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Employers are abuzz again with the economy gradually showing signs of tangible progress.  With this progress comes the renewed search for talent, as companies are focusing on growth once again!

However, things are a little different this time around, as we see the continued emergence of the flexible workforce as a critical component of workforce strategies.  Companies are revisiting their traditional staffing methods as they look to crack the code on the workforce of tomorrow.

Oxford Economics recently conducted a global study of 5,400 participants. Half were rank and file employees and the other half executives. One of the main findings was an increasing reliance on contingent workers.  One statistic that jumps out is that 83% of the executives stated that contingent labor is a key part of their talent strategy.  They view this as a reality if they are to remain competitive.

How did we end up here?

The recession of 2008 forced a significant scaling back of the labor force.  To survive the worst economy in decades, most employers simply had to find ways to drive cost out of their business and reducing headcount was the most obvious choice.

As the economy slowly inched back up, while employers were slow to hire back large numbers of full time employees, many decided to tap into an old source but in a much more robust and strategic way.

Looking at it from the employee perspective, there are multiple talent pools searching for a different relationship and balance when it comes to employment.  From Millennials to Gen-Xers to Baby Boomers, many of whom have either only been in the workforce for a short time or out of the workforce for a long time, the opportunity for flexible work arrangements can be very attractive.

The contingent workforce market has been around for years. However, unlike the days of just getting a temp to handle administrative duties, or going full force into a PEO or HRO model, the market has expanded into areas historically reserved for full timers.  Finance, IT and operations are increasingly “leasing” talent to meet certain needs quickly.  There are definite advantages, but increasing your reliance on contingent workers does not come without risk too.

What’s so good about this model?

  • Just-in-Time Labor: rapid access to specific skills to execute on a specific project or goal
  • Deeper Talent Pool: tap into the global labor pool
  • Talent attraction: many workers, young and/or experienced, embrace this arrangement
  • Innovation: workers who are not limited to the way things have always been done


Considering the growing challenge of placing the right people in the right jobs at the right time and place to execute on your business objectives, you can see the appeal of integrating the contingent worker into your workforce strategy.

How about the potential downside?

  • Compatibility: Will the team still work well and be effective?
  • Culture and Company Brand:  How will employees view you as an employer?
  • Management: Are your managers prepared to incorporate this new dynamic?
  • Compensation and training models will need revamping
  • HR Processes and technology will need to factor in this new mix of employees

Companies need to be aware of these issues and ask these questions, along with other potential implications of a mixed environment – and plan accordingly.  Managing this dynamic effectively is challenging, yet critical if companies are to succeed in executing on this emerging workforce strategy.

Is this a Fad or is it the Future?

Without a crystal ball, it is impossible to say for certain.  Looking at the trend though, consider the Bureau of Labor Statistics study that shows a 29% growth in contingent workers from 2009-2012.  Add in the Oxford Economics finding that 83% of executives will be embracing the strategy moving forward, and all indications are that this approach is here to stay.

The solutions provider landscape seems to think it is here to stay as well.  While there are still standalone vendors for automating procurement processes and others for automating the process for managing the contingent workforce, there has also been some consolidation in the provider market space.  For example, SAP recently acquired both a procurement solution provider (Ariba) and a contingent workforce management solution provider (Fieldglass), to add to their existing suite of Human Capital Management (HCM) solutions.  SAP also acquired SuccessFactors, a Cloud HCM solution provider, a few years back. The end game is to to offer comprehensive, integrated, end-to-end solutions and simplify what is currently a fairly complex set of business processes.  Big investments like SAP’s indicate that the demand is increasing and not likely to slow down any time soon.

Are you ready?

It is important to ask yourself a few key questions:

If you already engage contingent workers today, how do you identify the skill sets needed?  How do you find the candidates? How do you reach, recruit, onboard, train and compensate that talent? Have you developed a culture that understands how the approach impacts the business? Are your processes efficient and scalable?

If you do not currently access contingent workers, how will you integrate the approach into your workforce strategy?  Have you considered areas within your organization that might benefit from this approach?  Are your competitors tapping into this market?  Can you afford to wait any longer?

Talent will continue to be the biggest challenge for employers and your ability to create a solid workforce strategy and execute effectively may be the key to your overall success as an organization.

What do you think about the flexible workforce?  If you want to learn more about this topic, download the complete Workforce 2020 Oxford Economics Research.

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