The Modern Employment Relationship: One Foot Outside
By David Creelman
Look at people’s titles in LinkedIn and, surprisingly often, you run across situations like this:
• Director of Product Marketing, XYZ Company
• President, ABC Consulting
How can one person have a management job at one company, while simultaneously being president of a different one? In most cases the person had been running their own small company when offered a new job; unwilling to abandon their old company they strike a deal allowing them to keep the old company alive while devoting the bulk of their efforts to their new job.
One reason to keep the old company alive is that there may be a certain amount of on-going work that the person feels committed to do. That reason does not hold when someone moves from one regular company to another and they can leave the work with someone else. When it is your own company, dropping work means dropping something you personally committed to doing.
A more interesting reason is that the personal business offers a safety net. One never knows if a new job will work out; keeping the personal business alive provides an exit strategy. That safety net can be very important and allowing the person to keep it may be the only way to get them to accept the job.
Once upon a time, and probably still in many parts of the world, this kind of split loyalty would be unacceptable to a company. However, in the US and Canada many companies have accepted that since they do not offer much loyalty to the employee, they cannot expect the employee to offer 100% loyalty to them either.
Consultants with many cards
You see a related example of one individual with multiple titles when you meet independent consultants. Ask for their card and they may pull out three or four ones with different affiliations. Someone may be a personal coach, a trainer at a small consultancy, and a partner in some other venture. The consultant is probably not an employee of any of the companies you see on their business cards; in most cases there is not even a formal contract, however they have made a loose agreement to collaborate.
Our simple model of one person in one job no longer always fits the reality of how people make their living. Many small consultants need to keep their options open and having a variety of hats allows them to pull in work from a variety of sources.
The modern employment relationship
At one time, the traditional employment relationship was straightforward. You worked for one company, and for as long as you worked for them you did not do other paid work. Now that boundary can be more easily broached. One might think of our John Doe, simultaneously Director of Product Manager and President of a consulting firm as, fundamentally, a free agent taking on various projects. Being the Director of Product Marketing for XYZ Inc. simply happens to be a particularly big project. Frame the issue this way and XYZ is more a client of Mr Doe than his employer.
This relationship will have its tensions. A Director level job in many organizations is meant to be an all-consuming commitment. An organization may not mind if the employee keeps the other organization alive on paper, however if it starts drawing attention away from their regular job there could be trouble. On other hand, the person’s own little company may be a sufficiently valuable asset, even if only as a safety net, that they will fight to keep it alive. The employment relationship becomes a matter of compromise and, as always, relative negotiating power. An employer would always rather the employee cut any old ties, however if they need that person’s skill set then cutting a special deal may make sense.
Dr Denise Rousseau at Carnegie-Mellon has done extensive research on idiosyncratic deals (“iDeals”) where employers set up a special deal with an employee—such as letting them remain president of their old firm. The evidence suggests the iDeals work well. We can see the proliferation of people with multiple titles as a validation of the concept of iDeals.
What it means for HR
Many HR functions lean towards rules, standards and compliance. HR may not like the view of employees as being fundamentally free agents treating their job as a ‘gig’ and not a career. HR may not like iDeals with all the legitimate concerns about fairness and administrative complexity. However the world of work is now sufficiently fluid and uncertain that talented people want these flexible deals. Organizations will do well to consider what kind of flexibility they can offer and what boundaries they must keep in place. It will not be a matter of putting specific rules in some employee handbook. Rather it will be creating a process so that an individual situation can be looked at on its own merits.
The world was tidier when we had clear categories of employees, temporary workers and consultants. Now that all jobs are temporary, and professionals move back and forth between being employees and independent consultants, we have to accept that those neat old categories will not work. The good news is that, in practice, all these strange dual jobs generally work out; the consultant with three or four cards has no trouble balancing the roles. The flexible employment relationship works, so we should embrace it.
David Creelman is CEO of Creelman Research, providing writing, research and speaking on human-capital management. He works with a variety of academics, think tanks, consultancies and HR vendors in Canada, the U.S., Japan, Europe and China. Mr. Creelman can be reached at email@example.com.