In today’s rapidly changing business environment, companies that rely solely on full-time employees are finding they have neither the skills nor the agility to sustain success. For instance, 40 percent of U.S. companies can’t fill their open positions, according to a McKinsey Global Institute study that found that analytical, engineering, and management roles are the hardest to fill.
With those gaps, companies must now focus less on the fixed supply of in-house people and more on the capabilities they need to get work done. And a pool of independent and highly skilled workers who can fill those needs is growing. Economists Lawrence Katz and Alan Krueger found that American workers in alternative work arrangements, including temp workers, increased by 9.4 million from 2005 to 2015, a 67 percent jump.
Many of these independent professionals are increasingly being engaged to do strategic, high-value-add work requiring deep expertise. They can be called upon to staff high-level projects that were previously too expensive to hire employees to work on full time. These are workers who often want more flexibility for themselves than traditional employees in a corporate setting.
Companies that are able to easily access and manage these workers will be able to unleash fresh energy and thinking inside their organizations, and quickly meet staffing needs when new opportunities arise. Flexible talent-access platforms are enabling many of these companies, making it easier than ever before to bring in the right skills for the right project at the right time.
But making the most of flexible talent-access platforms is not as simple as adding a solution into an existing organization. Old ways of thinking and working designed to support an internal-only workforce need to change. Winning in the future will require a rigorous approach to accessing and managing independent workers.
To fully enable a new vision of the future, organizations must make changes in five key business areas:
Planning and Budgeting If organizations have easy access to—and indeed rely on—external talent, they can tackle new opportunities, experiment more nimbly, and operate in new areas. Companies therefore need to adapt their various processes—strategy, budgeting, talent—to this reality. They should employ objective-based planning and start by prioritizing the work that needs to get done separately from whether it’s executed by a full-time employee or external talent. Companies should adjust budgeting so that managers are focused on the best ways to meet their objectives and not given implicit or explicit incentives to increase full-time head count.
Procurement and legal should be prepared to promote these new policies and procedures through open communication channels—becoming champions of adoption benefits to business stakeholders.
Human Resources HR will play a leading role in driving this shift. Organizations should focus more on defining capabilities and enabling access to the skills they need, and focus less on where internal people sit or finding the perfect person for an internal role. Freed from old assumptions, companies will orient their talent strategies around determining the right mix of internal and external capabilities. Talent acquisition functions should rebrand themselves around “talent access.”
Training Managers will need the ability to contract with, pay, and manage far-flung but integrated virtual networks of individual contributors they can no longer “manage by walking around.” Managers should be trained on managing scope, launching teams, and providing feedback and coaching to individuals they do not formally control. Individual contributors should be able to quickly form relationships and facilitate teamwork among project staff who have never worked together before.
Organizations that focus on systematically moving to this new world of work will see its benefits more quickly than those that move in this direction piecemeal or in response to competitive pressures. A purposeful “future of work” initiative that incorporates the above best practices should have the following components:
- Stakeholder Buy-in Engage employees in a discussion about the intent to work in a new way, including why it makes sense for the organization—the value the company expects to derive—and what these new ways of working will mean both operationally and behaviorally.
- Adaptable Processes Identify and modify key business processes, policies, and procedures to align with the new ways of operating. This needs to be a serious initiative to ensure that the organization supports rather than hinders the overall effort.
- Platform Adoption Identify and implement an appropriate technology solution to support the identification, sourcing, and management of independent labor.
- Change Documentation Develop and implement a standard set of training modules on key skills-based aspects of the new way of working.
- Testing and Learning Identify—and actively communicate and learn from—short-term wins.
- Benchmarks for Success Measure progress toward the goal. For example, companies can examine how much work external talent does, how key business processes have changed, and changes in the behaviors of people as they plan for work and deliver on their objectives.
Ultimately, the new world of work requires executives to completely revise their relationship with talent. For those companies that navigate this transformation, the payoff will be substantial—not just in terms of new growth opportunities, but also in terms of new efficiencies. They will be able to think more broadly about the business, and they will be exposed to best practices and ideas from people who have thought about tough problems in different contexts. They will be free to move into new areas of the world that they otherwise couldn’t have considered. As a result, they will enjoy more flexibility and a greater number of strategic options. With the right approach and leadership, the world of on-demand talent promises to bring these aspirations much closer to reality.
To learn more about the flexible workforce, download the June 2017 commissioned study Address Critical Skill Gaps With On-Demand Knowledge conducted by Forrester Consulting on behalf of Catalant Technologies.