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Exploring The Potential Of Workforce Ecosystems

Several trends are shaping the future of the workforce: The nature of work is changing, in part driven by automation; organizations are breaking work up into projects that can be performed by people and machines – to create “super teams”; and employees continue to look for more autonomy, variety, and purpose in their work, which has given rise to opportunity marketplaces that more dynamically align people with work – including many worker types such as gig workers.  These seismic shifts have been further amplified by the global pandemic.

In this context, our annual MIT Sloan Management Review Deloitte Future of workforce report, Workforce Ecosystems: A New Strategic Approach to the Future of Work, found that 87% of global survey respondents say their organization defines their workforce in terms broader than just full-time employees – and this incorporates both people and machines. Respondents indicated the following shifts to their “workforce” over the next 12-18 months:

  • 56% expect technology for workforce augmentation (e.g., use of robots, chatbots, and other forms of intelligent automation) to increase;
  • 38% expect developers and/or accessory providers (e.g., organizations offering apps through an app store, hardware, and other tools and services that help get work done) to increase;
  • 32% expect contractors (e.g., gig workers and temporary workers) to increase;
  • 29% expect full-time/part-time employees to increase;
  • 28% expect external contributors to increase (e.g., crowdsourcing innovators, lead user innovators); and
  • 24% expect service providers (e.g., professional services companies being  imbedded into a project team or even loaned to a client for a specific time period) to increase as a category within their workforce.

Although the definition of “workforce” has expanded, current workforce management practices are still largely focused on full-/part-time employees, and while investment in this group will continue to be important, organizations will need to balance that investment with understanding and managing their total workforce. Our data shows that while respondents will rely more on external participants in the next 18-24 months, workforce strategies are not keeping up. In fact, only 28% of respondents say their organization is sufficiently preparing to manage a workforce that will rely more on external participants and 91% of respondents agree or strongly agree with the statement that “upcoming changes to our organization’s business strategy require our organization to improve its access to new capabilities, skill sets, and competencies.” The greatest challenge global organizations referenced in terms of this skills gap related to a need for digital, data, cloud, security, and other technology skills.

Workforce Ecosystems provide a new strategic approach

This is where workforce ecosystems can help to understand and unleash the existing skills, resources and potential across the entire existing workforce. Workforce ecosystems are a structure focused on anyone and anything that creates value for the organization including individuals, organizations, and technology. The approach provides a lens to look at how and where these different aspects of the workforce create value for the organization with the aim to understand interdependencies and develop management practices that work for the total workforce.

Workforce ecosystems can enable organizations to bring together separate workforce transformation programs – for internal employees, external participants, and automation programs – managed by different parts of the organization under a single umbrella. What’s more, organizations can better understand the various forms of value different aspects of the workforce bring. It shines a light onto their full potential for value creation, opportunities for building equity and areas where organizational design and governance will need to change to allow for greater interoperability between workforce and business strategy. To examine how management practices change in a workforce ecosystem, we can look at performance management and compensation and rewards.

Traditionally, organizations set annual goals aligned to specific roles, which are largely focused on full-time employees with individual performance metrics. Our research found that 73% of respondents agree or strongly agree with the statement, “my performance review is tightly linked to my organization’s overall strategic goals and objectives.” However, only 66% agree or strongly agree that team-based performance metrics are tightly linked to their organizations’ overall business strategy. What organizations are missing is thinking about how the broader team contributes to work getting done beyond the traditional individual worker. 

Performance Management and Compensation and Benefits

In a workforce ecosystem, organizations would look at performance management for internal and external workers together and would seek to understand the value they’re achieving from both humans and machines around similar types of work. Individuals – aligned more to projects than roles – could have continuous goal-setting and feedback with both individual and team metrics to evaluate their contributions and impact.

To give another example, traditionally many organizations still function with salary bands aligned to roles benchmarked against industry compensation numbers with medical and other benefits available to only full- and part-time employees. In a workforce ecosystem, compensation could be based on contribution with continuous flexibility to adjust as workers preferences change with the potential for micro-benefits related to health, retirement, and more. Workers can use micro-health insurance, for example, to pool resources together to reduce the expense for out-of-pocket expenditures.

Unleashing the workforce

Those who use workforce ecosystems understand that today’s management practices, systems, and processes need to evolve toward a more cohesive approach to workforce management. There will be implications across a wide range of workforce activities including strategy, leadership, culture, equity, and organizational design and governance. When respondents were asked who is responsible for developing and managing the organization’s workforce strategy: 56% said their CEO, 37% their CHRO, 26% their senior operating leaders, 23% their COO, 18% their senior HR leaders, and 12% their CFO among others ; this is indicative of how siloed current processes are and why the need to change. Forward-looking organizations have already started to think in workforce ecosystem terms in order to take advantage of these new trends, and unleash the potential of their total workforce.

Contributions from Robin Jones, principal at Deloitte Consulting LLP and Diana Kearns-Manolatos, senior manager, Deloitte Services LLP

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