Free Agents in the Olde World

The future of work in Free Agent Nation may look strangely like the past, says MIT's Thomas Malone. Prithee: Art thou ready to join a guild?

Go back to medieval times, back to the 12th and 13th centuries. Back before there were companies and unions, back before there were venture capitalists and entrepreneurs. Go back, and you arrive in the Middle Ages, before Europe knew of a New World, never mind a new economy. Back when there were guilds: merchant guilds, which sought to organize and control how business would be done within a given geographic territory; and craft guilds, which formed to establish work standards, to protect the interests of the workers, and to look after the old or sick members of the guild. In the medieval world, guilds played a crucial role in organizing commerce and in structuring how work got done.

Now, says Thomas Malone, a professor at MIT's Sloan School of Management and founder of the Center for Coordination Science, take a look at the future of commerce and at the structure of how work will get done. Look particularly at the choices that are available to free agents and talented workers, and what you'll discover is . . . the reemergence of guilds. Malone, 48, says that guilds offer talented workers an organizing principle by which they can associate with others who share an occupational affinity, develop professional skills, and share their need for new ways to provide for benefits and security. According to Malone and MIT research associate Robert Laubacher, new-economy guilds are emerging to help free agents meet financial and social needs outside of traditional full-time jobs. From the research at his center, Malone says, he intends "to identify the choices that are available and to find new ways to organize work as creatively and as wisely as possible." Fast Company visited Malone in his Cambridge, Massachusetts office.

How should we imagine guilds operating to help free agents?

You don't have to imagine anything! We have guilds today -- think of the Screen Actors Guild (SAG). Guilds are organizations that provide a wide range of services for mobile workers, the kinds of services that employers have traditionally provided. For example, sag contracts stipulate that producers pay a surcharge into the guild's benefits fund -- an amount that can be as much as 30% of an actor's base pay. SAG members need to earn only $6,000 in a calendar year to qualify for full health benefits for the entire subsequent year. SAG offers educational and professional-development seminars to its members, and, because many actors have relatively short careers, SAG also provides very generous pension benefits.

New guilds could provide those services, among others. They could create cross-firm skills-accreditation standards, develop industry-wide job descriptions and salary guidelines, and even design a way for members to build the equivalent of a personnel file whenever a person's career involves working for more than one firm.

Those are largely economic functions, but guilds also could provide opportunities for e-lancers (electronically connected freelancers) to socialize with their peers -- both on the Web and in physical locations. Guilds could provide a meaningful sense of identity that goes beyond that of a company: You may not be an employee of Ford Motor Co., but you may be a member of the automotive-engineers guild, working a particular grade level.

Is there something that makes guilds appropriate now?

Clearly, significant changes are happening in the world of work. One study found that up to 40% of the workers in Silicon Valley operate in nontraditional arrangements, either as part-time, contract, temporary, or self-employed workers. For the United States as a whole, between 25% and 30% of workers are in nontraditional arrangements -- and that percentage will grow.

The information economy puts a premium on flexibility and adaptability. Guilds provide a support structure that fits such an environment. It's not surprising that we've seen guilds develop in the construction industry: When workers finish one project and move on to the next, they often change companies. To accommodate those circumstances, construction trade unions offer their members portable health and pension benefits: Members can maintain one health plan and can pay into one pension fund, regardless of which firm employs them for a particular project.

Do you see any signs that suggest that more and different types of guilds are emerging?

Certain organizations are already becoming guildlike. Staffing agencies such as Aquent, Kelly Services, and Manpower could evolve into guilds. Over the past two decades, as more people have begun to work as temps, staffing companies have increasingly offered health insurance, pensions, training, vacation, sick pay, and, in some cases, even stock options -- the kind of benefits that full-time employees received under traditional employment contracts. Some agencies have been aggressive about providing benefits and training, as well as attempting to create a sense of community, offering a psychological workplace "home" for workers who affiliate with them.

Aquent, for example, not only provides health and pension benefits but also offers extensive career assistance -- a service that Aquent calls "having your own personal Jerry Maguire." The allusion is to the Hollywood movie, and the idea is that Aquent will be your career agent. A number of Web firms, such as FreeAgent.com, eLance, guru.com, and Monster.com, not only offer job matching on the Web but also provide a variety of other services, such as advice on issues of interest to freelancers, health and pension plans, invoicing, and low-cost office supplies.

What do you think guilds will mean for the companies of the future?

Actually, I think some companies of the future will be guilds. Today, we think of a company as an organization that hires a bunch of people and that is primarily responsible for producing something that customers are willing to pay for. Instead of a company thinking of its role as providing products or services to customers, some companies may come to think of their role as providing services to their members -- while their members are responsible for providing products and services to customers. It's an upside-down picture of today's company. The function of senior managers will be to provide services to the workers throughout the company, while the workers worry about keeping customers happy.

Suppose that you're a free agent and you'd like to belong to a guild. What should you do? Start one?

Rather than trying to start a guild from scratch, the easiest thing to do is persuade an existing organization to take on more attributes of a guild. Labor unions could provide more comprehensive services to the mobile workers of the new economy. So could college-alumni associations, Web-based job-matching services, and perhaps even religious groups or neighborhood associations.

Many of those organizations already do provide some benefits. Occupationally focused groups -- professional associations such as the World Wide Web Artists' Consortium and unions such as the Communications Workers of America -- forward the interests of collections of workers who are active in the same industry or are possessing similar workplace skills. These organizations are logical candidates to assume some of the roles formerly played by companies. Professional societies also offer affinity programs for members.

Of course, you could start a guild on your own. One model to look at is Working Today, a New York-based nonprofit that provides services for and advocates on behalf of independent workers primarily in Silicon Alley. Working Today offers a medical plan priced at a discount to members of a consortium of professional groups, including the World Wide Web Artists' Consortium, Webgrrls International, the Graphic Artists Guild, and the Newspaper Guild. Working Today has built partnerships with an insurance carrier and a hospital group, and has received support from the Ford Foundation and a grant from the New York Community Trust. After the network is in place, Working Today intends to offer a broad range of other services, such as training and lifelong learning.

Another thing you could do, as a citizen, is support legislative changes to make our political and regulatory environment more hospitable to mobile workers. The current tax code discriminates against independent contractors. One example is health insurance, which is automatically a pretax benefit for most employees. Not so for contractors. It seems to me that the public interest should be in making the playing field as level as possible. The government and our society should be neutral with respect to how work is organized.

Jill Rosenfeld (jrosenfeld@fastcompany.com) is a Fast Company senior writer. Contact Thomas Malone by email (malone@mit.edu).

Sidebar: Are Guilds the Future of Unions?

According to MIT research associate Robert Laubacher, we are undergoing an economic shift that is as transformational as the Industrial Revolution -- and our social-support structures need to evolve as radically now as they did then.

"We forget that the current labor structure has only been in place solidly since the end of World War II and that the struggle over the labor structure dominated national debate and politics in the late 19th century and the early 20th century," says the 44-year-old Laubacher. "There were bitter, violent fights over child labor, the eight-hour workday, and other basic working conditions. The New Deal, with its legislation that compelled employers to recognize elected unions, was a great achievement. The labor shortage during World War II locked the structure in place: Negotiations between leading corporations and unions set standards that were followed in both union and nonunion sectors. That safety net began to unravel in the 1970s, 1980s, and 1990s, as deregulation and new technologies created more competition, less stability, and less predictability. The economy is now moving faster than ever before."

So does that spell the end of organized labor? "I wouldn't say that unions are obsolete," Laubacher says. "I'd say that unions need to evolve to meet the new reality. Collective bargaining works well when industries are stable. But when firms reconfigure and skills are obsolete every few years, who do you bargain with, and over what? Work is getting done in a new way, and we have to come up with structures that are economically viable and flexible enough to accommodate the current mode of production."

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