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Leveraging The Skilled On-Demand Workforce: From Opportunity To Strategy

Dean Glas is CEO of SellX, a modern sales platform connecting companies with an on-demand elite remote sales force to drive revenue.

The Covid-19 pandemic has accelerated some of the most powerful trends affecting businesses today, including the ongoing need for digital transformation, the normalization of remote work and the rise of the skilled on-demand workforce. Facing crucial talent shortages, high-growth startups and large enterprises alike have embraced a new generation of online talent platforms to meet their needs quickly and efficiently. While the 2009 Great Recession gave rise to the “gig” economy, the last five years have seen a surge in high-value project-based work done by specialists in every area of the enterprise, from software engineering and design to project management, finance, sales and even fundamental innovation. Platforms like Toptal, Catalant, Innocentive and Upwork help companies find and hire these freelancers.

The On-Demand Workforce

In the comprehensive 2020 study Building The On-Demand Workforce, Prof. Joseph Fuller and team at Harvard Business School, in partnership with BCG, cite some eye-opening data points:

• As of September 2020, 36% of the U.S. workforce performed freelance work in the last 12 months.

• From 2009 to 2019, the number of skilled talent platforms grew from 80 to 330.

• 60% of business leaders surveyed reported medium to extensive use of these digital talent platforms.

• Almost 90% of leaders believe that talent platforms are somewhat or very important to their organization’s future competitive advantage.

This last point is perhaps the most telling: A vast majority of CEOs view using skilled on-demand workers as an important source of strategic advantage. Despite this fact, currently, most companies are using skilled freelancers in a reactive, ad-hoc way rather than as an organized strategy. What are the benefits of using this skilled on-demand workforce, what are the challenges holding companies back from getting the most out of these workers and what can companies do to overcome these challenges?

In the HBS/BCG report, leaders surveyed cited the primary benefits of using skilled talent platforms as increased productivity, faster speed to market and improved quality of innovation. It’s like being able to access human resources “in the cloud.” In the same way that cloud computing and SaaS have revolutionized the flexibility and scalability of technology infrastructure, talent platforms can do the same for sorely needed human talent. Hiring highly skilled workers can take several months, and then recruits might be paid for several more months before the company discovers the employee is not a good fit. Instead, companies can now quickly find workers with exactly the skills they need, onboard them efficiently and scale a team up (or down) in response to market demands.

Challenges To Integrating On-Demand Talent

For high-growth startups, it’s easy to see how on-demand skilled talent platforms can be a game changer. What’s equally compelling is how established companies are using crowdsourcing innovation platforms to do research and development.

As the pool of skilled freelancers continues to grow (51% of all workers with post-graduate degrees now freelance, according to a recent report by Upwork), why haven’t more companies embraced using these platforms?

The blockers are predominantly cultural and organizational. A contradiction outlined by HBS/BCG is that while C-level executives were very positive about using on-demand skilled talent, senior managers and especially HR leaders were not. This makes sense, because they are the ones dealing with the messy challenges of implementation: What is the nature of the work? How is it organized? How is it measured and rewarded?

In addition to these organizational challenges, there are cultural ones: Many in-house workers can feel threatened by outsiders and find it difficult to bond with freelancers. One fascinating example cited by Fuller and his team was NASA, where crowdsourcing innovation ideas didn’t just threaten engineers’ sense of job security, but also their identity. They are NASA engineers: Inventing and building new things is what they do, and they do it better than anyone else. The last thing they wanted to admit was that they needed help, or that someone outside of NASA could have (gasp) better ideas!

Recommendations

So, what are some practical recommendations to help companies integrate skilled on-demand talent as a core business strategy?

1. Make everything explicit and documented, with an obsessive focus on clarity. Much shared knowledge in organizations is implicit and learned over time through hundreds of close interpersonal interactions, from the broad cultural questions of “why we do things” to the specifics of “how we do things.” Managers need to make this shared knowledge explicit—in writing and, even better, in video. Documenting everything forces clarity, which makes it much easier to onboard outsiders and help get them up to speed on how to interface with the company.

2. Break down work into discrete, granular components. This is a key recommendation of the HBS study, and it is consistent with the overall theme of clarity. By breaking up the work into very specific, very clear components that can be understood more easily, managers can more easily and effectively bring in newcomers and have them be productive immediately. Documenting these more specific work flows and having systems in place to manage them is crucial. The true test for a manager is: If a worker got sick in the middle of a project, could another one step in and take over without any interaction, just based on documentation and the clarity of the task?

3. Do everything in systems. With the SaaS revolution, there is a plethora of tools to manage remote and/or freelance work, whether Slack for collaboration or Asana for project management or Gusto for paying contractors.

While many of the established digital talent platforms are simple marketplaces to connect companies to workers, there are now next-generation platforms which have built-in systems and tools to not just match companies with talent, but help them onboard and manage these workers effectively. (Full disclosure: My company offers such a platform.) If a company is willing to embrace the cultural and organizational challenges in integrating the skilled on-demand workforce, the results can be truly transformative.


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