Chrono.tech was originally focused on making breakthroughs in labour organisation and payment processes. While changes occurred gradually in 2017–2019, this year has seen rapid acceleration.
Experts, investors and businesspeople are swift to attribute almost everything to the global coronavirus pandemic. As always, however, the reality is more complicated than the simplified version broadcast by the mainstream media.
Almost everybody is convinced that the current upheavals in the financial markets, including real estate, stocks and bonds, as well as grassroots economic problems, have been caused exclusively by the coronavirus pandemic. However, a closer look at social and economic trends and events provides a more nuanced picture.
We are dealing not only with a pandemic, but with several overlapping crises. These include a cyclical business crisis in which supply exceeds demand, and a bubble in every investment market, from gold and coffee to stocks and oil. These two somewhat independent crises have been amplified by the global pandemic. And while these crises may have been inevitable, the wildfire-like coronavirus pandemic has caught everyone off-guard.
One of the standard measures used to fight the pandemic across the world is social distancing — including reorganisation of businesses to enable employees to work from home. Almost all leading media outlets have described in detail the dynamics and scale of the transition to remote work in different countries and economic sectors. Since our team has been dealing with this topic for a while, we may grasp important features and details that elude more recent observers.
The main point is that this is not just a transition from office-based to remote employment. It is hugely significant that this transition is taking place at the beginning of the financial and economic crisis. What are the implications of this?
Businesses are now faced with increasing difficulties associated with the sale of their products and services. Whereas previously the transition to remote employment could place in more comfortable economic conditions, the mandatory spread of remote employment is now occurring in the context of an ever-deepening demand crisis. This is a critical factor that employers will inevitably take into account, and to which employees will have to adapt.
Having considered the situation in detail, we can distinguish three main problems:
- First, there is a forced shift to remote employment in almost every country for the vast majority of jobs that offer even the slightest opportunity to work remotely.
- Secondly, the transition is taking place against the backdrop of a full-scale financial and economic crisis that could last for much longer than the pandemic itself. China provides an example of this. According to recent statistics, the coronavirus pandemic is likely to have reached its peak, but a large-scale business crisis involving restrictions on demand and breaks in supply chains has just begun.
- Thirdly, the crisis has already led to strong and unpredictable volatility of certain national currencies, including for Russia and Mexico, as has previously been the case for Venezuela. Under these conditions, citizens not only find themselves in a position of long-term unemployment, but also with limited prospects of permanent employment. It is clear that employers will not want to — and may be unable to — protect their long-term employees. They will likely prioritise those who are key to the survival of the business.
Switching to remote work during the crisis is very likely to lead to a fundamental change in employment models. The standard employment model for developed countries was based on well-protected legal, long-term contracts between employer and employee. With the uncertainty associated with the coronavirus overlaid on the unfolding financial and economic crisis, employers will seek to move away from long-term to project-based employment where possible. In the new environment, a responsible employer will simply not be able to guarantee long-term employment. Project-based remote employment will become an increasingly popular and widespread type of relationship between employers and employees.
New models of remuneration
Thus the new and central problem in this context of an economic crisis multiplied by a pandemic is to provide employers and employees with a new model of labour provision and remuneration.
Not only should the new model offer simple conditions for organisation and remuneration for labour, understandable to employers and employees alike: it must provide a means of agreeing these terms, and (most importantly) a mechanism for guaranteeing these for both parties. In other words, the central element of the new system of work organisation and payment is the presence of a third party that guarantees for employee and employer all the conditions and obligations stipulated in the project contract for remote work. This task can be addressed through trustless and automatically-executed smart contracts
Finally, there will be workers from countries with unstable national currencies, subject to high rates of volatility, who are employed remotely by legal entities in other countries. It is important that they can enjoy arrangements for remuneration in a strong currency, as well as in line with the hours they work and their qualifications.
Three years ago, the Chrono.tech team formulated the priority of implementing a platform for remote project employment, including in conditions of high inflation or currency volatility, for various forms of work and sectors.
The LaborX platform is now in its final pre-launch phase. In a few weeks, employers and employees from anywhere in the world will be able to implement the most effective — and in many cases only — socially and economically justified form of labour organisation and remuneration, using our platform.