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Making the Most of the Open Talent Economy

Both supply and demand are shifting in the global competition for talent. Much of this change is driven by significant shifts in the way business is conducted around the world, with exports and imports accounting for an ever-larger slice of global GDP and the elimination of geography as the primary determinant of access to labor markets.  But even as barriers dissolve, needs become more complex and harder to meet, creating the paradox of the global skills gap. According to recent estimates by the International Labor Organization, 40 million workers in the industrialized world are unemployed, and yet employers struggle to find people with the skills required for the roles they need to fill. [1]

What is the Open Talent Economy?

The open talent economy refers to the growing number of workers who operate outside traditional full-time employment status. The following figure illustrates the talent economy continuum as described by Deloitte Consulting. [2]

 One of the fastest growing segments of the open talent economy is the contingent workforce, defined as:

“A provisional group of workers who work for an organization on a non-permanent basis, also known as freelancers, temporary workers, independent contractors or consultants.”[3]

The market pressures creating this shift toward a contingent workforce are not all generated by global economics and cost-conscious employers: new entrants into the job market are looking for greater flexibility and autonomy in their work—and many are opting for freelance status to get it.[4] Interestingly enough, many millennials, who tend to be more risk averse than their parents’ generation[5], consider working as an independent contractor a way to reduce risk, since it allows them to avoid relying on a single employer for their livelihood.

Why the Contingent Workforce Matters to Employers

There are a number of reasons that employers need to be aware of these changes, not the least of which is the “war for talent.”[6] Of course, the open talent economy, more specifically, the contingent workforce presents both challenges and opportunities in that war.

Challenges:

  • A company’s reputation and network become even more important when seeking out freelance talent.
  • Companies who access the open talent economy need to cultivate the capacity to manage remote (sometimes very remote) workers. This includes tools, technologies and policies that enable remote workers to feel connected to the broader workforce.
  • The competition for good freelance talent can be fierce.
  • Organizations will need to master new approaches to recruiting that are more appropriate to freelance talent.

Opportunities:

  • Specific skills can be accessed as needed or on a project basis.
  • Companies can grow and shrink their workforce rapidly in response to prevailing needs and market conditions.
  • Salaries and facilities overhead can be reduced since excess workforce is not carried through downturns and many freelance and contract workers operate remotely.
  • The open economy pool of talent is global and can bring diverse perspectives into an organization that draws from it.
  • Participants in the open talent economy are pre-disposed toward collaboration and often bring a more entrepreneurial mindset to the workplace.

Why the Contingent Workforce Matters to Employees

From the perspective of employees, the open talent economy and the rise of the contingent workforce have a number of implications, including:

  • Job stability – The very nature of job stability is changing with the advent of the open talent economy. It no longer means working your way up the ladder in one organization. Today, job stability for freelance and contract workers comes from maintaining strong relationships with multiple employers, clearly communicating the skills you bring to the table and adding value through every engagement.
  • The rise of the enterprising employee – If work no longer means getting and keeping a job within the same organization for decades, and career advancement comes from consecutively more challenging roles (which may or may not be consecutively more senior), across multiple organizations—then employees need to rethink the word career. In such an environment, realizing your life’s work becomes a much more entrepreneurial venture.  Things like creating your brand, identifying your unique selling proposition (USP) and defining your market become part of your process.
  • Flexibility and growth – Finding an employer who builds opportunities for flexibility and growth into your job assignments is great. In the open talent economy, however, the enterprising employee doesn’t count on finding such an employer. The sought after employees of the future build those opportunities into their own process by seeking out challenges, engaging with experts and mentors, collaborating with peers, taking courses on their own time and being open to opportunities that let them explore new ideas.

During 2010, more than 25% of private sector jobs added in the U.S. were temporary. Although the economy has recovered somewhat since then, a significant percentage of new job growth continues to be in temporary and contract positions.[7] This trend is reflected globally and research shows that the open talent economy is growing and suggests that the contingent workforce is here to stay. To remain competitive, both employers and employees need to rethink the working relationship in this new context and better understand what it means for their collective future.

 

TribeHR provides a social, interactive platform to connect all your employees wherever and whenever they work. Try it free today!


[1] Oxford Economics (2012). Global Talent 2021: How the new geography of talent will transform human resource strategies http://www.oxfordeconomics.com/Media/Default/Thought%20Leadership/global-talent-2021.pdf

[2] Deloitte (2013). Why Reputations and Networks Matter in the Open Talent Economy. http://www.bersin.com/practice/Detail.aspx?id=16881

[7] Bureau of Labor Statistics. (May 4, 2012). Current Employment Statistics Highlights, April 2012, from http://www.bls.gov/web/empsit/ceshighlights.pdf


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Both supply and demand are shifting in the global competition for talent. Much of this change is driven by significant shifts in the way business is conducted around the world, with exports and imports accounting for an ever-larger slice of global GDP and the elimination of geography as the primary determinant of access to labor markets.  But even as barriers dissolve, needs become more complex and harder to meet, creating the paradox of the global skills gap. According to recent estimates by the International Labor Organization, 40 million workers in the industrialized world are unemployed, and yet employers struggle to find people with the skills required for the roles they need to fill. [1]

What is the Open Talent Economy?

The open talent economy refers to the growing number of workers who operate outside traditional full-time employment status. The following figure illustrates the talent economy continuum as described by Deloitte Consulting. [2]

 One of the fastest growing segments of the open talent economy is the contingent workforce, defined as:

“A provisional group of workers who work for an organization on a non-permanent basis, also known as freelancers, temporary workers, independent contractors or consultants.”[3]

The market pressures creating this shift toward a contingent workforce are not all generated by global economics and cost-conscious employers: new entrants into the job market are looking for greater flexibility and autonomy in their work—and many are opting for freelance status to get it.[4] Interestingly enough, many millennials, who tend to be more risk averse than their parents’ generation[5], consider working as an independent contractor a way to reduce risk, since it allows them to avoid relying on a single employer for their livelihood.

Why the Contingent Workforce Matters to Employers

There are a number of reasons that employers need to be aware of these changes, not the least of which is the “war for talent.”[6] Of course, the open talent economy, more specifically, the contingent workforce presents both challenges and opportunities in that war.

Challenges:

  • A company’s reputation and network become even more important when seeking out freelance talent.
  • Companies who access the open talent economy need to cultivate the capacity to manage remote (sometimes very remote) workers. This includes tools, technologies and policies that enable remote workers to feel connected to the broader workforce.
  • The competition for good freelance talent can be fierce.
  • Organizations will need to master new approaches to recruiting that are more appropriate to freelance talent.

Opportunities:

  • Specific skills can be accessed as needed or on a project basis.
  • Companies can grow and shrink their workforce rapidly in response to prevailing needs and market conditions.
  • Salaries and facilities overhead can be reduced since excess workforce is not carried through downturns and many freelance and contract workers operate remotely.
  • The open economy pool of talent is global and can bring diverse perspectives into an organization that draws from it.
  • Participants in the open talent economy are pre-disposed toward collaboration and often bring a more entrepreneurial mindset to the workplace.

Why the Contingent Workforce Matters to Employees

From the perspective of employees, the open talent economy and the rise of the contingent workforce have a number of implications, including:

  • Job stability – The very nature of job stability is changing with the advent of the open talent economy. It no longer means working your way up the ladder in one organization. Today, job stability for freelance and contract workers comes from maintaining strong relationships with multiple employers, clearly communicating the skills you bring to the table and adding value through every engagement.
  • The rise of the enterprising employee – If work no longer means getting and keeping a job within the same organization for decades, and career advancement comes from consecutively more challenging roles (which may or may not be consecutively more senior), across multiple organizations—then employees need to rethink the word career. In such an environment, realizing your life’s work becomes a much more entrepreneurial venture.  Things like creating your brand, identifying your unique selling proposition (USP) and defining your market become part of your process.
  • Flexibility and growth – Finding an employer who builds opportunities for flexibility and growth into your job assignments is great. In the open talent economy, however, the enterprising employee doesn’t count on finding such an employer. The sought after employees of the future build those opportunities into their own process by seeking out challenges, engaging with experts and mentors, collaborating with peers, taking courses on their own time and being open to opportunities that let them explore new ideas.

During 2010, more than 25% of private sector jobs added in the U.S. were temporary. Although the economy has recovered somewhat since then, a significant percentage of new job growth continues to be in temporary and contract positions.[7] This trend is reflected globally and research shows that the open talent economy is growing and suggests that the contingent workforce is here to stay. To remain competitive, both employers and employees need to rethink the working relationship in this new context and better understand what it means for their collective future.

 

TribeHR provides a social, interactive platform to connect all your employees wherever and whenever they work. Try it free today!


[1] Oxford Economics (2012). Global Talent 2021: How the new geography of talent will transform human resource strategies http://www.oxfordeconomics.com/Media/Default/Thought%20Leadership/global-talent-2021.pdf

[2] Deloitte (2013). Why Reputations and Networks Matter in the Open Talent Economy. http://www.bersin.com/practice/Detail.aspx?id=16881

[7] Bureau of Labor Statistics. (May 4, 2012). Current Employment Statistics Highlights, April 2012, from http://www.bls.gov/web/empsit/ceshighlights.pdf


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