Selling Time: The Paradigm Shift Blowing up the 9-5
Every once in a great while we come along a truly disruptive force that compels us to undergo a paradigm shift. In this interconnected age, we must grapple with our antiquated notions of how best to utilize our most finite resource: time. The changing workforce of today demands that we reassess the time for money compensation model, and focus instead on a value added approach.
As experts all across the country clamor for a reimagining of K-12 school hours, another reform movement has been largely ignored: the attack on the time clock. Nonetheless, it is underway and growing in support. These reformers have demanded that we reimagine the standard 9-5 job as the norm for employees, as research has gradually mounted suggesting the 40-hour workweek has become obsolete.
The logic here is rather simple: people are not utility maximizing. One of two things tends to happen at the soul crushing, lethargy inducing, inefficiency causing 9-5: either we get burned out and waste time, or we lower productivity to match our shift’s time constraint. Humans aren’t hardwired to withstand too many consecutive hours of the same task. Eventually, they just shut down. Even the realization of hours ahead can force our brains into a work-induced coma. So you know that joke about the guy checking his Fantasy Football league in the office? Or the one about the slacking office worker logging onto Netflix or Facebook? Those aren’t the exceptions, but rather the norm. In addition to these quick burnout times, workers also milk the time clock. There are only so many projects that can be carried at any one time. For many, the need to continue putting on the appearance of productivity ends in a stretching of simple projects over a longer time than is needed. That is, workers tend to move slowly so as to not have to resort to their time wasting tactics.
This has led many to suggest that what the US work culture needs most is a nice shot in the arm, a 30-hour workweek. The benefits are many, provided this model fits your company. It could help the environment, as employees aren’t commuting as much, which would reduce emissions. It could help reduce stress and mental problems, as workers would have more time to rest and recharge, creating a happier workforce. It could increase long run productivity as workers leverage added time to learn new skills.
These benefits are nothing more than possibilities at this point. But what does seem to be clear is that cutting down the 40 hour workweek would provide a “more for less” benefit. It’s a win for the company, which sees productivity rise, and the employee, who adds leisure time. Opponents have sounded the alarm about falling income. Workers spending more time in bed watching Game of Thrones reruns and less time in their cubicles crunching numbers and sending emails should reduce income at a time when worker wages have been stagnate. Supporters seem to suggest the solution to this is simple. Employers could offset the loss of labor hours by raising wages to match the level of productivity. They would have an incentive to do so because their money is seeing greater return.
Apply the brakes. This all sounds nice. But my first reaction was that this is akin to plugging a hole in a sinking ship. If the point is to raise wages to match productivity, why worry about selling time at all? Why not just pay for productivity, irrespective of time put in?
What I’m suggesting is that the old paradigm of trading time for money—the wage system—is growing obsolete, not the 40-hour work week itself necessarily. What we should be focusing on instead is compensation for value added services. What I mean by this is getting paid for results and perceived value. For example, take the case of a business consultant. Rather than selling his time at a rate—say, $75 per hour— he could charge a fixed fee, provided he lands the business a key investor. If he manages to connect them to the investor, and gains them the funding they need to expand operations, he profits. The consultant spends his work career tirelessly building connections for exactly an opportunity like this. At a stage in his career, he can accomplish this feet in practically no time. Thus, the time he has spent in the past is compounding to make him more money in the future. He has unlocked his potential by shifting from a wage model to a value model that prides past accomplishments, perceived value, expected returns, and tangible, quantifiable results.
Wage systems come with a number of disadvantages that sap the excitement out of work life, cap potential, and produce neurotic, unhappy employees. Freedom is the prime benefit of a value added model. Rather than be delegated a number of tasks to fill your day, you decide what is worth your efforts. Gradually, people tend to find a flow. They become comfortable with what they are naturally good at, what interests them, and what provides them the best living. Additionally, as workers are freed from the orthodoxy and stricture of a prescribed set of tasks, they become more skilled in their particular niche. This enables companies to reap greater rewards from their labor. Finally, selling time for money caps potential income. Your wage is based on the market supply and demand for labor. Similar people with similar skills in similar fields will in large part shape your compensation structure. Firms are profit maximizing, and want to generate as much from you as possible. The value added model lets you escape the labor market and consider your work as capital to be sold instead. If you provide good value, you get compensated on the benefit to the firm. This is all based on perceived value, which you have the power to raise over time through consistent results.
It takes years to build a reliable reputation and truly unlock your earning potential. However, compensation for value allows a feedback loop between you and your customer. You gradually adapt, learn, and improve, coming to understand how best to provide for the people who pay you. There becomes a symbiosis between you and the customer (employer if you will) that does not exist in the impersonal wage model. This and the freedom from the old, rigid time clock unlocks potential and progressively sorts workers into more productive niches.
This is a challenge to each of you. The value model is not for everyone. However, take time to consider if it is right for you as an employee or right for your business. We can begin the move away from the slow, dull slog that is working in the 9-5.