We all know that business leaders are nervous about the shrinking supply of skilled talent – and they should be. There are more skilled workers retiring than entering the workforce. Not enough people are pursuing STEM degrees, and more industries are competing for the same shrinking group of talent. It’s a thorny problem. Yet too often, companies respond with outdated thinking and an internal focus.
Simply pushing more people into the talent pipelines that already exist is not going to solve the problem. A more holistic approach is required. Modern companies need to adapt to a more flexible, far less permanent definition of work and completely rethink how they acquire, deploy, and engage their workforce — both full-time and external — for maximum business impact. In fact, more than ever, 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.
Inside-out thinking won’t work, because the external workforce has its own needs and preferences that shape how and where they fit into a company’s talent supply chain. An outside-in understanding of the new labor dynamic is required. Talent is working in different ways throughout the stages of their careers — either by choice or necessity. They might begin as a contract worker, switch to full-time employment for a decade or two, become an independent contractor years later, and wind down their career as a retiree doing freelance work.In fact, although the full-time labor force still accounts for the majority of the world’s workers, more than one-third of the global workforce now works in a non-traditional manner.
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In particular,“free agents” in highly specialized STEM fields have the upper hand. With skilled talent in short supply, these workers can choose what they work on, as well as when and where they work. They enjoy moving from project to project, and look for challenging and rewarding work that complements their personal goals. These workers are inside the talent supply chain, but they’re outside the typical pipelines. They’re independent contractors, consultants, small firms who are essentially acting as “companies of one,” working for themselves and lending their talents on a series of short-term engagements. They bring skills, knowledge, and flexibility that are an integral part of any effective talent supply chain. And companies ignore them at their own peril.
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.
More than 70% said their organizations are already using the external workforce, and more than half also said that non-FTE workers will become increasingly valuable to their organization over the next two to three years. Yet harnessing the real value of this external workforce and aligning it with company strategy is a tall order. Smart workforce plans must rebalance the talent portfolio to account for the opportunity, risk, and cost factors that come with the external workforce. Not surprisingly, the report also sheds light on the growing pains that organizations 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 talent as part of the supply chain means bringing together Procurement, HR, and Operations stakeholders; assessing how the talent strategy aligns with business priorities; and deciding whether to optimize for cost, access to quality talent, speed, or risk. That decision — along with demographic realities — will help determine the optimal mix of full-time and external workers, and will guide the construction of an effective talent supply chain framework.
KellyOCG has helped many clients on this journey and I can tell you first-hand it isn’t always easy — but it is always worth it. Ready 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.
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