Posted on 22 October 2013.
It may seem a heresy, but Matthew Franceschini, CEO of Entity Solutions, suggests that not too far in the future, the word “employee” may not exist, at least, not in the form that we currently know it.
The face of the workforce is changing with more organisations turning to contingent workers rather than automatically appointing full time employees whenever a project demands a new position, or when a new skill is required. Employers have embraced the flexibility of on-call talent, while the workers themselves are responding enthusiastically to the opportunities, challenges and the freedom of independence.
In November 2013, the Australian Bureau of Statistics reported that Australia had 11.5 million people engaged in 6,359 different forms of employment. Seven million of these workers were engaged in traditional employment. Of the remainder, 2.2 million workers were in jobs that had no leave entitlement while 980,000 were independent contractors.
The remainder were classed as business operators. In summary, traditional employment accounted for just 63 per cent of today’s workforce.
The new nature of engagement
There are already many indicators to suggest what these labour force changes will mean; providing an idea of what the workforce may look like in ten or twenty years. Thanks to information technology, the workplace is no longer a fixed physical location. People can work wherever and whenever they like. It’s a situation that the up and coming generation of employees are more than comfortable with. They’ve spent their entire lives studying, researching and communicating via the Internet.
People have become more comfortable with the idea that they may have several different careers over their lifetime, rather than a handful of long-term permanent roles. This is in part because jobs are less easily defined or mapped. Many of the roles being performed in business today didn’t exist ten years ago and it’s almost impossible to predict where demand will lie ten years hence.
The lack of employment security is forcing workers to become more assertive in their career path, with individuals determinedly seeking to build a portfolio of skills and experience. Once a person starts to take charge of their career, it can be just a short step before they consider marketing their expertise in order to reap the advantages that their newly found skills afford in the corporate war for talent.
The IT and creative industries are prime examples of the new nature of engagement. Permanent jobs are being replaced by contracted projects, whereby workers are given a set of tasks to achieve within a set time period.
The challenge for management
For management, the adoption of a workforce model that includes contingent workers presents a major challenge to the old ways of thinking. Companies typically find they need to plan their requirements more carefully to account for peaks and troughs of demand. Human resources professionals in particular, can be challenged by the implied lack of control and the difficulty of gaining visibility of the workforce when half of the workers are not employees.
To ensure the use of contingent workers does actually deliver cost savings, most companies find it best to work with a small panel of suppliers who understand their needs and who can provide the required talent at a suitable price and then manage engagement
A mutually beneficial relationship
Organisations also soon discover that they can’t take this new labour source for granted. Given the shortage of talent, good workers and special skills are in high demand. With a choice of projects in front of them, candidates tend to choose the most interesting engagements or those that offer an opportunity to learn. Therefore, companies have to make themselves and their projects attractive.
The annual IPro Index, an Australian study into the attitudes, experiences and issues affecting white collar contractors (referred to as Independent Professionals or IPros by Entity Solutions), provides some helpful hints on how to achieve this. Participants report greater commitment to employers when the employer respects their role, shows fairness and transparency in contractual dealings, provides clarity in expectations, and recognises that this is a relationship of mutual benefit.
Although contingent workers enjoy their freedom, they also respond to being part of the team. Simple steps such as induction, inclusion in team communication and being invited to participate in the celebration of project successes or milestones can all increase engagement.
Where the relationship may be long term, look for ways to keep it fresh and the worker enthused. Consider incentives such as bonuses or opportunities for skills development or learning, because any organisation that values contingent workers is typically repaid with loyalty (for the duration of the project) and energy.
Twenty years from now, it’s likely that the employment model will be completely different to that of today. Permanent employment will decline as the use of contingent employees becomes commonplace across many, if not all industries. Perhaps even the word “employee” will no longer exist and the traditional employment model will be completely replaced by more flexible alternatives. For employer and employee alike, it is a change that should be welcomed for the opportunities it will bring.