I’ve been thinking a lot lately about talent management in terms of the new workforce. We all know at some point, the economy is going to rebound. When that happens, the current speculation centers around whether companies will go back to their old ways and just start hiring people or will the new workforce be a blend of freelancers and consultants along with employees.
As you can probably guess, my bets are on the latter. At least for a few years, I think we’ll see more permatemps in the workplace. Which prompts a question about the best way to optimize the use of talent (either internal or external). If the new workforce is a hybrid composed of employees and contractors, then do companies still need to focus on hiring A-level players? Companies could focus on recruiting and retaining B-level (or C-level) talent and then bring in the A team only for projects that require it.
Or should companies still focus on hiring A-level talent and, when they need an extra set of hands, then the contractor doesn’t necessarily have to be top notch?
I wonder how many businesses are taking the time to think through their talent strategy for the new economy. It seems to me this is a pretty important decision. There might be implications beyond a company’s hiring strategy to how they deliver products and services.
For example, if an organization employs B and C level players, this could impact customers and the front line delivery of products and services. If external consultants are brought in to create programs and/or processes, they would need to realize the capabilities of the staff they’re working with.
On the other hand, let’s say the company employs only A players. This might change the projects that are given to consultants. Maybe the focus is less about a consultant’s expertise and more about scalability. So it would not only be acceptable but advantageous to have B level contractors. And of course, they would only do B level work.
Now you might be saying why can’t you have A level talent in both places. Well, realistically speaking…everyone is not nor will be an A player. That’s because, in part, companies don’t make the investment to develop people or employees don’t have the desire. The end result? B, C and possibly even D level players will be in our workplaces in some capacity.
I’m interested to know where you think companies will place their emphasis.
- Will companies decide it’s cheaper to hire B players and bring in A consultants?
- Or will they make the investment to turn B employees into A employees?
- Or will businesses do something else altogether?
And, are employees out there ready for the gig economy?
- The idea of work becoming a series of small projects (or gigs).
- The concept that our offices might be coffee shops or kitchen tables.
- The notion that job security is a thing of the past.
Wishing for the good old days won’t bring them back. It’s time to prepare for the future of work.
Nancy Newell says
You’ve got my mind turning on this one, Sharlyn. And you’ve raised some really great (and interesting) points. A well-known and well-respected business leader in my community recently stated that he’s never going to hire another employee again – temps cause less heartache (not heartburn, mind you) when you have to let them go. My buddy Jeff runs a local franchise of a large placement firm, and is busier than he’s ever been with hiring contingent workers for many of the Fortune-whatevers in our area – as much as 80% of some workforces (again, locally) are some sort of temp/contract jobs. He thinks he’s going to be very successful by becoming the outsourced staffing department for lots of companies – big and small – and he wants to do it by branding his employees (he’s not thinking “temps”) as the ones to bring success to companies. I think he’s right.
As I type this from my kitchen table, waiting for my next gig, I am hopeful that the economy will turn around. In the meantime, organizations will continue to do what they have always done, and the truly successful companies will be truly successful because they figure out how to exploit something in the value chain that their competition doesn’t do as well. The same will be true, I believe, in the “new order” and as it applies to utilizing human resources. Those companies that do it well will design a labor system, if you will, that is in alignment with the values and goals of the company. It will fit their culture, to a tee. And it will be wildly successful.
And because it’s me… I worry that if a larger percentage of us are out there on our own, where are we going to get our affordable and comprehensive health insurance?
Gabriel Gheorghiu says
Very good post! The way we work will surely change and it may happen sooner than we think. For people like me, who are in their thirties, a major change will probably happen when we prepare to retire.
I only hope we will be ready for it!
Lindsay says
You’re right…my first thought was why not hire A talent for both. I’d like to be all Utopian and say that businesses will realize the errors of their ways and bring everyone up to full potential. But we all know that just isn’t going to happen. So here is my take:
Businesses will try to stick with the “easy-in, easy-out” model of quality temps only when needed, to save $$.
They will discover that in a better economy, temps will demand higher wages, better conditions, more perks and will easily move on at a moment’s notice when a more lucrative temp position comes along. That will leave the low-ballers with half-finished projects, no A level staff to count on and absolutely zero loyalty when it’s crunch time and that temp is out the door.
Then one of two things will happen. Either employers will be forced to re-hire employees AS employees (not temps) or the temps will realize their incredible freedom and earning power and push for more $$, better terms, etc.
Of course, if the bill proposed in Congress (which will tighten down the definition of contractors) passes, this may all be moot, as most workers would have to be called employees. thus eliminating much of the savings.
hr bartender says
@Nancy – Thanks for commenting. You’re right – the companies that will be successful are the ones that will leverage this change to their competitive advantage. I’d add – those are the organizations that are thinking about their talent strategy now (versus when they need to hire someone.)
And I agree with you regarding health care. Needs to happen. Hopefully our President sparked something in our congressional leaders last night during the State of the Union.
@Gabriel – True, this kind of change could take years to become the norm. Thanks for adding to the conversation.
@Lindsay – Thanks for the comment. Your point about the competition and consequences of free agency is well taken. Companies will have to hold consultants and contractors accountable. Project and vendor management will be valuable skills.
Kathy says
I’m watching my company save the A’s and some B’s and outsource B’s and C’s. It’s great in a recession, but what happens when the economy cranks up again? Everyone wants the A’s so they’ll go out the door to the highest bidder. B’s and C’s can’t be in the succession plan if they’re not our people, so how do we replace the lost A’s? In addition, the turnover of outsourcing/permatemps/what-have-you is high so there’s a constant need to train new people and make excuses for “the new guy at the outsourcer.” The model is great for a short recession and for a few simple jobs but I can’t see how the permatemp economy can survive for long. It’s the same raw deal for the individual. Even if a permatemp is well paid and has benefits, he ends up out of work for a week or month or two now and again. He may have to move to get his next gig. He has to eat into his savings each time. Employers, employees, and the economy stand to do better if they can keep most people steadily and flexibly employed.
hr bartender says
Thanks for sharing Kathy. I see your point about balancing the need for “job security” with compensation, benefits, etc. I’m sure some people will start freelancing, love it and continue with it. Then there will be others who try it and the first chance they have to join a company, they will.
It’s time for individuals to do some self-reflection and decide what path will be best for them.
Jay D'Aprile says
Sharlyn,
This is such a timley article! There is a school of though that as the job market comes back companies will begin to rethink how people work. As I mention in my blog post http://talenttracks.wordpress.com/2010/01/02/the-future-of-work-here-comes-freelance-nation/ I state that companies will become smarter about managing their work force and . With this new concept employers will begin to shift work to a contract concept where talent will be treated much the same as a retailers supply chain. In the future needed skills will be added to a company in a just in time fashion. Then after a project, deadline or contract is completed that person who provided that skill will be released. This new working arrangement is beginning to become known as “freelance nation”. Take a look at my blog and let me know what you think.
Jay
hr bartender says
Thanks for adding to the conversation Jay. I agree with your post that freelancing will increase. The question becomes what will companies look for in a freelancer? Is it expert experience or scalability?
And as you mentioned, are employees ready to live this way? Going from gig to gig as their skills are in demand. If the future of work is in freelancing, then what’s happening now to prepare companies and individuals for this fundamental shift in the way we do business?
Jay D'Aprile says
Hey Bartender (Bet you have never heard that one before)
Sorry about the delay in getting back to you but have been traveling since Sunday, UGH! You asked what are companies are going to look for in a freelancer, experience or scalability. I am unequivocally confident that the answer to this question is; it depends. Each organization will look at freelancing as one tool to use to accomplish their goals. Allow me to give you an example. I focus my search practice in the insurance industry and every year insurance companies go through an annual enrolment process when companies change health plans. At that time, the health insurance carrier must bulk up on Customer Service Reps, IT Support and various other positions to manage this spike in activity. Also, every Health Insurance company has their own information technology system which the “freelancers” need to have experience operating. Therefore, in this example the insurance company is looking for experience and scalability. I know that there are a hundred variations on this theme across other industries. For example, here is a blog post from a insurance claims consultant who picks up on this evolving working structure on the claims side of the insurance industry. As you will see Free lance nation in the insurance claims function is due to a lack of upcoming claims talent: you can read his thoughts by clicking this link http://theclaimsspot.com/wordpress/2010/01/26/are-claim-departments-process-and-systems-ready-for-the-new-freelance-nation-worker/
In terms of workers I think that employees may view “Freelance Nation” initially as something to be feared. However, as freelancing becomes more prevalent this working arrangement will be viewed very positively. A “Freelance Nation” will allow individuals that opportunity to what they want to do, and when and how that want to work. With technology more and more people want to control their lives and this will allow them to do that. I am not naïve, this shift will be gradual and there are still a lot of questions left to be answered about how this arrangement will actually look when viewed from a macro view is anybody guess. What do you think? http://www.talenttracks.com/
All the best!
Jay
hr bartender says
Thanks for the follow-up. I believe your comment about talent strategy being linked to industry is spot on. It will be interesting to see how this unfolds over time.
Saleem says
Very interesting and thought provoking. But I want to raise a point, why companies utilize their time in seeking out the A talent, why not they put their timely efforts through the usage of new technology to determine a suitable talent that is compatible to the nature of the job. This strategy will lead to a sustainable growth with no extra investment in turning B talent to A talent.
hr bartender says
Thanks for commenting Saleem. I agree that finding ways to leverage technology and talent would only benefit the organization. I wrote specifically about this in an earlier post: http://www.hrbartender.com/2010/strategic/thinking-bothand/
Let me know your thoughts.