When it comes to direct sourcing, even the most basic programs can indeed yield tangible value, yet the stakes are higher than mere cost reduction and talent pipeline expansion. While these remain fundamental aspects, strategic approaches have evolved significantly since the concept’s rapid ascent years ago. In 2024, however, direct sourcing transcends its components; it embodies alignment with current and future business trajectories. Amidst an unsettled labor market and prevailing economic uncertainty, businesses engage in an ongoing battle for talent, confronted by historically low unemployment rates and millions of unfilled job openings. Concurrently, the Future of Work movement necessitates a shift in hiring strategies. Together, these factors present both a challenge and an opportunity for direct sourcing: enabling enterprises to foster a flexible and scalable workforce that sustains genuine talent development…and, more importantly: talent sustainability.

Over the past four years, direct sourcing has emerged as a dominant force in talent and workforce discussions, offering businesses a flexible avenue to engage directly with talent. Its profound impact on candidate experience, referral management, and talent community development has revolutionized how workers interact with potential employers, automated referrals, and cultivated on-demand talent pools. Additionally, direct sourcing leverages AI-driven technologies to enhance talent acquisition processes, streamlining candidate matching, assessment, and engagement, thereby optimizing recruitment outcomes.

As a preferred strategy for achieving genuine scalability and talent sustainability, direct sourcing aligns with organizations’ strategic goals, ensuring long-term prosperity by fostering employee engagement, development, and well-being. In addition, embracing socially responsible and ethical talent management practices further enhances workforce sustainability and equity, benefiting both the organization and its employees.

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Hoping that the Future of Work Exchange‘s readers, community, and partners enjoy the Great North American Eclipse today.

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Growth in Data Science & Analytics Category

What skills are needed now and in the future? Upwork, the world’s work marketplace connecting businesses with independent talent, released its report “In-Demand Skills 2024” highlighting the critical skills workers need across a variety of categories. The report revealed that Data Science & Analytics is one of the fastest-growing work categories as generative AI modeling and machine learning produce strong demand from businesses. Upwork revealed that the AI and machine learning subcategory on the company’s platform saw 70% year-over-year growth in the fourth quarter of 2023, as clients and independent professionals collaborate on today’s most cutting-edge projects.

The Upwork report identified several fastest-growing work categories and skill sets where contingent labor can deliver the greatest value. As the examples below illustrate, artificial intelligence and automation in general are heavily sought after for 2024 and beyond.

• Data Science & Analytics — Top 3 Fastest-Growing Skills: Generative AI Modeling, Machine Learning, Data Analytics
• Coding & Web Development — Top 3 Fastest-Growing Skills: Scripting & Automation, Database Development, and Web Design
• Sales & Marketing — Top 3 Fastest-Growing Skills: Marketing Automation, Sales & Business Development, Email Marketing.

This year’s “In-Demand Skills” report noted several new skills emerging in the top 10, including medical and executive virtual assistance, as well as development & IT project management and digital marketing campaign management.

Skills-Based Hiring in the Age of Emerging Tech

With the demand for specific skills, organizations are turning more toward skills-based hiring to meet their workforce needs. According to Kelly Monahan, managing director of the Upwork Research Institute, “Every company is vying for the best talent and there remains huge demand for a broad range of skills across the Upwork marketplace as businesses big and small are finding solutions in the growing reservoir of skilled independent professionals,” she said.

“In 2024, emergent technologies like generative AI are having a major impact on the skills-based economy. Of course, business demand for these types of skills is increasing, but we’re also seeing a complementary impact, whereby AI technology is driving greater demand for all types of work across our marketplace,” Monahan added.

Growing Demand for AI Expertise

Monahan’s comments also align with the current influence of AI on the workforce. According to a report released by the International Monetary Fund (IMF) entitled, “Gen-AI: Artificial Intelligence and the Future of Work,” nearly 40 percent of global employment is exposed to AI. As more solution providers integrate artificial intelligence into their offerings, that percentage is likely to increase. Enterprises are turning to AI to streamline business processes and automate tactical tasks that provide workers with more time for strategic planning.

This is good news for freelancers and contractors upskilling or with existing expertise in artificial intelligence, machine learning, and data analytics. According to Jacqueline DeStefano-Tangorra, an AI consultant on Upwork, “As technology rapidly changes and more specific expertise is needed, more and more businesses are coming to Upwork to find the solutions they need,” she said.

“Consequently, the demand for my skill set has never been higher. Upskilling and becoming an AI professional on Upwork has opened many doors. I get to work on interesting projects and I am a stronger partner for my clients as I’m more efficient, productive, and can deliver better outcomes,” DeStefano-Tangorra added.

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While early VMS iterations primarily served as automated procurement tools for staffing suppliers, these platforms have metamorphosed into the central “nexus” dictating all aspects of contingent and extended workforce management. Contemporary VMS solutions not only harmonize effortlessly with the principles of the Future of Work movement but also showcase remarkable advancements in navigating the intricacies of the modern workforce. In today’s dynamic, globalized technology market, Vendor Management Systems play a decisive role in charting the course of the “extended workforce.” This term encapsulates the next evolutionary phase, and modern VMS platforms have made substantial leaps in aligning with this progressive paradigm.

Ardent Partners and the Future of Work Exchange are excited to announce the publication of the 2024 edition of its VMS Technology Advisor report, the market-leading guide designed to help procurement, HR, human capital, and talent acquisition executives navigate the complex and mature VMS solutions marketplace. The new report analyzes and assesses the primary VMS solution providers in the marketplace today and offers a variety of strengths, considerations, and market fits for each VMS platform evaluated as part of the rigorous research study.

For procurement, HR, and talent acquisition executives, and especially leaders tasked with managing extended and contingent workforce programs, this is the go-to guidebook for VMS solution selection. Access the report here.

The post Announcing the “2024 VMS Technology Advisor” Report appeared first on The Future of Work Exchange.

Click to listen to the full interview. Note that this excerpt has been edited for readability.

Christopher Dwyer: For this week’s edition of The Future of Work Exchange Podcast, I’m thrilled to welcome Christy Forest, CEO and executive director at LiveHire, for a discussion about the current and future state of direct sourcing, the role of skills-based hiring, and the ever-decisive concept of total talent management.

Christy, you’ve been in our space for a long time and have first-hand knowledge and expertise in our industry. Things are evolving rapidly, particularly workforce technologies which are very transformative these days. What are your thoughts on the workforce solutions market in general?

Christy Forest: The workforce solutions market is constantly evolving. It is this intermix of technology and humanity and all these different players in the ecosystem. Today, we’re seeing some structural shifts in skills coming through. And that’s about as old as time in how often that occurs. However, what’s different is that everything truly happens faster. It’s all about agility for corporates. We experienced this with COVID-19 in such a short period where some companies boomed and others busted. Presently, even if hiring is down, it’s the opportunity to adopt approaches that ready you for the rebound.

Organizations just keep pedaling hard and fast. And the workforce solutions industry is evolving rapidly to keep pace with that. We’re at a moment where executives are asking how they can move faster and smarter and evolve their organizations in the face of such change. Looking at the workforce solutions market through the lens of technology, it’s about what gives you visibility and data for insight to make good decisions as well as what gives you candidate and staff engagement because the (candidate and employee) power has shifted forever. It’s not going back. I think about those three things — the insights from data for better decisions, the engagement, and the speed of outcomes — that’s agility. Executives who are thinking about how they’re transforming in the face of change and partnering across the ecosystem are experiencing the evolution firsthand.

CD: Let’s shift now to direct sourcing. Data, intelligence, agility, and scalability are all hallmarks of direct sourcing. LiveHire has been a direct sourcing pioneer for over a decade. Where are we at with direct sourcing from a place of technology, maturity, and the like?

CF:  It’s certainly been interesting to see the maturity and the evolution. One of the great things is the convergence on the definition of direct sourcing, which is a milestone in many ways. Along with this is also the commitment to scale when undertaking direct sourcing — it is not solely about cost savings. Scaling is so important and powerful.

At LiveHire, we make data-driven decisions and consider how our technology faces off at scale and delivers outcomes. For one client, we built a talent community of nearly 100,000 candidates within a year. Achieving a powerful talent community gives you quality and scale. When thinking about direct sourcing at scale and how our technology faces off, we’re constantly interrogating our data and examining it at a precise level  level — how to achieve stronger recruiter productivity and candidate experience. Doing so at scale is what leads to corporate results.

CD: Defining direct sourcing is not straightforward. Simply having a curation partner or technology to build talent communities is not enough for a successful direct sourcing program. You need more than that. How can businesses be truly successful at direct sourcing?

CF: You first need to focus on the fundamentals. Be clear about direct sourcing and that it’s more than redeployment in a small part of your talent program. It is leveraging your brand at scale. There are three legs of the stool widely discussed: technology, a curation partner, and an EOR. You must have those pieces of the puzzle. However, go the next step and be willing to engage the hiring managers and drive an expectation and commitment to the program to establish a priority window and help the organization feel confident as the talent pools build and scale. We have found that an MSP can be a very strong partner in this effort. TAPFIN leads and champions this for its clients and does it very well. Having that dialog and success conversation that’s led by the data and insights relative to the talent in the pools is vital. Those are the biggest factors we’ve seen.

CD: As we look at the future of direct sourcing, where does it go from here? And why does it go there?

CF: The future needed now is if you’re not doing direct sourcing using your brand and adopting it at scale, then start there. Create a world where stronger candidates fit with the organization as well as offer a better experience for the candidate and hiring manager — and do it with cost savings in mind. What evolves from that is more data and insight into the potential of your workforce. The  question is how do we use this information to lift our competitiveness? This opens an opportunity for HR and procurement to come together in a powerful way to answer that question. Ultimately, you want to bring those answers to the executive committee and the board showing how direct sourcing increased the enterprise’s competitiveness by being smarter with the data available and knowing what needs development to win. Candidate pools, skills, and on-demand insights help lead that conversation. This ultimately takes us back full circle to where you’ve got agility.

Click HERE to access the full podcast.

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At its core, digital staffing technology represents solutions that empower enterprises to hire freelance, independent, and contingent talent without the need for intermediary systems or suppliers. These solutions traverse beyond just the recruitment process; they encompass end-to-end workforce management, encompassing vital components such as project management, worker tracking, worker classification, compliance, and risk mitigation. In essence, digital staffing technology is a multifaceted approach that revolutionizes how companies access, engage, and manage their extended workforce (which, as FOWX research has found, comprises upwards of 49.5% of the average company’s total workforce).

As 2024 rolls on, it becomes abundantly clear that digital staffing technology is no longer confined to the basic online talent portals and freelancer networks that once characterized its typical candidate reach. Instead, today’s digital staffing platforms have morphed into full-fledged workforce management automation tools. They not only facilitate candidate engagement but also play pivotal roles in talent community development, talent pool creation, candidate experience management, and other progressive facets of extended workforce management. These platforms have transcended the boundaries of simple talent acquisition and have ushered in a new era of efficiency and innovation in workforce management.

Ardent Partners and the Future of Work Exchange recently discovered that utilization of digital staffing solutions has experienced an exponential growth of nearly 800% over the past five years. This statistic is nothing short of a testament to the profound impact these platforms have had on the Future of Work movement and the broader world of work and talent. It signifies a paradigm shift in how businesses approach talent acquisition and workforce management, reflecting an industry-wide recognition of the potential and benefits that digital staffing technology brings to the table.

One of the most significant drivers behind the rapid adoption of digital staffing technology is the pressing need for organizations to be more agile and adaptive in an ever-changing business landscape. The Gig Economy, remote work trends, and the desire for flexible talent solutions have all converged to make digital staffing technology a paramount consideration for forward-thinking enterprises.

These platforms provide companies with the agility to scale their workforce up or down as needed, ensuring they can swiftly adapt to market shifts or unforeseen challenges. Moreover, they grant organizations the power to tap into a global talent pool, unlocking an unprecedented level of diversity and expertise. In an era where talent is a critical competitive advantage (and often an enterprise’s top differentiator), these solutions empower businesses to secure the best-fit talent, regardless of geographical constraints.

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Four years ago at this time, many of us (well, let’s be honest: all of us) were focused on the most critical of all Future of Work accelerants: remote and hybrid work. Who could know back then that this would open the floodgates into new and exciting ways of structuring workplace environments?

The Future of Work Exchange has oft-discussed this concept of “acceleration” in that pandemic-era restrictions, and, by consequence, the forced changes of how we work, pushed enterprises across the globe into a new era of work optimization.

With our backs against the proverbial wall, we responded by innovating. And by innovating, we continued to transform how we work, when we work, and where we work.

With nearly a quarter of 2024 in the books (time flies, doesn’t it?), the landscape of Future of Work-led shifts within the workplace (and how we work) represents the true fluidity of this movement; as technology continues to progress and as businesses seek to innovate around the areas of proficiency, efficiency, and productivity, we can anticipate a continuous evolution in the workplace dynamics, such as:

• The much-vaunted four-day workweek. The Exchange’s John Yuva wrote about this strategy in 2023, finding that four-day workweeks “lead to lower stress levels as well as a happier and more loyal workforce,” as well as a major increase in productivity. The issue keeping the strategy from adoption, though? The vertical-to-vertical adherence to four days instead of five means that there’s a gap in customer- and client-facing servicing, leaving managers to struggle over another staffing issue in an era when the labor market is already volatile.
• “Chronoworking” as a potential workplace disruptor. Chronoworking is innovative as it aligns work schedules with individuals’ peak productivity times, optimizing performance and creativity. However, its adoption can be challenging due to the need for a shift in traditional work paradigms, potential resistance from established routines, and the necessity for effective communication and coordination among team members following varied schedules
• The convergence of new workforce generations and the importance of workplace culture. With Boomers mostly out of the workforce and Gen Xers approaching the last decade or so of their careers, it means that millennials and Gen Z workers represent the majority of today’s talent. Although this shift has been happening in some capacity over the past few years, the newer blend of workers means that there’s the utmost pressure on leaders to shore up workplace culture and ensure that the “work experience” meets the evolving requirements and desires of the younger generation.
• The impact of AI on the workplace. Artificial intelligence is the next great level of innovation, with generative AI as its calling card. Generative AI is poised to revolutionize the future workplace by automating complex tasks, fostering creativity, and enhancing overall efficiency. Through its ability to autonomously generate content, solutions, and insights, generative AI will free up human resources to focus on higher-level decision-making and innovation. This transformative technology holds the potential to reshape workflows, streamline processes, and create a more dynamic and adaptive work environment, ultimately driving increased productivity and competitiveness in the evolving landscape of the modern workplace.

The post The Fluidity of the Future of Work appeared first on The Future of Work Exchange.

However, essential to employee experience is understanding that it goes beyond employee satisfaction. Rather, it is a strategic imperative that directly influences organizational culture, success, and the ability to navigate an ever-changing business landscape.

Employee Experience Begins and Ends with Engagement

A core element of employee experience is engagement — with a lack of engagement consequential to an enterprise. For leading organizations, engagement begins in the recruitment/hiring phase where an emphasis on desired skillsets and cultural alignment contributes to talent retention; engagement is then prioritized through the last day of employment with workers serving as enterprise ambassadors in their next opportunity.

What are the consequences of low employee engagement? According to an article by Jim Harter, Ph.D., Chief Scientist, Workplace for Gallup, a 2023 survey of U.S. employee engagement of full- and part-time employees showed a 1% decline between mid-year (34%) and end-of-year (33%). This reflects an overall contraction of 3% compared to the annual high of 36% in 2000 when Gallup first began reporting U.S. employee engagement statistics.

A 1% mid-year decline and a 3% overall-high decrease may seem minuscule, but Harter points out the significance. “Each percentage point gain or drop in engagement represents approximately 1.6 million full- or part-time employees in the U.S.,” he writes. “Trends in employee engagement are significant because they are linked to many performance outcomes in organizations. Not engaged or actively disengaged employees account for approximately $1.9 trillion in lost productivity nationally.”

The bigger observation from the Gallup survey is that nearly 70% of organizations are not actively engaging with workers. This presents an even bigger challenge for their talent retention, productivity, and market competitiveness efforts.

A Thriving Employee Experience

Employee experience begins with a culture shift — one with an intentional and sustainable foundation. It is not a finite strategy, but rather an evolving enterprise mission. Today’s Future of Work paradigm encompasses many elements that contribute to a successful employee experience approach. The following are EX areas that can have the greatest benefit to an organization’s success, productivity, and overall well-being.

Remote and hybrid flexibility. Here at FOWX, we’ve talked extensively about remote and hybrid work. Since the pandemic, the flexibility to work remotely has become one of the biggest EX benefits. Many organizations made remote/hybrid work models a permanent choice for employees. However, over the last year, several of these same enterprises pulled back on remote work and implemented return-to-office mandates. The employee response was swift in some cases, with workers publicly protesting these decisions. Studies have shown that productivity increases with remote/hybrid work models and leads to improved employee well-being. Organizations should focus on providing tools that foster virtual team-building activities and creating policies that support work-life balance.

Employee empowerment. When workers are empowered to perform their jobs and advance their skillsets, it instills a sense of trust and greater employee satisfaction. As more organizations pursue digital transformation, they introduce new workflow technologies and platforms. These technology investments are to streamline processes, enhance productivity, and enable global collaboration. To thrive in this evolving digital environment, business leaders should empower workers with continuous learning opportunities, such as right-skilling, upskilling, and other training programs. This “people” investment contributes to a more positive and productive employee experience.

DE&I focus and promotion. Despite growing criticism and legislation surrounding diversity, equity, and inclusion (DE&I) initiatives, workers continue to value enterprises that actively promote DE&I and implement policies and programs to address existing gaps. Younger generations in particular expect organizations to align with societal expectations through the integration of diverse hiring practices and unconscious bias training. Such programs not only create a workplace where workers feel valued, respected, and recognized but can lead to higher levels of engagement and innovation.

Human-centric culture. When organizations prioritize their employees, the culture reflects this by placing importance on employee mental health and well-being. This generally requires empathetic leadership capable of addressing work-life balance issues that can lead to stress and burnout. A human-centric culture is an employee experience-first workplace, offering remote work opportunities, setting boundaries for work-related issues, providing mental health services and encouraging their use, and fostering a check-in management approach whereby managers meet with team members weekly to evaluate workloads and gauge overall well-being.     

Employee experience is a central Future of Work topic that FOWX will continue following. How enterprises approach EX amid growing in-office mandates and DE&I criticisms is yet to be seen. However, there’s little denying that EX is an underlying factor in business success. At the end of the day, employees are the lifeblood of enterprises. How workers perceive their organization and culture is significant to productivity outcomes and overall organizational health. In today’s modern business environment, EX is essential.

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Direct sourcing began to take off as a means of nurturing talent communities and developing a near-self-sustaining source of on-demand expertise. Skills-based hiring emerged as a way to look “beyond” costs and pay rates to revolutionize how enterprises innovative and leverage next-generation skillsets.

Empathy-led leadership and emotional intelligence became crucial endeavors to separate the successful leaders from those that would eventually lose their staff to the Great Resignation. And, of course, the most famous Future of Work accelerant of all, remote and hybrid work, drew most of the spotlight and headlines.

In the wake of social distancing and quarantines and general fear of spreading a once-in-a-lifetime virus, many businesses (that could do so) quickly transitioned to a remote-first infrastructure. This, of course, raised numerous challenges, from issues with trust to concerns over worker productivity. As we know by now, the move to a hybrid workplace resulted in more benefits than drawbacks: in addition to staff having more control over their schedules, they also found that work-life integration vastly improved, as did overall wellness and satisfaction with their leadership, teams, and general everyday business lives. (And, of course, we covered all things remote work here on the Future of Work Exchange.)

While there were very early opponents of the remote work model (hi, Elon) and others that continued to rebel against the thought of workers being at their home offices (James Gorman, we see you), there was a clear and resounding outcome: remote and hybrid work would forever be a foundational element of the world of work.

Four years now removed from the beginning of the pandemic and three years since the arrival of highly-effective vaccines (not to mention two-plus years since the first inklings of “normalcy”), businesses have spent the past 18 or so months dabbling in “return-to-office” mandates that have essentially divided enterprise leaders, with some calling for extreme, pre-pandemic office structures and others sticking to pandemic-era hybrid formats.

While the benefits of both remote and hybrid workplaces are proven and abundantly clear at this stage, the hard truth is that, at some point, companies were bound to slowly increase the number of required days in office, regardless of their stance on RTO mandates.

The business arena of 2024 is the closest we know that resembles pre-pandemic life, and, as such, represents an opportunity for enterprise executives to harken back to those days when offices were bustling and proximity collaboration was an everyday occurrence. However, as stated here on the Exchange in the past, there’s no shoving that genie back into the bottle; workers and professionals not only desire the benefits of remote work, but have also learned the best ways to balance work-life integrational attributes within this model over the past few years.

Today, business leaders are engaged in a tug-of-war with their staff over RTO mandates and the best possible means of balancing “required in-office days” with ensuring workers want to come back to the office. And there’s a major aspect here that is critical to the future of in-office and traditional workplace structures: culture.

“Why would people abandon the comfort of their routine for a commute to the office? Culture is the answer. It’s the way they are treated upon arrival, the atmosphere of the building, and the motivation they feel from leaders and their fellow team members. Culture is empowering and dictates success, fueled by the everyday people who create it,” says Jim Love, Director, Strategic Client Solutions at Talent Solutions TAPFIN.

The very essence of an organization’s identity, values, and camaraderie is intricately tied to its culture, and this moment in time, when RTO mandates are becoming a norm, demands a deliberate and strategic approach. A thriving workplace culture is not merely a byproduct but a catalyst for productivity, innovation, and employee well-being. As employees transition back to shared physical spaces and traditional workplace environments, the culture sets the tone for collaboration, engagement, and a sense of purpose.

“Culture isn’t one thing. It’s all the small things. And it doesn’t start at the top down. It starts when you smile at the front desk associate. Or when you thank the maintenance staff for the great work they do. Those compounding and small-but-mighty actions are what make people want to feel part of something bigger. Give them a reason to come back – make it ingrained in who you are as an organization,” says Love.

Neglecting the critical role of workplace culture in return-to-office mandates risks creating a sterile environment void of inspiration, hindering the potential for collective achievement and sustained success. In this pivotal juncture, organizations must not only welcome employees back to their desks but reinvigorate them with a vibrant, inclusive, and empowering culture that fuels the journey ahead.

Adds Love, “Don’t just acknowledge and appreciate culture…create and sustain it. Preach your culture, and when necessary, use words. It is the foundation we build to bring people together. When it’s created and sustained, people will come back. Authenticity is what matters…and your culture should shout that!”

The post When a Return to the Office and Workplace Culture Collide appeared first on The Future of Work Exchange.

Enterprises of all sizes rely on contingent workers as a critical segment of their workforce and operational support. However, a final ruling on the 2021 IC Rule issued by the U.S. Department of Labor (DOL) has the potential to upend the gig economy when it goes into effect on March 11. The ruling brings into focus how organizations classify an employee versus a contractual worker under the Fair Labor Standards Act. The final ruling presents stricter guidelines on independent contractor classification. The ramifications on labor costs, workforce policy, and talent strategy could be significant.

A Ruling Focused on Guidance

The purpose of the DOL’s ruling is twofold: 1) institute guidelines for how to classify workers as independent contractors and 2) prevent employee misclassification — a serious problem that the DOL says “impacts workers’ rights to minimum wage and overtime pay, facilitates wage theft, allows some employers to undercut their law-abiding competition and hurts the economy at-large.”

According to Acting Secretary of Labor, Julie Su, “Misclassifying employees as independent contractors is a serious issue that deprives workers of basic rights and protections,” she explained. “This rule will help protect workers, especially those facing the greatest risk of exploitation, by making sure they are classified properly and that they receive the wages they’ve earned.”

Separately, the DOL’s final ruling rescinds the Trump era 2021 Independent Contractor Rule that the “department believes is not consistent with the law and longstanding judicial precedent.”

The DOL published the following to describe and explain its final ruling: This final rule rescinds the Independent Contractor Status Under the Fair Labor Standards Act rule (2021 IC Rule), that was published on January 7, 2021, and replaces it with an analysis for determining employee or independent contractor status that is more consistent with the FLSA as interpreted by longstanding judicial precedent.

The misclassification of employees as independent contractors may deny workers minimum wage, overtime pay, and other protections. This final rule will reduce the risk that employees are misclassified as independent contractors while providing a consistent approach for businesses that engage with individuals who are in business for themselves. 

Since the issuance of the final ruling last month (January 9), its reception has trended toward the negative. One of the biggest concerns is the lack of clarity in the ruling itself.

Resounding Opposition Follows Final Ruling

While the ruling is designed to offer protections (e.g., overtime pay, benefits, etc.) for employees misclassified as contingent workers, it brings possible drawbacks to both workers and organizations. Reaction to the ruling was met with criticism and concern by several industry representatives.

Marc Freedman, U.S. Chamber of Commerce Vice President of Workplace Policy — Link:

“The Department of Labor’s new regulation redefining when someone is an employee or an independent contractor is clearly biased towards declaring most independent contractors as employees, a move that will decrease flexibility and opportunity and result in lost earning opportunities for millions of Americans,” he said.

“It threatens the flexibility of individuals to work when and how they want and could have significant negative impacts on our economy. Making matters worse, the rule is completely unnecessary, as the Department continues to report success in cracking down on bad actors that are misclassifying workers. The U.S. Chamber will carefully evaluate our options going forward, including litigation,” Freedman added.

Emily Dickens, Society for Human Resource Management (SHRM) Chief of Staff, Head of Public Affairs and Corporate Secretary — Link:

“The DOL’s action … ‘underscores the importance of clear and consistent regulations, fostering diverse business relationships essential for the demands of the modern economy. HR plays a vital role in ensuring proper worker classification,’ she said.

‘However, the ongoing shifts in regulatory guidance impose compliance burdens and legal uncertainties on HR professionals and business executives.’”

Timothy Taylor, Holland & Knight Labor, Employment and Benefits Attorney (in an article for Law360) — Link:

Taylor’s expressed concerns about the challenges the rule poses for both businesses and independent contractors: “There are no real surprises, but the rule is just going to remain very challenging and very problematic for businesses and for workers who want to retain their independent status across the board,” he said.

Chris Spear, American Trucking Associations’ President and CEO — Link:

“I can think of nothing more un-American than for the government to extinguish the freedom of individuals to choose work arrangements that suit their needs and fulfill their ambitions. More than 350,000 truckers choose to work as independent contractors because of the economic opportunity it creates and the flexibility it provides, enabling them to run their own business and choose their own hours and routes. That freedom of choice has been an enormous source of empowerment for women, minorities, and immigrants pursuing the American Dream,” Spear said.

It is clear based on opinions from some of the largest industry groups that we haven’t heard the last about the DOL’s final ruling.

Uncertainties Ahead for Enterprises and the FOW

The true impact of the final ruling on workers, enterprises, and the Future of Work at large, has yet to be seen. However, here are a few closing thoughts on how things could change moving forward.

Labor costs. Should organizations find themselves classifying more workers as employees (who were previously independent contractors), expect a steep rise in labor costs for those employers. Purportedly, to prevent misclassifications and system abuse, there are stricter guidelines around classifying workers as independent contractors.

Workforce planning. With nearly 50% of an enterprise’s total workforce comprised of contingent labor, the final ruling could have significant implications on talent allocation. With fewer contingent workers, how does that affect talent acquisition and total talent management strategies? Having the right talent at the right time could take on an entirely new meaning.

Direct sourcing strategy. A global talent pool to attract and hire contingent workers is a major component of direct sourcing. Enterprises with a focus on skills-based hiring have boundaryless options when it comes to contingent labor. However, a reduction in contingent labor coupled with stricter remote work policies suddenly shrinks the potential labor pool drastically.

Worker flexibility. The benefit of work-life balance for an employee is often viewed as an acceptable tradeoff to higher compensation. The same holds true for contingent workers. The scheduling flexibility and client freedom are just a couple of benefits afforded to contingent workers. Under the final ruling, however, those advantages could disappear under an “employee” classification. For example, a noncompete clause as an employee could affect the livelihood of a contingent worker.

FOW paradigm. A Future of Work principle is about being future ready by sourcing talent to execute today as well as tomorrow. Contingent workers are the backbone of that principle. A government ruling that could impact a large percentage of nearly 50% of the workforce is worth taking a closer look. Enterprises hire contingent workers for many strategic positions. It would serve them well to find a happy medium around labor protections for this critical workforce segment.

The Future of Work Exchange will continue to cover this issue and others like it. We encourage you to provide your opinions and feedback. Follow our managing director and thought leader Christopher Dwyer on LinkedIn to be part of the discussion.

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