What’s driving enterprise adoption of flexible workforces?
Agility, cost and quality prompt managers to look beyond traditional FTEs
Whether the driver is business agility, an effort to better contain costs, or a focus on enhancing customer experience by delivering top talent to do the job, business leaders show increasing interest in breaking with the traditional employee paradigm and looking to the flex workforce to fulfill their needs.
A survey by Better Working World indicates the contingent workforce is expanding at midsize and large companies. In 2016, 18 percent of the workforce at mid-market companies (revenue of $100 million to $5 billion) was contingent, and projected to reach 20 percent by 2020. At large companies (revenue above $5 billion), the contingent workforce was 16 percent in 2016 and expected to reach 19 percent by 2020.
Enterprise-grade success with contingent workforces
Fortune 500 companies and global giants such Samsung are turning to online freelancing platforms for designers, marketing staff, IT specialists and other knowledge workers, according to the Fortune article, “The Gig Economy Isn’t Just For Startups Anymore,” by Erika Fry.
In the past 12 months, Fry reported, the total number of projects sourced using these platforms increased 26 percent.
“It’s surprising how far some of these very large enterprises are in adopting these platforms,” says Vili Lehdonvirta, an economic sociologist and associate professor at the University of Oxford, who is studying online freelancing platforms and their effects on the way workforces are organized. He was quoted in Fry’s article.
Upwork’s CEO told Fortune, “Until a couple years ago, we mostly saw very small companies, with maybe as few as 100 employees.” Now, there’s so much demand from large firms for freelancers on its platform that Upwork is planning to double the size of the “enterprise team” that caters to them. Upwork currently works with 20 percent of Fortune 500 companies.
What makes us most optimistic about the future of the gig economy is the significant value that enterprise organizations realize when they embrace flex workers.
Key benefits driving enterprise adoption
According to Better Working World’s survey, “The No. 1 driver (at 62 percent) for big companies is controlling labor costs. For mid-market companies, the No. 1 driver (at 58 percent) is fueling growth—to complete projects requiring specific expertise or capability beyond the existing workforce. The benefits of accessing skilled labor on short notice and with limited commitment are particularly valuable in the fast-growth, agile environment of scaling smaller companies.”
Creating greater business agility
Researchers at Oxford University found in their study that online platform resourcing provides easy access to a scalable source of labor, skills and expertise, reduces start-up and transaction costs, and eliminates conventional hiring barriers.
Sanjay Sathe, CEO of career coaching platform RiseSmart believes “making space for gig work across an organization will make it more agile and responsive to the market.” He was quoted in an article in Fast Company last January.
“Having gig positions means they are able to onboard new talent and off-board unneeded skills without the burden of employment taxes and paperwork. It is often a decision made quickly and without posting as a traditional job might be advertised,” Sathe said.
Unlimited access to engaged workers with specific, desired skills
Leaders are recognizing the gig economy is a way to get ahead from a labor standpoint. “Instead of continuing to fish in a small, local talent pool and struggling to compete with the litany of competitors, some organizations have made the intentional decision to evolve their recruiting practices in order to stay one step ahead,” Chris Cancialosi wrote for Forbes in “Remote Work Teams—There Are Many Fish In The Sea.”
Online freelance platforms allow workers to highlight their specific skills, making it easier for would-be employers to hire for precise needs. This is why some observers recommend that enterprise leaders rethink their job descriptions. HR should be looking to convert job descriptions—historically “career-oriented”—to be skills-based.
Higher-quality work grows from greater accountability
Customers—regardless of whether we’re talking about Airbnb, TaskRabbit, Thumbtack, Upwork or Mechanical Turks—have high expectations for quality. Technology plays a critical role in that proposition.
In some cases, service providers are emerging to fulfill that need. Take MetroButler, a New York City-based company that sources people who service Airbnb properties by greeting guests, providing housekeeping and other services.
The New Yorker article, “Is the Gig Economy Working,” explained how MetroButler helps ensure its services meet expectations: MetroButler Bobby Allen “dressed the twin bed in crisp white sheets, pulled the duvet cover over the duvet with impressive speed, and rolled a bath towel and a hand towel into little logs, to be arranged in the center of the bed. He consulted his phone. Every task was annotated on a photo of the space in an app that let MetroButler watch his progress in real time; he checked off each detail and took a photo of the room when he was done.”
In general, enterprise leaders who hire via online freelance platforms report that they are satisfied with the quality of work. Company leaders who participated in the Oxford study said that work is often higher quality than that produced by talent sourced via traditional channels. One manager quantified it as being “similar or higher quality” 60 percent of the time.
Accountability is woven into the DNA of managing a successful flex workforce. At Uber, passengers rate drivers and driver rate passengers, encouraging both parties to be as courteous as possible. At Liveops, call quality management and deep historical insights on performance enable customers like Ideal Living to fine-tune their programs on the fly to achieve greater results from their media campaigns.
Technology blends workforces
“Virtual reality will be used to accommodate the evolving definition of employee to include both workers in conference rooms and gig workers contributing remotely,” said Shaun Ritchie, CEO of a firm that produces meeting software. He was quoted in Fast Company this January.
Cloud-based and team collaboration software such as Google Docs and Slack create organized, transparent and accessible real-time collaboration; Zoom enables video conferences; Basecamp enables project management; and Trello or Jira improve prioritization and workflow. Each of these pieces help stitch every type of worker together to create a more seamless—but distributed—work environment.
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