In 1940, the 40-hour workweek became US law. This law was passed to regulate the length of the working day preventing excesses and abuses. This has constituted the formal classical employer-employee relationship for centuries. Nowadays, with the varying market demand and with the amounts of uncertainties businesses have to forecast demand, the need arose for a more flexible model for businesses to bring in needed capacities. This triggered the on-demand hourly basis model that enables businesses to hire just-enough capacities based on the need removing all opportunities for organizational slack.
In essence, hourly based employees are, unlike salaried employees who are paid a flat salary regardless of how many hours worked, paid an hourly wage for each hour worked. Hourly workers may often be found in service and manufacturing occupations, but are common across a variety of fields.
At Saudi Arabia, this model is offering jobs to thousands of Saudis at their early career, which equip them with the needed skills for the market. Retail, food and beverage, events, and every business that suffer demand fluctuating due to seasonality need flexible supply of work force to meet this fluctuated demand. Flexible work model helps businesses to reduce their cost by increasing utilization, and to generate more sales by increasing their capacity.
Tackling the concept from the employee side, with the rise of gig economy we found that more people prefer to work on their own schedule instead of sticking to normal day job. They do it to complement their income, gain more experience, and to make a better use of their time.
Governments also come into the picture. This new trend encouraged governments, corporate, investors, and entrepreneurs to look for new solutions which gave birth to many startups in different domains in gig economy and on demand economy.
“The gig economy workforce is currently growing three times faster than the traditional U.S. workforce, and businesses should not expect this trend to slow down anytime soon. By 2027, half of U.S. workers are expected to be freelancers.”
If you are interested, here is nice article by Mckinsey&Co about the future of work.
The model will help to create job opportunities for individuals of both genders and help people who are looking to increase their income. Also, it can guarantee all employees rights throughout a flexible contractual regulation, in which the employees get paid on an hourly basis. It aims at enhancing the economic participation of all segments of the society, and making the work environment more open to new entrepreneurial opportunities.
So, what are the rising use cases for hourly work?
As for those workers who join the university to complete their studies, hourly work is considered a lifeline for them to be able to balance work and study requirements, so they allocate certain hours to each, without failing any of them.
Hourly work also comes in favor of woman, who may find herself surrounded by a lot of responsibilities that prevent her to catch up with her passion for career and to fully realize herself, by enabling her to work according to a schedule with a certain number of hours that guarantees her a balance between her private life and work.
That said, we still have to mention that this new work paradigm lacks regulations and governance to ensure the intended efficiency to be delivered. Otherwise, we will see a truck going 20-40 kilometers per hour under the speed limit because the driver is being paid hourly and not per job!!!