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Contingent workforce is not just a millennial phenomenon


The consulting firm Eden McCallum has taken a radically different approach to management consulting…  they leverage a dynamic international pool of “non-employee” expert consultants to serve their diverse client base around the globe.


These consultants are only deployed on a project-by-project basis. A majority of these consultants have extensive experience at many major consulting firms and deep industry expertise.


Eden McCallum uses a small in-house team and a group of young analysts provides support for their consultants’ work. Since its founding in 2000, the London-based company has completed more than 1,500 projects with more than 300 clients around the world.


Eden McCallum is one of many companies now seeing the power of contingent workforce models.


Technology is making these different staffing models possible for companies that look at new business models and business processes. By thinking creatively about how to find and leverage talent, companies are providing new and more innovative ways to better service their clients.


According to Eden McCallum, their business model takes the best elements of two sectors. From the traditional consulting sector, the firm borrowed the infrastructure and rigor needed for success. From independent freelancing, it took extensive experience, expertise, and flexibility.


A changing workforce


Companies have long hired subcontractors or freelancers in many roles. Those employees are usually hired to complement existing workforces or for short-term projects. They are meant to supplement in-house staff who serve as the core of the business.


The workforce, however, is changing.


“Contingent workers,” defined as freelancers, statement-of-work employees and independent contractors, are now a fast growing segment. With a desire to have more flexible work (and powered by hyperconnectivity), contingent workers are redefining how companies put together their labor pool.


By embracing these flexible workforces, companies can now develop a global pool of capable talent. With leaner project teams, companies are able to provide their customers a less expensive solution than their traditional competitors. In addition, these companies carry less overhead, less training, and even lower travel costs.


The use of contingent employees is expected to grow in the near future. Some experts predict that 45 percent of the workforce worldwide will be contingency workers by the end of 2017.


Finding freelancers


Upwork is another example of a company leveraging technology and contingent employees effectively. Upwork is a freelance marketplace company where writers, designers, and other skilled professionals bid on short-term jobs.


Clients can select freelancers based on the pitches they make, prices charged, skills, language, portfolios and reviews from other clients. Clients can choose to pay by the hour or a flat fee.


Upwork takes a 10 percent commission on the projects. The company manages client payments and provides an online portal to facilitate connections, track work, and allow clients and freelancers to communicate.


Upwork’s more than 10 million freelancers generate more than $1 billion in work annually to over 4 million clients around the globe.


The borderless workplace


This “open talent” economy enables companies to staff projects from an extended value chain that in many cases is global in scope. Firms embracing these strategies will move beyond seeing freelance talent as augmentative. Instead of outsourcing, these companies will be increasingly reliant on people with whom they have no full-time relationship.


For companies using a new model, there are a number of internal processes that need to be reexamined.


Resource management is one such area. Historically, resource management has sought external talent when demand cannot be met internally. Now companies need to identify and forge relationships with contractors, alumni and freelancers. These external assets need to be mapped with internal skill inventories. By doing so, they can enable talent to be scheduled and deployed for current and future demand more effectively.


Onboarding and workforce training also will change. Companies need to be able to impart values, culture, and methodologies in a very diffused structure. Internal knowledge needs to be shared effectively.


To clients, the experience with the company must be seamless. This is critical.  Service must be consistent and quality maintained.


Risk management will need to be rigorous in finding workers with the right qualifications, certifications and work history. Performance issues with external workers need to be identified and addressed quickly.


The companies that can do all this internal work are best poised to leverage this talent. Such companies may find that they are able to offer new and innovative services that previously were not possible.


Technologies needed


Managing this more complex workforce requires new technologies also. To create the borderless workplace, digital collaboration tools and platforms need to allow for virtual collaboration among workers and clients. McKinsey estimates that online talent platforms could boost global GDP by $2.7 trillion by 2025.


McKinsey projects professional services to be the industry where these platforms can have the most significant impact. It’s analysis projects a 9 percent increase in output and 7 percent cost reduction for the industry from online talent platforms.


Engaging the virtual workforce


Let’s look at a fictitious company to see how this transformation plays out.

Imagine a consulting firm engaging on a new project for their client. With a robust understanding of resource requirements, the firm can leverage both types of assets (internal and external) to deliver these services most expediently. 

The resource skill need can drive a analysis to find the appropriate talent (internal or external). Pre-established vendor relationships help identify and highlight the right external talent sources.

Project Team leaders assess all potential talent and availability to identify the right team members. Talent is secured and onboarded rapidly to quickly begin service delivery.

With a powerful understanding of the internal and external talent pools, companies can take on more projects and reduce operating costs.


Conclusion


Connected by smartphones, videoconferences and online platforms, talent today can be anywhere. The contingent workforce has advantages for employees and companies alike. It offers flexibility for the former and leverage for the latter.

Companies that reimagine their business models by embracing a borderless workforce are poised to pull ahead of the competition.


To learn more about Total Workforce Management solutions from SAP, click here.


This blog was originally published on Digitalist on May 4th.

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