September 1, 2019
Freedom and autonomy rank above job security for independent workers
A recent US Bureau of Labour Statistics report showed that 79% of independent contractors prefer their autonomy over a traditional employment contract where someone else tells them what to work on. In the US, around 35% of the working population are independent workers [also called flexible or non-standard workers], a figure that is forecast to grow to over 50% within the next 10 years in developed economies.
Why are people preferring to work independently rather than through a traditional employed model? Independents value in particular the high level of autonomy and control they have over their time, flexibility in their work and choice over type of work they undertake. Some independent workers may prefer the predictability of being employed, but this is less than 30% of the group as a whole
For many younger workers and parents with childcare, elder-care and other external demands to their lives, flexible working is particularly attractive. The rise in the number of workers aged 55-64 in transition from full time work to retirement, is likely to further fuel this trend.
How independent workers access work opportunities is also changing fast. The traditional role of agencies and intermediaries who broker the demand for labour with supply of independents is being disintermediated by freelance platforms which streamline the process. Independents can access these online platforms directly, log their details and select the type of work they want.
For companies facing fast strategic change and accelerating product life cycles, the need for rapid access to specific skills becomes critical. Agility and ‘just is time’ need for specific skills is becoming a competitive advantage in terms of lower costs and improved productivity, with some multinationals now having up to 40% of their workforce as independents. Multiple layers of management are giving way to agile, self-managing teams. Increasingly, the traditional employment model is being seen as a slow system with high fixed cost that may not be delivering the best value and skills to the company.
How can organisations become smarter in utilising independent workers to create value? We see three areas where leading companies are focussed on:
Workforce is no longer just about Human Resources
The HR function is changing fast. Traditional administrative tasks around recruitment, and benefits management are either being automated or outsourced. Workforce planning and management is increasingly a strategic responsibility, driven by data and analytics needed to respond to demands for ‘real-time’ information and decision making. Development of an independent workforce strategy is becoming more central to this role.
HR functions are adapting to this transformation, sometimes through the emergence of an ‘internal marketing’ capability that is focused increasingly on addressing the needs of a flexible workforce.
A deeper understanding of what independent workers value is emerging and becoming part of the attraction that winning organisations offer. This may include skills development and training, working in high performing multifunctional teams or being provided with a credential on completion of a task that adds value to the individual’s skill portfolio.
- Engage with new platforms and processes
It’s clear what independent workers want but what don’t they want? They don’t want laborious recruitment administration, impersonal procurement processes and late payment. Smart organisations are transforming these traditional ‘pinch points’ and reaching out to independent workers in ways that lower cost and drive efficiency.
Many organisations are setting up their own databases of independent talent that has been home grown or comes through other platforms. Selection, credentialing and onboarding is increasingly automated and driven by key performance indicators that can be monitored in real time. Invoicing and payment is automated and verified.
Happy independent workers become ‘brand ambassadors’ of the organisation that they have worked for if they have had a positive experience. Platforms also offer services whereby independents can provide feedback on their work experience and rank the organisation which, like ‘trip advisor’, may provide positive or negative signals to stakeholders.
Competitive organisations are cognisant to these developments and are moving swiftly to attract high quality independent talent that is often required at short notice and can quickly be integrated into teams to undertake the task in hand. Focus, agility and delivery are becoming the drivers of value.
Where you are now?
Senior management and Board’s need to evaluate how workforce change in a fast moving environment will impact their business. To remain competitive, they will rapidly need to understand where they currently are and where they need to be in terms of ‘readiness for change’.
In our book ‘Flex or Fail’, we describe the future of work and pay in an era of automation and outline a set of steps organisations will need to take to retain competitive advantage. Subsequent to this, a number of organisations have approached us to work with them in order to provide a more detailed road-map as to what steps they need to take. From this, we have developed the ‘Flex Index’™, a tool that enables organisations to benchmark where they currently are in terms of ‘Flex readiness for change’. This takes a 360 degree view of where organisations are within their sector, including in areas around future-proofing workforce.
How to migrate from an employee centred to a more flexible workforce model, was low down the scale of understanding in many, but not all the companies we surveyed. Those who were engaging with new technology, taking a data driven approach and engaging with independent workers in an innovative way correlated with being performance leaders in their sector. Now may be good time to test where you are?
RTA Consulting would be happy to provide consultancy support for your organisation on these topics, speak at your events or engage with you to expand the conversation. Please contact us at firstname.lastname@example.org if you wish to be amongst a core group of innovative companies who work with this method first.
by Dr Tony Felton, Robby Mol, Professor Arturo Bris
September 1, 2019