and employment. Career can be developed in both traditional and nontraditional form of employment. Van Maanen and Schein defines career development as “a lifelong process of working out a synthesis between individual interests and the opportunities (or limitations) present in the external work-related environment, so that both individual and environmental objectives are fulfilled” (qtd in (Buck, MacDermid, Lee, Williams, 2001). Traditionally, organizational environment that employed the individuals determined the objectives of individuals. Further, as Hall and Mirvis explains, “The result was traditional “organizational” careers that were externally-oriented, emphasizing vertical progression through positions carrying increasing responsibility, status, and rewards defined by the organization” (qtd in (Buck, MacDermid, Lee, Williams, 2001). With changing times and technology, jobs are being redesigned in a nontraditionally way to benefit both the employees and the employers. Today, nontraditional forms of employment offer several career options such as independent contracting, and telecommuting. Thus, in the changing times, the choice of nontraditional forms of employment influences the employees and employers greatly. The understanding of the pros and cons of these choices is necessary.

The purpose of this study is to understand the effects of nontraditional forms of employment on the employees and the employers. Several literary articles that include industry related and empirical studies conducted earlier by different authors were examined. The benefits and disadvantages of self-employed contracting, and telecommuting employment to individuals and organizations using are examined.

One limitation of this study is any specific industry that may be advantageous and disadvantageous in the choice of career options that are present in this study. The study was limited to the results observed from previous studies.

Review of related Literature

Many experts provide insight into decisions about career choices and its development. Yet, employment status of the jobs are ignored or assumed to be in employment rather than in possible self-employed. However, fifteen percent of the total workforce even in developed societies is self-employed. Thus, the first part of this research examined the individual self-employed contracting. The decision to go for self-employed contracting and its effects are explored.

One of the reasons for unavailability of any literature and research in management on individual self-employed contractors is that their mobility and their lack of strong ties with any particular organization or trade union render them invisible and difficult to study. A managerial question that exits is whether the decision to secure stable supply of labor through employment of worker or keep flexible supply of labor by having workers under contract will be competitively advantageous. Most of literature research focuses on the advantages and disadvantages to the business while neglecting the effects on the workers’ choice. In literature on self-employment, the workers choice of choosing between contracting and employment rest on economic, sociological, and psychological factors affecting these choices whereas, according to Campbell, “economic models suggest that decisions to start a business are attributable to economic motivation and utility maximization” (Buck, MacDermid, Lee, Williams, 2001).

Many reasons exits for individuals opting for self-employed contracting. economic opportunity, authority, autonomy, challenge, self-realization, and participation in the “whole” process of production are some of the reason of the contractor workforce. Increased autonomy, earning maximization, and personal development are some benefits contractors receive. Three important components serve as the basis of benefit within contracting arrangement such as autonomy, higher earnings, self mastering in development and involvement at one’s own will. As with autonomy, “the ability to have control over how they did their work, the ability to control when and where they worked, and the more general feeling of autonomy that came from working for themselves” (Buck, MacDermid, Lee, Williams, 2001). A research on two different types of contractors; unskilled meter readers, and draftsman and engineers in U.K found

different benefits and drawbacks. Through contracting the individual is able to control his or her own work and has the flexibility to integrate it with preferred lifestyle. Earning maximization is an obvious benefit of some contracting arrangements. Contractual job offers premium to make temporary work attractive. Besides, work-related expense claims lowers tax. Remuneration that is tied to work performance can maximize income by working longer hours. Depending on personal level, as cited in Career Development International, “Contracting makes the contractor the guardian and agent of his or her own personal development, able to tailor development experiences to career goals, or experiment in new directions” (Buck, MacDermid, Lee, Williams, 2001). Similarly, contracting provides an individual the opportunity to seek challenge, variety and change in the contracts undertaken, enabling not just personal stimulation but the development of new career-relevant skills. The developmental benefit was found to be more relevant for draftsman and engineers

In the face of all these benefits, these very benefits have drawbacks. The benefit of autonomy is constrained by situational factors such as nature of work. Some examples are operational requirements of rendering the service at client’s premise, on premise with a team or working on holidays even when not desired. The desire of earning higher earnings may be limited to insecurity of contract status, the variability of earnings, and the time spent on non-revenue generating tasks, such as administration. Personal development and skill enhancement are the two biggest drawbacks contractor has due to limitation of available experience and cost of formal programs. On the other hand, the employed individual has the possible opportunity to develop the skills and knowledge with employed organization. Also, the work becomes less challenging if