The Future of Contingent Work Has Arrived
In the workforce industry, 2015 became a watershed year. We witnessed the rise and durability of the sharing economy, the role Big Data will play in our professional and private lives, and, for the first time in decades, a serious debate by legislators to reform labor regulations that were once considered immutable. All of these issues affect and are influenced by today’s talent, who are forging their own paths in a business world that’s lost its traditional contours.
Borders, both physical and ideological, are disappearing. Workers are setting their own schedules, choosing their employers and determining their own work arrangements. They rely less on the auspices of corporations and more on their entrepreneurial spirit. For today’s talent, the notion of career has morphed into a pursuit of independent success — a means to an end, rather than the end goal itself. According to research by Ardent Partners, “95 percent of organizations today perceive their contingent workforce as important and vital not only to day-to-day operations, but also to ultimate enterprise success and growth.”
It seems contingent labor has reached an inflexion point, and the future is here: non-employee professionals have become just as critical as traditional labor. It’s equally valuable to point out that the millennial generation, now the largest population of our workforce, is creating this new dynamic. These digital natives engage and interact with their world differently than their predecessors. They lead online lives. They rely on mobile technology to accomplish their work, both on the job and at home. And they’re turning to non-traditional employment arrangements to satisfy their work-life goals. That’s why I want to look at some of the positively disruptive technologies that will shape 2016, and how they will alter the way we connect with talent.
Millennial Sensibilities are Powering the Gig Economy
Depending on the news day, the gig economy may have more opponents than champions. A few people in the workforce, particularly those who felt forced into contingent labor as a result of the last recession, lament the diminishing interest companies are paying to traditional employment. In reality, though, it’s unfair to place the blame squarely on organizations attempting to operate leaner and cheaper. If you look at the statistics, it’s easier to make the case that talent themselves are becoming more entrepreneurial and independent — and that they’re the true impetus for the evolution of the sharing economy.
Consider the data published in ERE Media by Paul Wolfe, the senior vice president of human resources for Indeed: “Our research shows that 65 percent of adults look at new jobs within 91 days of starting a new job, and 44 percent subscribe to job alerts, employed or not.” Wolfe included this detail while making a solid case for cultivating retention, yet it also illustrates how modern talent no longer view jobs as long-term careers. Roles today, across generations, are viewed more like a series of networked tasks or projects. The economic downturn affected people differently. Today’s professionals, either through feelings of powerlessness or the need for control, want to pilot their own courses.
Also take into account the number of independent contractors, which climbs by the day. According to research conducted by the American Action Forum, the growth of independent contractors increased between 8.8 and 14.4 percent from 2002 to 2014. Then we have a recent survey of HR professionals from the Society for Human Resource Management (SHRM). Within the next 10 years, 40 percent of organizations believe they will be turning to project-based employment models. Close to 30 percent went further, saying they plan to adopt more non-traditional arrangements that include “the freelance, need-based employment model that stipulates the competencies needed to perform a job with no defined formal project, task or role.”
China Gorman, former SHRM CEO, observed: “Organizations are looking at the long-term financial ramifications of having full-time employee commitments and this newest generation coming up is saying, ‘I don’t want a full-time job. I want to be my own boss and work on projects that interest me and fit my skills, and autonomy is more important to me than structure and security.’” The ability to source, recruit, develop and engage these workers on their terms will be imperative.
Digital Connections Help Recruiters Forge Real Relationships
This year saw pioneering advances in social, digital ecosystems that transcended the ways talent integrated with their peers, employers, recruiters and society. Social recruiting technologies not only define contemporary job seeking and candidate search processes, they are poised to become the most efficient methods for building relationships and forming meaningful connections. Yet Facebook, Twitter and LinkedIn are no longer the hottest potential talent communities. Successful recruiters are turning to less traditional channels such as Snapchat, Pinterest, Vine, Instagram, Viber, Periscope, Meerkat, Blab, WhatsApp, Line and others.
The allure of social networks comes from the immediacy and on-demand access they provide. They are mobile, like the lifestyles of their users. That’s a crucial theme. This year, companies that fail to create mobile-friendly job tools will be left behind. According to Pew Research, 40 percent of job seekers rely on mobile devices exclusively when scouting and applying for positions. That figure rises to 53 percent among 18- to 29-year-olds. Close to 80 percent of U.S. candidates said they would apply for jobs on their phones if HR tech companies streamlined the process and launched platforms designed specifically for the mobile experience. Unfortunately, many companies settle on trying to fit their existing websites into smartphone and tablet sized browsers.
Shockingly, only 10 percent of Fortune 500 businesses currently support a truly mobile-friendly application process. Even executives at Monster admitted that 60 to 70 percent of candidates applying to positions will never complete the process. The situation becomes even more dire when you consider Google’s April 2015 announcement that it will downgrade sites that flunk the mobile responsive test. Experts estimate that over 80 percent of company sites could be adversely impacted by these new algorithms and penalties.
Anyone who wants to reach and engage prospects must champion a positive mobile experience. And that’s why we’ll see job board giants like CareerBuilder and Monster pushing to develop responsive portals with simplified and compelling apply processes. That also means we’re going to see the advent of new tech pioneers following in the footsteps of companies like Switch, Jobr, Blonk, Weave and even eHarmony.
Has Email Become 2016’s Snail Mail?
Email isn’t actually going the way of the dodo — or the Pony Express. It will endure as a hardy communications resource, yet it’s losing ground on some key fronts. Email is no longer an efficient way to engage today’s generation of talent. Texting candidates, for instance, is on the rise. According to Software Advice, 43 percent of Millennials now consider SMS messaging a professional recruitment approach. Yet what about the role of email inside the workplace? Are today’s talent content to abandon social media once they arrive at the office? The answer is “probably not.”
I believe another technology disruption is going to occur internally, at a corporate level. Compared to social media, email simply isn’t as conducive to encouraging talent to share ideas, participate in branding exercises, evangelize the work culture externally, collaborate on projects in real time, or promote visibility to performance across the enterprise. The most progressive and productive organizations will be early adopters of enterprise social networks. And platforms are popping up already. Facebook at Work, Tibbr, HipChat, Slack and Jive are quickly gaining a following within companies of all sizes. Last year, for example, Slack reached two million users. It forged a niche in the market by appealing to companies that had become frustrated with sorting through countless daily emails.
VMS 3.0
Among HR technology platforms, vendor management systems have proven the most adaptable. Over the past decade, they’ve evolved to integrate with other workforce technologies. Leading VMS infrastructures no longer limit their focus to staffing partners and their talent — they now incorporate automated processes for handling direct-hire applicant tracking, Statement of Work (SOW) and services spend, online recruitment, independent contractor compliance and administration, social recruiting and more. Regardless of the labor category facilitated, VMS tools bring the added benefit of a governance process that helps MSPs ensure compliance with various labor regulations and tax standards.
This year, cutting-edge VMS providers could be adding freelancers into their mix. As the gig economy began to gain steam a couple of years ago, we saw the stirrings of a decoupling between employees and consumers. That spurred the emergence of online recruitment platforms, which gave rise to freelancer management systems (FMS). FMS software supports enhanced controls, transparency and access to freelance talent. These platforms allow businesses to manage the entire lifecycle of a freelance engagement, from procurement to payment. According to Aberdeen Group, FMS software helped companies reduce annual labor costs by 16 percent, improve visibility by 32 percent and realize a compliance rate of 93 percent.
So what does this mean for VMS providers? As Gartner predicted last January in its “Getting Ready for the Next-Generation Workforce and the Impacts of the Freelance Economy” report, the expanding use and classifications of contingent workers will pressure enterprises to “ensure effective governance, risk and compliance strategies.” With that observation, Gartner further suggested that “market momentum will force VMS vendors to develop next-generation solutions that complement and support freelance marketplaces.”
There’s Much More in Store for 2016
Over the coming weeks, I’ll continue to explore the topics, paradigm shifts, disruptions and emerging advances that will sculpt the workforce of 2016 and beyond. And I’d love to hear your ideas and share insights. If you’re attending the VMSA Live event in Florida on February 10, please join me for an engaging discussion about these topics and more. My first speech, “Crowdstaffing: The evolution of talent acquisition,” takes place at 11:30 a.m., followed at 1:15 p.m. by my interactive session on “Trends, Disruptors and Technology.” I hope to see you there!