As a manager, building a team that gets the job done may be keeping you up at night. The pressure is on—move faster, cover new responsibilities, meet goals, the list goes on. You require specialized skills for a new project, but it’s tough to find quality training resources; not to mention your team doesn’t have the bandwidth as it is, and you’re already behind on your timeline. You posted an open role thinking that’d be the solution, but it’s gone unfilled for months. There are signs of burn-out and turnover on your team with no easy answers.
It’s a common management conundrum that leaves you feeling frustrated and anxious. And hiring hasn’t become any easier. In fact, 40% of U.S. companies can’t fill open positions according to a McKinsey report.
But in the midst of these challenges, there’s good news for you and your team. It’s called the flexible workforce, and it’s giving managers the much needed agility, productivity and expertise their teams need to be successful.
You’ve probably heard the buzz. Flexible models, on-demand talent, gig economy, independent workers, and maybe even embraced the trend by supplementing your team with the growing number of independent contractors out there.
But for you to feel confident at night that you’ve built a high-impact team, it’s time to go further. It’s time for a flexible workforce. A modern flexible workforce strategy can bring multiple high-impact benefits.
In this guide for managers, you’ll discover a path for transforming to a flexible workforce model.
Let's Start With the Data
As you assess moving to a new flexible workforce model or perhaps even introducing the concept to your colleagues, these industry trends offer a great perspective to jumpstart your thinking.
The bottom line—use of independent workers is growing. In fact, with the competition for talent increasing, it’s become an essential workforce strategy for success.
Harvard Business Review
“In today’s rapidly changing business environment, companies that rely solely on fulltime 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.”
Society for Human Resource Management
“The freelance workforce grew from 53 million in 2014 to 55 million in 2016, and those employees now represent 35 percent of the U.S. workforce, according to research from Upwork and Freelancer’s Union.”
“…The blended workforce is on the rise. In the past five years, the gig economy has become a major trend impacting the global workforce, and has created a new kind of diversity, with full-time permanent employees working side-by-side with freelancers. A study exploring the gig economy found that 93% of companies already identify the blended workforce as they’re seeing freelance workers teaming up with employees to work on projects together.”
Flexible Models Are on the Rise
The statistics show a clear trend. Use of the flexible workforce model is growing. But why? Flexible models offer the best resources for the job, the ability to move faster and fresh perspectives.
The Changing Nature of Work
Oxford Economics and SAP conducted surveys interviewing executives about workforce trends. When asked which of the following statements about employment were true for their company, this is how they responded:
*Independent contractors, part-timers, or temporary or leased employees
Guiding the Shift
A Traditional Model to a Talent-on-Demand Model
The traditional view of a staffing model includes identifying the responsibilities for a department and hiring a team to deliver on those responsibilities throughout the year. But there’s a challenge. As business needs change or new initiatives arise, new staffing needs emerge, which often require new skills or different experience levels. A team member may need training, employees may need to take on new responsibilities without having the qualifications, or the team may simply not be able to absorb a new initiative. In a traditional model, it’s not easy to adapt in these situations.
A flexible workforce strategy changes this dynamic with a new model—talent-on-demand. To supplement a team, managers build a pool of resources that can be called upon for different needs at different times.
- Agile, nimble team that supports changing needs
- Prepared for “now, new and unexpected”
- Shift from a fixed supply of employees to multiple resources
Big Manager Win
Expand the possibilities of what can be achieved.
“This was (and is) a new way to think about your workforce. Need to staff a drill ship quickly? Hire a contract recruiter with the expertise and industry connections, and then release her once the ship is ready to go. Need an interim executive while a 6-9 month search process plays out? Hire and then watch as productivity doesn’t dip and employees feel relief that there is someone giving direction. Need a SWAT team to conduct due diligence on a major acquisition so your regular staff stays peacefully unaware? Call in a contract M&A expert and team.”
On the surface, it might appear easy to shift to a flexible workforce model. The reality is that it requires a completely different way of thinking about, recruiting and managing a team.
In fact, executives were asked in a recent survey how they rate their company’s management of independent workers.
The response—53% indicated weak capabilities with gig resources.
Companies are struggling to find and manage gig workers.
“More than half of surveyed global business leaders (53 percent) report weak capabilities in relation to gig and talent economy resources, and only 8 percent rate their companies’ ability to manage crowdsourcing as excellent.”
Time for a Different Approach
Flexible Workforce Models - A Guide to a Comprehensive Strategy
What's behind the challenges in managing contractor resources? And how can managers experience the full benefits of this highly productive approach?
Let’s take this fast-growing approach back to basics—identifying needs, defining goals, determining the best model for the team and creating the infrastructure to support it all.
There are 5 steps to take in transforming to a talent-on-demand model.
- Identify your needs
- Find the right independent workers
- Create an infrastructure to fire up success
- Partner with HR
- Monitor your transformation
Step 1: Identify Your Needs
A well thought-out, flexible workforce strategy takes into consideration internal business needs and the current employment landscape. Given the growing gig economy, many managers have been taking a fresh look at their teams. What’s the right mix? Some positions are best suited for a direct hire, but others can be outsourced to support projects as needed.
It’s a great exercise to regularly evaluate the right blend of internal hires, consultants and outsourced business solutions for your organization’s changing needs. Getting an outside perspective of a talent consultant can offer new ideas, tips and even connections to find what you need.
This series of questions can help you structure your workforce planning:
- What business needs will I have to support in the next 1-3 years?
- Would these new needs benefit from new perspectives or deeper experience?
- What skills will need to be in place that do not exist today?
- How are they different from what my team has provided?
- What would best fill the need—a permanent employee or a contractor?
- Will projects be static throughout the year or evolving frequently?
Through exploring these questions, you can determine the best model for your team. Rob Biederman, co-founder and CEO of Catalant, recommends companies solve problems through the use of a flexible workforce. “Innovative companies ask themselves two key questions: What products or processes do we think the marketplace will want next? What talent do we need to deliver that?
Once the skill sets for those roles are identified, forward-thinking companies can utilize on-demand platforms to locate the talent they need without delaying their timelines or breaking the bank. They can add members to their team for a specific project or to meet cyclical needs, and they can scale up or down, depending on the impact of the task.
The key, of course, is for business leaders to understand their skill gaps—and be willing to address them differently than they have in the past. Those are the companies that will reap the benefits of a flexible workforce and ultimately thrive in the future of work.”
HOT TIP: Consider a talent consultant experienced in creating a flexible workforce model. They know what works and what doesn’t from working with other companies.
Step 2: Find the Right Independent Workers
Once you’ve outlined the best flexible model for your team, it’s time to find specialized contractors for your specific projects, needs and timeframes. Since you’ll need to recruit for different types of talent, you’ll need a broader talent acquisition approach that takes into account how the modern independent workforce operates and what motivates them.
“Broaden and expand sourcing channels: Open up talent pipelines to nontraditional sources. Think about how best to source and recruit for the many types of talent needed, both on and off the balance sheet, including full- and part-time employees, freelancers, gig workers, and crowds.”
Tip #1: Be open to industry transfers
LinkedIn’s 2016 US & Canada Talent Trends Reports shows that 70% of contractors who switched jobs moved to a different industry. That means many freelancers offer diverse experience and have exposure to solving problems in multiple ways. This fresh perspective transcends industries and can infuse much needed creativity into your team.
Tip #2: Consider a range of experience levels
According to the same LinkedIn report, 31% of contractors have been in their careers for four years or fewer and 27% for five to nine years. By working with multiple companies and industries, independent contractors often gain a wealth of experience in shorter timeframes. Your team benefits from a resource with deep exposure to the latest best practices.
Tip #3: Search outside of traditional hiring spots
When you lift geographic limits, there’s more opportunities to find great talent. Think outside of your geographic location, and consider if you’d be willing to let a contractor work partially or fully remotely. You gain a bigger pool of candidates by doing so. Plus, the competition for contractor talent may be less in cities where demand is less.
Tip #4: Appeal to what contractors want from their careers
As the gig economy continues to grow, so does the competition for freelancers. To get their attention and stand out from other companies, emphasize what motivates them in your job branding.
Among the 600 respondents to LinkedIn’s 2016 US & Canada Talent Trends survey who identified themselves as contractors, a desire for more challenging work (30%), career growth and advancement (26%), and finding a culture and work environment they enjoy (23%) were the leading causes cited. They also value being able to contribute to the organization: 40% of contractors look for the ability to make an impact when considering a new role.
Tip #5: Partner with an agency experienced in contingent recruiting and workforce management
As you shift to an on-demand talent model, the guidance of an agency with a fresh perspective plays an important role. You’ll benefit from their experience in working with other companies and avoid the pitfalls others have discovered. Plus, agencies often have a ready-to-go network of independent workers.
Step 3: Create an Infrastructure to Fire Up Success
As you change your team model and how you recruit, it’s also important to take a fresh look at how to shift from managing an internal-only workforce to a blended team of internal and external talent. Independent workers require a different structure to ensure success.
- Identify the capabilities to complete work vs. what’s available from the in-house team
- Define project objectives so contractor deliverables are clear
- Outline priorities to ensure internal and external teams focus on top projects
“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.
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.”
- Enable managers to contract, pay and manage networks of individual contributors
- Coach on managing scope and billable hours
- Train on providing feedback to individuals managers don’t “formally control”
Budgeting, Processes, Risk Management
- Set up new procurement, legal policies and procedures for a blended team
- At a minimum, address compensation, hiring, payroll, counseling and assignment
status for co-employment
- Incentivize accomplishing objectives vs. incentives for increasing or decreasing headcount
Managing Flexible Teams
- Set up communication tools for virtual meetings and shared drives for
- Facilitate relationships between internal and external team members
- Encourage teamwork among project staff who haven’t worked together
As you can see, there’s much more involved than collecting resumes and referrals. A flexible workforce requires a plan and infrastructure for success.
Recommended actions to get started in the right direction:
- Find a peer who recently went through a similar transition. What did they learn?
- Move faster and more confidently by working with a talent consultant experienced in these transitions. You’ll leap ahead by tapping into the benefits and pitfalls uncovered during their work with other companies.
Step 4: Partner With HR
While big wins exist in shifting to a talent-on-demand model, it’s also a huge organizational change. For that change to be successful, HR plays a significant role in working closely with different business areas to establish a structure for success.
With experience in matching a people strategy to organizational goals, the HR team is in a critical position to drive this change by collaborating closely with leaders and managers on key issues:
Capabilities definition. Talent strategy. Operational changes. Documentation of processes. Training. Benchmarks. Goals. Buy-in.
“Managing diverse groups of on-site and remote employees will be challenging in a world where the composition of teams changes rapidly as project-based contractors and temporary staff come and go. Managers must become nimble coordinators and better coaches to ensure that all tasks, wherever they occur, mesh smoothly and that information is shared effectively among colleagues. Group interactions, in particular, will require more careful planning and structuring.”
Most importantly, HR plays an important role in setting up flexible workforce models as a serious initiative to support the growth and success of the organization. Having a structured, deliberate program makes a significant difference.
The Harvard Business Review article, How to Think Differently About a Flexible Workforce, describes a “purposeful” program as follows:
“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
- 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 onboarding materials and 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.”
With HR leadership in these key areas, both managers as well as the organization will experience the agile, nimble benefits that a flexible workforce model brings.
HOT TIP: Get this topic on the senior management agenda. Ask talent consultants for case studies to show the business impact.
Step 5: Monitor Your Transformation
You answered key questions. You developed your flexible workforce model. Your company has an infrastructure in place. It’s go time.
What does a modern talent-on-demand model look like in action?
|Traditional Workforce||Modern Talent-on-Demand|
A long process of finding talent through procurement or HR departments
A direct process where middle managers network and build relationships with a talent network and agency partners
One-size-fits-all onboarding experience that doesn’t account for varying employee types and needs
Efficient onboarding where clear goals, schedules and performance milestones are discussed and agreed upon
Internal employees perceive contingent talent as a cost-saving benefit for the organization
Employees understand strategic benefits of agile talent as improving efficiency, expertise and flexibility
Believe external talent is working “for" you
Mutual partnership is established where both parties feel a stake in one another’s success
Managers only develop internal people
Managers coach and invest in development of external experts
When you see these signs, you will have transformed your team into a highly agile force, combining the strength of your internal resources with the fresh energy and on-demand expertise of a contract workforce. You’ll be able to fire up results while keeping your team modern and lean.
Get Started - 7 Actions to Take Today
1. Identify your needs.
Explore the series of questions provided earlier to consider multiple angles. Write down what your flexible model should include.
2. Consider involving an experienced workforce consultant.
Check out what other companies are doing, what works and what to avoid.
3. Try new recruiting techniques that tap into contractor networks.
Present benefits that on-demand workers consider important.
4. Develop an infrastructure that supports a talent-on-demand model.
Reconsider how you plan, prioritize and budget. Provide training on working with contractors and flexible teams.
5. Look to HR for leadership in driving this change.
Tap into their experience in managing people, process and performance transformation.
6. Start the discussion internally.
Share data on the flexible workforce model growth. Hold brainstorming discussions with managers. Create an initiative on senior management’s agenda.
7. Be purposeful.
Create a formal plan and structure. Measure results.
“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.”