Introduction
It is important to note that the modern transformative changes in the economy did not leave the labor market unaffected. The global rise of the gig economy presents a new and massive opportunity for businesses and freelancers to create a highly efficient on-demand workforce. Therefore, the main facilitator of the on-demand workforce model will be businesses themselves, which means that business leaders should be willing to experiment with their talent management strategies to gain a competitive edge.
Perceptual Shift Towards the On-Demand Workforce
One should be aware that the on-demand workforce model is the opposite of what is being practiced today. The current framework mainly involves maintaining a core workforce of talent, which is comprised of full-time and part-time employees. In other words, an employer hires a worker and offers regular compensation and benefits. The contract is usually long-lasting unless it is stated otherwise. However, the rise of the gig economy and freelancing opened a new wave of opportunities for exchanging money for services. Most freelancers do not work for a single employer for a long period of time but rather focus on specific projects and are able to cooperate with several employers at once.
Such a change is rather a recent trend, which was made possible primarily by the internet and related technologies. The report states that “since 2009, the number of digital platforms that offer companies access to highly skilled workers—that is, those with a four-year college degree or more—has burgeoned from 80 to more than 330” (Fuller et al., 2020, p. 4). In other words, there is a growing demand from both freelancers and businesses for an on-demand workforce. In addition, “more than 30% of business leaders reported using new talent platforms extensively, while another 30% reported medium usage” (Fuller et al., 2020, p. 2). Thus, both the proliferation of the freelance platforms and increased usage of such services indicate the increased demand for skilled workers outside the core human talent at each organization.
When it comes to the perception, awareness, and knowledge about the trend of the on-demand workforce, businesses are noticing these shifts. For instance, “nearly 50% of respondents expected their use of new digital platforms to increase significantly in the future” (Fuller et al., 2020, p. 2). Not only the existing demand is high for freelancers, but also businesses expect the demand to increase on their part. The statement is further substantiated by the fact that 90% of various business leaders rate the role of talent platforms as either somewhat important or very important (Fuller et al., 2020). In other words, the competitiveness of many businesses now and in the future will depend on their strategic consideration and inclusion of the on-demand workforce. A 60% of business leaders have a clear expectation that they will have to reduce their current core workforce because they are shifting their talent management preferences toward an on-demand framework (Fuller et al., 2020). In addition, the majority of such leaders are not against sharing and exchanging talent among several companies, which reveals a stark shift in the leadership mindset towards the gig economy.
Real Advantages of the On-Demand Workforce
Moreover, it should be noted that the change toward the on-demand workforce is not solely fueled by the preferences and expectations of the business leaders and their respective organizations. It is stated that “a full 40% of users reported that accessing highly skilled workers through new digital talent platforms helped improve speed to market, boost productivity, and increase innovation” (Fuller et al., 2020, p. 3). Thus, there are tangible and real improvements to be made by being able to access freelancers on-demand rather than adhering to the traditional style of talent management. It is evident that the sheer scale of flexibility offered by the on-demand workforce improves the responsiveness of companies to sudden market forces. In addition, a constant change in human talent removes the risk of stagnation in the organization because fixated work cultures and environments do not form as a result. Therefore, the workforce brings a new wave of innovativeness and creativity, boosting productivity.
Nevertheless, the trend and opportunity of the on-demand workforce are still underutilized and underused by businesses. The report found that “only a handful of companies used new digital talent platforms to improve the performance of current business models and to innovate and create entirely new nimble, talent-light business models of the future” (Fuller et al., 2020, p. 3). In other words, although businesses are aware of the benefits of the on-demand workforce and increasingly rely on freelancers to operate with competitiveness, they are still adherent to the conventional talent management strategies. Therefore, the trend is still gradually evolving, and companies see the gig economy as something useful and not as something a strategy can be built upon.
Core Recommendations
In order to facilitate the transition toward the on-demand workforce, businesses will need to restructure their vision and approaches toward talent management. They need to “remake the culture of the organization, changing the definition of success to focus on attaining outcomes over generating new ideas or managing headcount” (Fuller et al., 2020, p. 3). The latter needs to be accompanied by a new value proposition from the workers themselves. One of the most critical aspects of basing a business strategy around the on-demand workforce is the separation of the workflow or process into discrete tasks and components, such as projects. Doing so will enable a cooperative use of freelancers and internal employees since each part of the work can be done separately, independently, and uniquely.
Business Opportunity
By looking at the strategic approach and action agenda, a well-thought-out business for the new global workforce would be an educational and training organization. The main service is a quick and concise training of freelancers on the core job requests posted by the largest businesses. The main customer would be both freelancers as well as the online platforms since both parties are interested in having highly skilled workers satisfying the businesses. The latter would also be a valuable stakeholder because their orders will create the standards of training.
Conclusion
In conclusion, business leaders should be willing to experiment with their talent management strategies to gain a competitive edge since the main facilitator of the on-demand workforce model will be businesses themselves. The rise of the on-demand workforce model presents a novel and global opportunity for businesses and freelancers to build a highly efficient and flexible strategy centered around the given trend. The change is evident in both the perceptual awareness of businesses, business leaders, and online platforms. In addition, the competitive advantages are real because the gig economy offers innovation, productivity, and speed.
Reference
Fuller, J., Raman, M., Bailey A., Vaduganathan N., Palano, J., Kaufman, E., Laverdiere, R., & Lovett, S. (2020). Building the on-demand workforce. Harvard Business School.