July 2018.

I wrote this article in July 2018. It was an article expressing my concerns about transferring the risks of employment from the employer to the employee. A term I called waterfalling.

Almost two years later with the advent of the COVID-19 the consequence expressed in this article could not be more relevant.

Let’s waterfall that.

I want you to imagine you are in a meeting about how your business can reduce costs and one person says ‘Let’s waterfall ‘. You have never heard the term before, so you look to the person who used the term and asks them to explain.

What is Waterfalling?

There is an uncomfortable moment where people glance between each other because they don’t want to specifically articulate what waterfalling is. That is because it is when business actively transfers the risk of employment from the business to the employee. It is unofficially called waterfalling because the risk falls from the top to the bottom.

This is how waterfalling was explained to me by an acquaintance of mine’s son who works in big business. He went on to explain that this new term had evolved from other terms like outsourcing and off shoring.

Activities identified in Waterfalling.

Although like me you may not have heard the term before, you will be familiar with the activities. They include, changing employment conditions where people are employed on a casual basis rather than in permanent positions.

Today more than two million Australians are casuals and according to Independent Contractors Australia, we also have two million independent contractors and that number, like casuals and part time work is rising.

Combine the increasing trends of outsourcing employment to labour hire companies in Australia and overseas and waterfalling becomes financially relevant to many family budgets.

The Gig Economy

Then enters the gig economy where waterfalling is in freefall. Companies like Uber almost overnight, changed the employment landscape and moved all their employment risk by insisting people were self-employed.

By combining the rise in casuals, independent contractors, labour hire companies, outsourcing and the gig economy we realise that the result for many everyday Australians is employment insecurity. Many of us are tumbling over the waterfall, some with or without life jackets while others float at the top.

It is happening so fast, with little public debate and without meaningful data; few of us understand the impact that transferring this amount of risk may have on our families.

Current working environment for families.

Currently many families have at least one person employed full time in secure work. This can assist other family members to have a choice over the type of employment they may wish to have. They can risk reducing hours, taking leave to start a business or be a consultant because they have a secure base. Fantastic.

Other families do not have that luxury. They have to make adjustments like accepting casual work that is really permanent or accepting static wages and substandard working conditions not to jeopardise their current employment. They don’t have a secure base which often limits their choice. This isn’t fantastic.

Financial risks

If businesses continue to push financial risks onto families, by changing working conditions more families may find themselves in insecure working arrangements, struggling under the pounding financial and emotional pressures at the bottom of the waterfall.

As we all know those pressures are being compounded by new forms of financial commitments. Modern households have university debts, locked in contracts for services like internet, phone, streaming services and utility usage. We just can’t take the phone off the hook anymore.

Waterfalling and innovation

Waterfalling is being imposed on many of our families whether we like it or not. It has even been named by some. We must understand the implications. To do this we need data on how many, and at what rates, families are entering insecure employment. We must also understand the impact these financial and emotional pressures may have, so constructive public debates are had, and relevant government policies are created.

If insurance companies can do it so can governments. This industry is capitalising on the fact that insecure employment is a growing trend. One innovative product category is income protection products for independent contractors. This may provide a life jacket however understanding how many families are sacrificing long term superannuation contributions, for short term insurance cover is important in the waterfalling debate.

Relevant data.

Collecting relevant data is critical. We cannot rely on statistics of low unemployment rates touted as measures of success, to drown out the impact of waterfalling. In America working adults said they either would not be able to cover an unexpected $400 expense through savings or their credit card or would have to cover it by selling something or borrowing money.” (Chapter 1 Edge of Chaos).

This data smacks us in the face. Waterfalling now has a name. Its powerful imagery of families tumbling over the waterfall may encourage more of us to demand relevant data, enter the public debate and actively influence government policies. It is worth the effort because our families have a lot to gain and arguably a lot to lose.


COVID-19 April 2020.

A lot has been lost

In America 26 million people are unemployed since the pandemic. Predominately they are insecure workers who have no benefits, no money and few prospects of work in the near future. They are living on the edge of chaos with minimal government support.

In Australia according to Roy Morgan an extra 1.4 million Australians are out of work in the wake of COVID-19 pandemic – 3.92 million (27.4% of workforce) now unemployed or under-employed. Many of these employees have worked in the insecure economy.



A lot could be regained.

Many people are talking about how we can use this crisis to reset the values and aspirations of our country.

If this is a possibility, then the question we may need to ask is do we want to continue building an economy based on one third of our workforce being in insecure work? If not, then maybe the new rhetoric should be… let’s not waterfall that….