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The nature of work is changing, and companies that don’t adapt the way they find and utilize talent will be left in the dust. That’s a scary proposition for many firms that either prefer the traditional, full-time workers with 30-year careers model or have made little progress toward a plan to manage non-traditional workers. As robots, machine learning, and other types of automation eliminate the need for human intervention in many routine and low-skill tasks, identifying and capturing specialized skills have created the new frontier of competition within every industry.
When it comes to workforce management resources, size definitely does matter. Large enterprises simply have more money, more mature internal processes, and more connections to expertise than smaller companies. Bigger firms possess the capital to invest and infrastructure to support VMS workflows and the time horizon for these investments to pay off. Mid-sized organizations, on the other hand, generally have been forced to treat contingent workforce issues on a case-by-case or ad hoc basis. Limited staff, less-mature processes, and cash-flow constraints constrain smaller businesses into transactional, rather than strategic, management of their full-time and non-traditional talent. Often occupied with putting out skills-acquisition brush fires, mid-market firms have little time with which to build platforms or engage the outside know-how they need to streamline their talent workflow. They likely have implemented a contingent workforce policy and understand the cost-savings and flexibility advantages to be gained by utilizing statement-of-work contractors, freelancers, and other external workers, but they lack the inputs for integrating the processes of finding, recruiting, working with, and paying them.
Organizations’ first experiences with the contingent workforce often come incrementally. They hire some seasonal sales reps or inventory help. A few months later they work with a graphics consultant on an event logo. Then the next year maybe they contract with a freelance writer for a drip marketing campaign. Before they know it, what started as a few isolated transactions undertaken to capitalize on a special opportunity or overcome an unfamiliar challenge evolves into a major component of the firms’ go-to-market approach.
No matter where we are in the economic cycle, the competition for the best talent rages on. Much like the war for customers, companies must leverage their brand positioning to attract, recruit, onboard, and retain people with the skills they need in order to remain successful. Companies have long understood this concept, of course, creating a corporate persona that projects stability, industry leadership, and other characteristics that employees value. But today’s productive teams include more than just full-time employees. To obtain the mix of abilities required to meet customer needs and adroitly implement projects, companies seek to tap into all the labor resources available to them. Statement-of-work workflow consultants, freelance writers, independently contracted accountants, seasonal sales representatives, and other contingent workers increasingly are adding their talents to work teams.
The face of the world’s workforce is changing. As Baby Boomers retire, many seek to put their extensive knowledge and skills to work as freelancers or independent contractors (ICs). At the same time, Millennials and Post-Millennials are seeking different rewards than those associated with full-time careers. There is no question that in order to thrive, companies must embrace this new reality by exploiting the talent available and the cost benefits these contingent workers offer. There is no way organizations can flourish for long without using a significant number of 1099 workers to augment their full-time staff.
With crucial skills available through a variety of platforms, sources, and structures, companies intent upon building a strategic workforce must consider optimizing their use of full-time employees as well as consultants, contractors, freelancers, and other contingent workers. As creating a best-in-class workforce management plan can establish sustainable competitive advantage, finding, hiring, training, paying, and managing contingent workers is rapidly becoming mission critical for many firms. Adequately accounting for the risks, costs, and quality issues involved in using external workers will be one of the most important management concerns as the use of non-traditional workers inexorably rolls on.
Attracting and empaneling people of diverse experiences in positions of authority and proficiency galvanizes the workplace and promotes free exchange of ideas. Collaboration among teammates possessing complementary skillsets and distinct backgrounds expands companies’ ability to respond to and profit from supply, demand, marketing, partnership, and value chain opportunities when they arise. More importantly, a workforce that reflects the public’s varied viewpoints, historical foundations, values, and talents is prepared to answer any social or cultural challenge that may arise within the company or the community in general. As the University of Florida notes, inclusive workforces that feature people of many races, genders, ethnicities, and philosophies “adds cultural insight and intellectual richness to the institution, enhancing its vitality, effectiveness and reputation.”
U.S. companies continue to focus strategic in-house resources on value-adding and competitive advantage activities and outsource more and more services such as supply chain and payroll. In fact, experts estimate American companies spend nearly $2 billion on outsourced services. With competition as fierce as ever, firms must institute tight controls to ensure they get their money’s worth from managed service providers (MSPs) and other vendors.
Seeking to control procurement costs and improve vendor performance, employers often look to statement of work (SOW) labor suppliers to help staff specific projects. SOW is becoming more attractive because it allows companies to accurately forecast costs associated with particular outcomes rather than estimating the time and materials required and factoring in everything that could influence scheduling, productivity, inputs, etc. As a comprehensive, integrated solution for a variety of industries and tasks, SOW demands management expertise that companies often choose to outsource to external workforce providers.
The successful companies of tomorrow will be those that can adapt to the shifting work environment paradigm. Today’s workers increasingly are rejecting the notion that the American Dream includes moving up the company ranks throughout a 35-year career. Instead, more and more workers have decided that their most rewarding career is more about flexibility, new challenges, and contributing to tangible work outcomes, and less about job titles and full-time status. As a result, workers are becoming more specialized, independent, mobile, collaborative, and digitally connected.