Clarion Communications

The numbers are in: as the business environment has become more difficult, senior management in many companies has had to take a very serious look at every possible cost-cutting exercise. In this environment, every facet of American business at large has come under cost reduction scrutiny. And as recent unemployment numbers show, the employee is not exempt from this investigation.

In many instances, management has found it difficult to justify the employee’s salary. In many organizations it is difficult, if not impossible, for a firm to assess the true value of a worker. As they have attempted to determine costs and consider cheaper alternatives, outsourcing work to independent contractors has become a viable option. Since it is difficult for a company to assess the real value of its employees, it never knows whether it is getting value for its money. Nor does the employee know if he is being paid his true market value. By forcing staff to compete as contractors against all other suppliers in the marketplace, then, the business firm is better able to gauge the value of the people it hires. And the workers gain by being able, first, to assess the value of their contribution by comparing with their competitors, and second, by being able to take on additional contracts.

The point being: although it can be difficult for those out of work in the short term, unemployment is not necessarily bad in the long run. Provided business entrepreneurs are not hindered from starting new businesses, they will soon begin to absorb the unemployed into new ventures. Armed with intimate knowledge of his field, someone out of a job could bid for work at his previous place of employment, offering to supply services at competitive market rates. In doing this, he will need to be able to convince the potential buyer that he can deliver the required service at competitive rates. By doing this in such a way as to add value to the service, he can usually reduce the overall cost to the client. And through this new position, what his former company could not see in him as an employee will be much more apparent in his new role as a supplier.

In essence, the worker is starting his own business. He becomes self-employed. No longer does he depend on a fixed salary, but instead lives on his abilities to supply a satisfactory product in the marketplace. He will be rewarded accordingly. And in most instances, provided he learns the necessary skills, he will do better in his own company than he would on a wage or salary. In the end, then, the currently unemployed may be in prime position for future financial success.

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