When it comes to human capital trends, we all know that business leaders are nervous about the shrinking supply of skilled talent and worried about their recruiting pipelines. What is less understood is that having a workforce plan that includes external talent (temporary workers, independent contractors/freelancers, service providers, retirees, etc.) can make or break a company's ability to achieve its strategic goals. Though the full-time labor force still accounts for the majority of the world's workers, those numbers are shifting fast. Smart workforce plans must rebalance the talent portfolio to account for the opportunity, risk, and cost factors that come with the external workforce.
It's a complex and high-stakes undertaking, but you may be further down the path than you realize. It's likely that you already have a high percentage of external talent conducting important work on your company's behalf- doing your R&D, designing your products, positioning you in the marketplace, etc. They're in your talent supply chain, but they're independent contractors, consultants, small firms whose people don't work for you directly. Instead, they're people essentially acting as "companies of one", working for themselves and lending their talents on a series of short-term engagements.
That's the reality of the new labor dynamic: Modern companies have to adapt to a more flexible, far less permanent definition of work. In doing so, they also have to completely rethink how they acquire, deploy, and engage their workforce-both external and full-time-for maximum business impact. This growing reliance on harnessing the power of the entire workforce prompted KellyOCG to sponsor the latest research from HBR Analytic Services.
The report, Holistic Talent Supply Chain Management, details findings on the progress, opportunities, and challenges companies face when taking a holistic talent supply chain management approach. More than 300 leaders (most of them C-suite and senior executives) weighed in across the Americas, APAC, and EMEA.
Not surprisingly, more than 70% said their organizations are already using the external workforce to meet market demands and maintain efficiency. But more than half also said that using external workers allows them to bring in expertise that their full-time staff lacks, and that non-FTE workers will become increasingly valuable to their organization over the next two to three years. The report also sheds light on how leading companies are integrating external workers into core internal processes, as well as the organizational growing pains they go through as they attempt to put a holistic talent supply chain management framework into practice.
It's definitely a shift in mindset for all involved. Treating your talent as part of your supply chain means bringing together the Procurement, HR, and Operations stakeholders in your company; assessing how your talent strategy aligns with your business priorities; and deciding whether you're going to optimize for cost, access to quality talent, or risk. That decision – along with demographic realities – will help determine your optimal mix of full-time and external workers, and will guide the construction of your talent supply chain framework.
I can tell you first-hand that this journey isn't always easy, but it is always worth it. Whether you're prepared or not, the external workforce is quickly approaching half of the global talent pipeline. Companies that don't evolve and move forward with this trend are going to end up without the talent they need to accomplish their business goals.