The more open talent economy – an asset and a challenge

by Nov 13, 2013Blog0 comments

The more open talent economy – an asset and a challenge

The number of contingent workers – those employed on a temporary or contractor basis – is growing. It is predicted that this part of the workforce will grow by three to four times the rate of other more traditional workers, eventually representing a quarter of the workforce around the world.

While the desire of individual employees for greater freedom in their work is a driving force behind this shift, this approach also yields substantial benefits for the business.

Why consider a contingent component to your staffing model?

The employment of contingent workers improves a company’s flexibility, scalability, and ability to react to opportunities and circumstances in a number of ways.

Availability of skills
No company can be an expert in everything. But in an ever changing field, the ability to call on a wide variety of skills becomes vital. Businesses expect agility, scale, and the right skills to be available faster than ever and engaging a contingent workforce lets you bring in that diverse talent for as long as it is needed.

Greater innovation
Contingent employees ensure fresh thinking, help alleviate cultural myopia, and help reduce the risk of business process stagnation (preventing your ways of working from getting stale).

Creating a scalable resource model
Employing contingent workers reduces costs, letting employers pay only for the hours that they need. While there may be extra costs in finding contractors, there may also be savings from a benefits and HR resource perspective.

Openness to change
One of the greatest barriers to change in an organization is habit. Long term employees can become entrenched in old ways of working, due to emotional investment, sunk cost fallacy and the perceived risk that comes with change. The Contingent environment is a bit different as they have limited history or exposure to your company’s old habits and can be employed on condition of agreement to the practices you want to see in place now, not those that exist today due to the actions of years gone by.

A route to recruitment
No company is ever going to be without permanent staff. Contingent staff provide a reliable way to find potential recruits. Instead of relying on CVs and the opinions of others, you can see them in action for an extended period of time before seeing whether you want to offer a permanent position.

For all these reasons, the use of contingency workers can add value to a business. But doing this well involves finding best practices to manage and develop contingent workers.

The challenges

This change in approach may be a significant shift in thinking for many organizations. It challenges our core assumptions about how people enter the workforce, how people engage and ultimately work together, and how the business works to further develop their potential. For some it is part of their current operational plan; however, for many other businesses is may result in the need for a revised operational framework that embraces the new model to keep the business at the leading edge.

Permanent employees do not know contingent workers as well as they do their established colleagues. This can lead to barriers of trust, and subsequent blockages in information sharing, which must be overcome to ensure smooth operations.

Contingent workers have a different relationship with their employers, and so may feel less engaged. They may be left out of company social events and reward schemes despite long service for the company. This can create discontent and lead to a decrease in work performance, as well as being a barrier to beneficial long term working relationships.

Political change
As contingent workers become more prominent, government bodies are taking notice and asking whether employment law around them needs to change. While a company cannot predict where this is going, it must be prepared to adjust when legal change comes.

Though these barriers are more substantial when employing contingent workers, they are all issues that good managers should already be addressing – building trust, building engagement, and developing the flexibility to change. Benefiting from contingent workers merely adds a layer to the challenge.

In this more open talent economy, with more diverse talent pools, HR leaders need to revisit their approach to workforce planning and become more aggressive from a talent sourcing strategy perspective if they are to capitalize upon this broad range of talent.

Mark Lukens, MBA

Mark Lukens, MBA

Founding Partner at Capatus
Mark Lukens is a founding partner at Capatus and located in the New York office. He leads the Capatus’ Global Talent and Advisory practice. He is also an expert in the firm’s research and nonprofit practice. Lukens has more than 20 years of c-level executive and consulting experience delivering strategies and transformational programs to firms ranging from start-up to Fortune 50. He has worked with clients in Europe, North America, South America, and Asia. Lukens worked extensively in various product and service categories including health care, life sciences, government, nonprofit, technology, and professional services. He also advises clients in other industries including commercial and industrial, retail, logistics and transportation, media and more. Lukens serves on several Nonprofit Boards and is a professor at the State University of New York where he teaches in the School of Business and Economics with a focus on marketing, international management, entrepreneurship, HR, and organizational behavior to name a few. Lukens has a technical background as a MCSE and earned an MBA from Eastern University.
Mark Lukens, MBA


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