Building and integrating a flexible, on-demand workforce requires a new approach.
How we work has changed. The pandemic has accelerated trends already in progress, and it’s become imperative for organizations to develop a flexible, on-demand liquid workforce.
1. Develop a flexible, on-demand workforce as a competitive advantage.
A November 2020 HBS and BCG study of leaders and executives reveals insight into how companies are changing how they think about their workforce. A growing number of organizations are shifting their talent model to a blend of full-time employees and freelance workers as a future competitive advantage. Nearly 90% of respondents expected working with on-demand platforms for premium talent to be critical to the success of their strategic initiatives in the future.
More than half of leaders responding to the same study said they expect their full-time workforce in the future to be much smaller than their current one, and the same number said they would increasingly prefer to rent, borrow or share talent with other companies.
Executives and leaders agree that the future of work requires embracing a modern business strategy that includes working with on-demand consultants and advisors.
2. Change work definitions to be project-based.
A flexible, on-demand workforce cannot function if leaders don’t get better at planning and defining the work itself. The risk of redundancies missed handoffs and other unforced errors only grow when some or most of the team responsible for delivering work includes freelancers, consultants, and contractors.
This starts by training employees to ask the right questions to get to the right level of clarity and detail about what needs to be done. Use this input to clearly define the scope into discrete pieces of work with finite milestones for external talent. Ambiguity and shifting goals can quickly escalate costs and reduce effectiveness when working with the on-demand workforce.
3. Create an integrated approach for the liquid workforce.
At most companies, consultants and vendors are kept isolated from the inner workings of the company as much as possible. Executing work across cross-functional teams has always been challenging. These issues can be magnified when working with external talent without an integrated mindset and approach. All workers — employees as well as freelancers, consultants, contractors, and vendors — need to understand the overall goals of work. They must also have visibility into pre-existing and ongoing work that informs the work at hand. Keeping the liquid workforce siloed can duplicate work and increase the time and cost of completing work.
Truly confidential and sensitive information should be protected with many internal safeguards. And it’s essential to have every external worker and employee sign a non-disclosure agreement (NDA) or, as we use in our company, a confidential information and invention assignment agreement (CIIA) before work begins. But while it is necessary to keep strictly confidential information safe, it’s paramount to also provide access to the data, information, and people needed to get projects done quickly and efficiently.
4. Define new processes and guidelines.
At some companies, consultants, freelancers, and vendors are subject to rigorous scrutiny, including background checks. Some may have master services agreements (MSAs) or independent contractor agreements (ICAs) or similar contracts in place. But in all too many companies, external workers are governed on a case-by-case basis at best — or with verbal agreements at worst. This puts undue stress on hiring managers and workers, as well as the legal, finance, procurement, and HR teams who share the burden of compliance.
Make sure to get fully signed and executed MSAs/ICAs along with NDAs/CIIAs and clearly defined work orders before work begins. This helps to mitigate compliance risk and ensures that work gets done smoothly.
5. Change the culture.
A flexible, on-demand workforce is disruptive. It’s the future of work. Workers and managers will have to rethink their roles, and some will question — or even resist — change. Great shifts require cultural adaptation.
Executives and employees will need to trust outsiders with information and think about freelancers, consultants, and contractors as more than just people who execute non-strategic work. Leaders will need to be more transparent and better at communicating specific, discrete objectives for the work they need to accomplish. Teams must become adept at working with a revolving set of colleagues, both full-time employees, and on-demand workers. This begins by building the habit of explicitly verbalizing formerly implicit team norms and making progress more transparent for others to track.
6. Build in software that integrates your flexible, on-demand workforce.
Moving to a flexible workforce requires leaders to think very differently about how they integrate outsiders with their most important work. A successful organization must build the capacity and capability to manage the complexity of compliance, payments, and legal agreements across multiple cross-functional teams. The key to building this capability is partnering with a vendor management system (VMS) or freelancer management system (FMS) like Liquid (our offering), WorkMarket, or Coupa with the tools and processes to help.
Using a VMS can help organizations scale and optimize project-based work at a lower cost, with lower risk and greater transparency and visibility. The same HBS and BCG study mentioned above also found that difficulty in onboarding external talent quickly and efficiently is a barrier for companies engaging flexible talent. Automated onboarding is just one of many key benefits of using a VMS or FMS.
Building Your Flexible, On-Demand Workforce
Building and integrating a flexible, on-demand workforce requires rethinking work definitions, integrating external talent, adapting company culture, and enabling via processes and software like a VMS. While these requirements can initially seem daunting, each is critical for companies to engage their on-demand workforce successfully. And flexible, on-demand workforces are increasingly becoming an essential strategic lever for companies. It’s time to embrace the future of work.