The future of work is such a topical issue and there is so much talk about how we are supposed to prepare for it. But as someone who has been engaged in this conversation for some time, it’s clear that the future of work isn’t something on the distant horizon, it’s something that’s happening right now. Recently, I was invited to the stage at TedX Sydney to discuss the ‘traditional job’ and if this was a concept that was now dead.
For as long as any of us can remember, people have strived for a permanent job. For centuries, jobs have provided people with status and stability and a way of life. Overlying the pursuit of the permanent job was the notion that if you’re not in a job, you’re out of one. But times are changing fast.
Non-permanent “alternative” work is a global phenomenon and, in many ways, the new normal for businesses looking to increase agility and for workers looking for more flexibility. According to the latest EY Contingent Workforce Study, around 30% of US and UK workers today are in non-permanent employment, and this figure is expected to rise to between 40% and 50% by 2020.
Research published in the annual Freelancing in America report shows that by 2027, the majority of workers in the US will be engaged as freelancers. The most interesting part of this research is that the fastest growing segment of the on-demand freelance workforce is actually professional, knowledge workers, rather than low-skilled, low-paid workers.
Intuitively this makes sense – if you’re in lower-skilled work, you look for more stability – if you’re in higher-skilled, more intense work, you’re looking for more flexibility.
For large organisations – the typical size of their non-permanent knowledge workforce is somewhere between 20-50% and from our research, we estimate a median of about 35%. That number tends to be higher for more project-centric industries such as mining and energy, even higher for industries undergoing continuous transformation such as retail, financial services, technology.
What does this mean for the new reality of work?
Suddenly it feels different when we stop saying “contingent” workforce and we start talking about “half of our people” – right? As thought leader Josh Bersin from Deloitte said recently: “The alternative workforce is not so alternative now.”
Yet many businesses are slow to adjust to the new normal and think they are making a “choice” about if and when they adopt a blended workforce approach. Consequently, they are failing to seize business opportunities and are losing out to more agile competitors.
A common starting place for our work with organisations is helping them make the connection about why they are severely under-resourced, capacity-constrained and dealing with four month turnarounds on talent (that is simply not in the permanent market). We show them they have to change the way they think about “getting work done”.
For a start, in many talent segments, particularly for those in high-demand skills, companies don’t choose how the best talent want to work, the talent does.
Often times we work with a leadership team who are still trying to make a decision about which skills/capabilities they keep permanent versus those they build out in a more contract/project-based way. Meanwhile, their forward thinking competitors have on-boarded the talent they needed within a week of deciding what they require, have paid a 20% premium for getting them “on-demand”, the work has been executed and those people have either moved to another gig in the company or moved onto another client or out of the company by that time (off the books and off the payroll). Yikes. Not good.
Secondly, this isn’t a question about whether or not you adopt a non-permanent workforce – you have one (if you don’t, you probably should unless there are special circumstances) – it’s about how you choose to engage, nurture, retain and manage that workforce and community.
By hanging on to outdated definitions of the traditional job, many companies are excluding or driving away a large number of talented people from their workforce who simply do not want to work in a traditional way. As a consequence, these companies are now facing enormous skills gaps and finding it hard to fill key roles because conventional models of work are costing them talent and are slowing them down.
Companies are watching extraordinary talent with valuable IP walk straight out the door for another opportunity because of the lack of flexibility provided by the traditional job. What’s clear is that the traditional job is no longer the right model or only model of engagement for companies wanting to retain top talent.
The new normal means highly skilled, highly paid people are moving on from the assurance of stability in favour of the benefits of flexibility, resulting in a rapid rise in mobile, professional freelancers. It is therefore essential that companies adapt to this emerging trend and consider different models of employee engagement.
What should companies do?
Some forward-thinking companies are already changing the way they think about their workforce by being able to retain and utilise talent indefinitely. One of the most efficient ways of doing this is by creating an active employee alumni community where if an employee resigns they can still choose to remain part of the company, which the company can then draw upon for special projects when and as needed.
This means once a person is out of the company, their value doesn’t disappear forever. Implementing a model like this means that that person’s skills and knowledge are not lost altogether, but instead, they become a valuable resource that can be drawn upon when needed on a project basis. Having an external group of talent, which is already familiar with the company and its operations, is an incredible advantage during busy periods.
Companies can, therefore, move away from placing their values on a traditional job structure and benefit from implementing a blended workforce – an engagement model where a mix of internal and external people are deployed on project-based work.
A few large businesses are already thinking outside the box. For example, Australian supermarket group Woolworths recently introduced a new business that combines it’s digital, e-commerce, data, and customer divisions under the name ‘WooliesX’. WooliesX has been reorganised around the customer and natively built-in lean, agile work practices.
This agile transformation provides the cultural guidelines for managers to move quickly with the right people on the right projects. What’s unique, and critical to organisational buy-in, is that WooliesX business leaders have ‘flesh in the game’ and are actively advocating for new ways of working which will one day roll out across their entire business.
The lesson other businesses can learn from large organisations like Woolworths changing the way they work is that while having the digital tools in place is important, having executive leadership promoting robust cultural transformation, along-side disciplined execution is equally as essential.
So how does this inform the next evolution of work?
Dominic Price from Atlassian says “instead of treating an organisational chart as a map, companies are now using them as guidelines and moving towards a team-centric organisational model, where work gets done by smaller teams.”
What we are seeing is that the workforce is moving from role-based work to project-based work, and companies should move their focus from filling jobs to finding the right skills for the right project. In doing so, companies can free themselves from the constraints of conventional titles and roles and open themselves up to engage all talent, flexibly. This includes the huge pool of professional talent which has turned to freelance because of its flexibility, freedom to choose clients, variety of work, and money earning potential.
The future of work is a blended engagement model where companies will embrace agility by harnessing a powerful combination of internal and external talent on-demand. In this workforce, freelancers won’t be considered a last resort but will provide the highest expertise for some of the most critical projects. They become the first hire, not the last hire.
To help shape this future workforce, the stigma around the freelancer needs to be removed and instead considered to be a viable alternative to the traditional job. The future of work requires a standardisation of freelance work that protects flexibility but offers the benefits of full-time stability such as providing more support and security to the freelance community as well as entitlements like indemnity insurance.
The rise of the freelancer and agile workforce does not mean the traditional job is dead – it just means it is changing fast for an increasing number of people. There needs to be a shift towards flexibility and a shift away from the ‘you’re either in or you’re out’ mentality.
Without tension, there cannot be progress. Our tension will be about balancing stability and flexibility, for both individuals and companies.
The future of work will be driven by talented people choosing when and what types of projects they want to work on, and companies hiring talent with the right skills, at the right time – regardless of whether they are in the building or not. In doing so, companies will benefit greatly from the blended model of engagement, where they can draw on the skills from freelance experts or internal experts as it suits, giving them greater agility and flexibility. The traditional job is here to stay, but the mentality around the workforce is changing as companies think beyond conventional frameworks and augment traditional jobs with alternative workers.
As the freelance economy matures, traditional structures which define work will need to develop. For organisations to stay ahead of the curve, it will mean rising up to meet the needs of a new modern, flexible, and agile workforce now. The future of work isn’t coming. It is already here.