What Does Tomorrow’s External Workforce Look Like And What Do Businesses Need To Do To Get There?
The workforce is constantly changing. The pandemic, the war in Ukraine and the cost of living crisis have been a wake up call for many workers as they have sought to redress the balance between their work and personal lives. Rather than remaining loyal to one company, many workers have looked to flexible work for career advancement.
Similarly employers have changed their workforce processes and policies. Instead of relying on a workforce primarily comprised of full time employees, businesses have looked increasingly towards the gig economy and flexible work to meet their talent needs. As such, the external workforce will become more important and relevant for both workers and businesses in 2023 than ever.
But how can your business succeed in the external workforce market and what does it take to attract the best talent?
What does the future workforce look like?
What do workers care about?
The talent market has rapidly changed over the last couple of years. How, when and where we work has shifted irreversibly. The ‘Great Resignation’ has caused many existing employees to challenge their loyalty to their employer in exchange for increased learning opportunities and a more significant role in a different organization. Their focus has shifted towards what is best for their own career advancement rather than what is best for their employer. The overall power in the workforce market has shifted from new employers to job seekers who can demand more for their skills.
This has pushed many workers away from a typical 9-5 role. Research by McKinsey has shown that, of the total number of employees who quit their role in 2021, only 29% returned to traditional full time employment.
Emerging technologies have meant that many workers have been able to market their services on technology platforms to work when and where suits them best. This has meant that their jobs revolve around their personal lives rather than their home lives revolving around their work.
Why should businesses care about flexible workforce?
Businesses need to meet the needs of future workers. Making a significant investment in talent and human skills is just as important for businesses as investment in technology and infrastructure. If companies don’t embrace flexible working and the other aspects of employment that future workers value, they risk losing their competitive advantage in the market.
Employers cannot hope to create innovation and financial growth without attracting the right talent to their business and creating a positive work environment. Technology platforms have meant that companies are now competing on a global scale for talent across the world. This means that organizations simply cannot afford to ignore the flexible workforce. It is crucial that companies invest in the right technology solutions and develop a truly flexible workforce culture to appeal to new talent.
Finding the optimal talent mix
Businesses need to meet the needs of future workers. Making a significant investment in talent and human skills is just as important for businesses as investment in technology and infrastructure. If companies don’t embrace flexible working and the other aspects of employment that future workers
Embracing the future of the workforce means finding the optimal talent mix between internal and external workers for your business. This proportion is unique to your business and the market you compete in. It is not the same for many employers in different industries. However many businesses are not currently equipped to achieve this. According to Gartner, fewer than half of HR leaders consider their organizations effective at analyzing labor markets.
What does a full time role look like in 2023?
Having a talent mix that is comprised mostly of full time employees is outdated. But this does not mean that they should be absent from your entire workforce. Instead, there are some business critical roles that are best suited to full time workers. Jobs such as cyber security analysts, accountants, hiring managers and c-suite executives are just some examples of the roles in organizations that handle sensitive data that is not best suited to the external workforce.
Retention is essential
As a result, retention is especially important for these roles and should be a clear priority for the workforce strategy in all organizations. These roles are often highly skilled and means that employers will have to offer significant benefits to employees to keep them loyal. This means that organizations will need to implement a flexible working policy to remain competitive and compete for candidates across the world.
What does an external role look like in 2023?
An optimal talent mix for most organizations will include a significant proportion of external workers. But what roles are they best suited to?
Commuting vs remote working
Here, organizations need to look towards engaging with their external workers by creating a truly flexible culture. Where remote working soared during the pandemic, the talent demands of external workers have also shifted. Now there is an expectation amongst many workers of flexible working policies. This will most likely manifest itself into a hybrid working solution, where workers commute to the office on some days and work from home on others. Failure to adopt a flexible working policy within your business will mean that you lose the competitive advantage to your rivals and risk pushing top talent away from your business.
Education and training are essential for retention
External workers are now looking for careers rather jobs. This means they are looking to learn new skills and advance while they work for your company through education policies and employers development support. This makes it more important than ever for employers to effectively engage in professional development processes for their external workers. Not only will it increase the likelihood of external workers staying with your business, it will also make it a more attractive place to work for those looking to take the next step in their career.
How can a technology platform help?
Talent management never comes without its challenges. Technology solutions are essential to implement an effective talent management strategy in your organization. Luckily for businesses, technology platforms and modern Vendor Management Systems can help. The latest features of these platforms give businesses the chance to automate the management of their external workforce processes and support the capability of engaging in a long-term relationship with candidates. This is exactly what is needed in a market where career development has become increasingly important.
The essential capabilities of a technology platform in 2023
As we move into 2023, the capabilities of an effective technology platform are evolving. These capabilities roughly follow the changes to the talent market to enable businesses to advance the productivity of their external workforce and the efficiency of their talent management solution. Business should not consider technology platforms that do not have the following capabilities.
A career not a job
As external workers are looking to develop a career rather than to take on multiple jobs, a modern VMS needs to be able to support this. This means tracking the development growth of candidates as they work for and progress through your business. Part of this comes from being able to offer candidates the right education and training for the role that they are undertaking. This does not mean hiring unskilled candidates, but rather supporting those who are already skilled to develop further in your business.
Here, a modern VMS will be able to create a talent pool of existing candidates that have already come into contact with your business, through working in a previous role or by being an unsuccessful applicant amongst others. This means that your business will have a ready supply of skilled workers on tap ready to fill new positions. This will allow businesses to offer the training and support needed when creating a long-term relationship with candidates.
When trying to navigate widespread talent shortages, hiring managers need to look beyond the narrow boundaries of traditional candidates to fill their workforce. Organizations need to embrace diversity within their business to be able to benefit from the untapped potential of these candidates. This is because having a diverse workforce is directly linked to workplace productivity.
According to data from McKinsey, companies that are the top quartile of executive-team diversity were 25% more likely to have above average productivity.
One example of this is neurodiverse candidates. These candidates are often overlooked by hiring managers but have a huge wealth of potential for your business. A modern technology platform should offer a distinct way to engage and attract these workers to your business. If organizations mean what they say about promoting workforce diversity, this must be an essential aspect of any hiring manager’s talent management strategy.
Artificial intelligence is here to stay
For any technology platform to truly be modern it needs to include some kind of machine learning or artificial intelligence that can handle big data. Any modern VMS platform will include this through the ability to provide predictive decisioning and candidate automation. One way that the platform can achieve this is by sifting through each candidate’s application and automatically sourcing the best candidate for the role that you have advertised. It can also offer job insights into the position you have advertised such as the pay rates that other employers are offering by industry, region and numerous other variables.
This is a huge innovation in the development of these technology platforms and makes older iterations that lack of these improvements to productivity seem woefully outdated.
Why a VMS is essential for tomorrow’s workforce
Having a modern and up-to-date VMS platform is the most important aspect of a talent management strategy. It not only gives employers the chance to reach an external workforce across the world but also engage with candidates to create a long-term relationship. This will benefit both candidates and businesses as it will give candidates the chance to advance their careers and businesses the opportunity to create an internal talent pool. This is essential if businesses want to attract top talent and gain a competitive advantage over their rivals.
The large shifts in the talent market over the last few years should be a wake-up call for businesses to rethink the talent management strategy and the technology they use to implement it. Without the right tools and processes in place businesses cannot hope to achieve the productivity growth that will determine their future financial success. Without this, businesses cannot hope to attract top talent to their organization and they will not be ready for tomorrow’s workforce.