What if everything we need to know to create the conditions for increased job mobility could be gleaned from the career of the ultimate free agent, LeBron James?
We now know that the basketball superstar has chosen to take his talents elsewhere, leaving the Cleveland Cavaliers to join the Los Angeles Lakers on the first day of NBA free agency. In choosing to join a new team for the third time in 15 years, LeBron is supported by three conditions that today’s economy lacks, and a more mobile one will need: downside protection, upside visibility and exchange value.
Downside protection
James is one of three NBA players whose contract includes a “no-trade clause.” So long as this clause is present, he cannot be traded from his current team to another team without his permission. Therefore, James controls his own fate. His next gig will always be playing for the team, and in the market, of his choice, ultimately removing risk and uncertainty from his future. It gives him the ultimate downside protection.
In contrast, many workers today have few of the basic protections needed to limit downside risk. James doesn’t have to worry about emergency savings and continuous health insurance like many American workers do. The absence of these protections increases risk and uncertainty while reducing the ability of people to tap into the market for new work.
Upside visibility
Armed with his no-trade clause, James surveyed the market of 30 NBA teams and ultimately chose the Lakers. His decision benefits from unparalleled market transparency. He knows the win-loss record for every team in the NBA, so he can decide where he can best win a championship. He knows the budget for every team, so he can forecast where he stands to make the maximum financial contract. He knows the management and coaching philosophy of every franchise, so he can decide if the culture and style of play are right for him. Since he operates in a league with massive transparency, James has the ultimate upside visibility.
In comparison, most American workers have very little capacity to scan the market for upside visibility. There’s no equivalent of employer win-loss records, budgets, and organizational culture in anything more than fragmented, incomplete, and subjective data across job boards and job sites. The inner workings of the market that are so readily available to James are often opaque to long-tenured employees of a single firm, let alone workers vying to take their talents to new places. A dynamic economy where individuals can find the right market for their skills will demand true upside visibility—with new, industrywide levels of transparency, standardization, and accessibility.
Exchange value
With total downside protection and complete upside visibility, one barrier remained between James and destination LA: the negotiation. Here, the unique nature of the NBA provides James with unparalleled power in navigating the market.
Since he entered the NBA 15 years ago, James’ every move in every game has been captured. His impact can be measured across each season of his career. The same holds true for all other players, of course, which enables models to be built to quantify James’ impact on any given team’s win-loss record. This gives him tremendous negotiating power, while at the same time giving those teams competing for his talents a full sense of the value he brings. Because he has a stat sheet dating back to the first time he stepped on the court, free agent James has the ultimate understanding of his exchange value.
While many workers today are given ratings and reviews, they are nowhere near as transparent or objective—and the ability to translate those ratings and reviews into employee impact are limited at best. Employee performance reviews and freelancer ratings on platforms like Yelp, Etsy, and Upwork can help, but what people really need is a set of facts tied to themselves, not to institutions and platforms. Unlike James’ stats, which are publicly available and completely standardized, reviews on platform sites and within firms are neither standardized nor portable, ultimately limiting their use as measures of exchange value, and inhibiting economic mobility.
Downside protection, upside visibility, and exchange value are the building blocks of job mobility. For a high-functioning talent marketplace to emerge, these factors must reside with the individual worker. We have an opportunity and responsibility, no matter the industry, to find ways to meet each of these needs in order to contribute to the growth and vibrancy of the market for human capital. After all, it’s only when all workers have the momentum of the ultimate free agent behind them that we will have an ecosystem where talent can really thrive and flow anywhere.
Valla Vakili is the head of the Ventures Studio at Citi Ventures.