The only thing that may distinguish one member of your work team from another may be a simple slip of paper — the W-2 form. (Or equivalent wage and tax statement outside the US.) Today’s work gets accomplished by teams of contractors, contingent workers, freelancers, and partners — along with regular employees. There is also another type of worker emerging — the automated worker, designed to augment human labor, and perhaps decision-making.
The blended workforce is not a new concept, it’s been around for decades. What’s different now is that many regular full-time employees work remotely or hybrid, and therefore may be even more indistinguishable from their contracted counterparts. Plus, interconnected with technology — from collaboration platforms to shared cloud services — the worker’s status hardly matters anymore (except to HR departments).
What matters is that all participants are viewed and managed as a single, cohesive workforce. There’s an art to that, and it gets results. A recent study of 4,078 executives finds such attention leads to better management practices, more effective recruiting and retention, and more effective allocation of resources.
The study, released by MIT Sloan Management Review and Deloitte, concludes that those who are adept at treating both internal and external contributors as one are willing to exchange control for more open-mindedness about the roles these new types of workers are assuming. Importantly, it means letting go of an old mindset that tasks need to be accomplished by the 9-to-5 workforce.
Interestingly, 43% of the respondents themselves have worked as contingent workers (freelancer, independent contractor, or other non-permanent) in the past five years, the study shows. Most are now involved in full-time jobs.
“Orchestrating workforce ecosystems is especially timely given the ongoing workforce shifts brought about by the Covid-19 pandemic, shifting worker preferences, and the changing nature of work,” according to the study’s authors, Elizabeth J. Altman of the University of Massachusetts, David Kiron of MIT Sloan Management Review, and Robin Jones of Deloitte Consulting.
Even among traditional companies, managers are learning to “adapt to a changing workforce where they have more contributors but less control,” they state. “In some cases, we see upwards of 30% to 50% of an organization composed of contingent workers, and organizations increasingly relying on third parties to deliver some of their most essential services.”
There is work to be done. Only about half of the respondents, 53%, feel that their organizations will be able to effectively engage the external contributors they need over the next 18-24 months.
Where can these workers be found? Only 28% have an internal talent marketplace (an internal platform that matches workers with available projects or stretch assignments), with another 11% in the process of implementing such a service. A majority, 59%, expect to increase their use of technology for workforce augmentation, in the form of AI, robots, or chatbots.
Orchestrating these expanding workforce ecosystems “requires a new set of management practices, leadership approaches, and other changes,” the co-authors state. “Leaders who view their workforce as an ecosystem structure tend to think differently about, and act differently toward, their workforce than leaders who view their workforce strictly in terms of hired, full-time employees,” they add.
This requires a major shift in mindset. “Leaders who are actively making this transition are not only thinking differently about their workforces and about how work should be accomplished but also altering their behaviors accordingly.”
The research shows that companies that are most intentionally orchestrating their workforce ecosystems have five common characteristics:
- They closely coordinate cross-functional management of internal and external workers.
- The hire and engage the internal and external talent they need.
- They support managers seeking to hire external workers.
- They have leadership that understands how to allocate work for internal and external contributors.
- They align their workforce approach with their business strategy.
Corporate culture plays a role in moving blended workforces forward as well. Questions that arise include how far managers should go in including external contributors in existing corporate culture. Plus, they need to be mindful of diversity, equity, and inclusion principles and practices as they apply to external networks.