Over the past several weeks, I’ve written about the various contingent workforce, staffing, and Future of Work attributes that could contribute to the way businesses will operate a year from now. Taking into account the very strange days of 2020, combined with the anticipated growth in the utilization of non-employee talent, businesses now understand that there are many dynamic forces at play that will shape their outlook and success in 2021 (and beyond).

I once again had the opportunity chat with various contingent workforce, staffing, and HR technology leaders about the key trends that will shape the year ahead:

Kathy Hardy, Vice President, Kelly Discover (KellyOCG)

“Over the past several years, D&I has been talked about as an HR goal, or project and the initiatives surrounding it have been largely internally focused. Since COVID-19 and the social unrest, D&I ideation has become more of a company-wide conversation than an HR objective alone, and the general level of empathy has seemed to increase as well.  It is easy to engage any number of c-suite and leadership members in a conversation regarding their thoughts on what their organization needs to do in regard to change in this area. Their answers are thoughtful, empathetic, and full of reflection. Organizations seem to be interested in making incremental changes in their hiring practices as well as discussing long term holistic changes to their systems.  They are coupling current business challenges with potential diversity hiring practices rather than looking at them separately, and that change may make the real difference in 2021.  When we incorporate the unique skills and availability of all the under-utilized talent with our current business challenges, we are not only moving forward, but we are also jumping ahead.”

Donna Wilczek, SVP of Product Strategy and Innovation, Coupa Software

“A key part of our customers’ strategic goals for 2021 is the ability to flex their workforce based on continually changing supply chain demand signals. We will ensure their success through best-of-breed contingent workforce capabilities wrapped around AI-supported decision modeling using trillions of dollars in community data to help our customers be smarter together.”

Kevin Poll, Global Head of Strategic Partnerships, D&I Champion, WillHire

“We have been working with procurement and HR leaders in organizations of all sizes as they are beginning to recognize the importance of having a diverse workforce and inclusive culture, not just because it’s good for business, it’s good for their workforce. Overwhelmingly, they are realizing that they need to broaden their focus on DE&I; beyond just supplier diversity for procurement and employee diversity and inclusion for HR.  By looking at D&I of just their full-time employees, they are missing a very large segment of their workforce, thus not recognizing as much impact as possible. As they consider the importance of total talent diversity to their business, they must set a clear direction starting at the executive level and carrying that throughout the organization to every level and category of worker for it to be the culture of the company.  They then must put action into place to attract, engage, and retain diverse talent in all categories and continually measure and monitor the impacts of their diversity and inclusion strategies. By building bridges throughout the organization and understanding this is a journey, companies have the opportunity to truly make an impact on their business, their workforce, and their community.”

Rich Oakes, President, GigSmart

“The current labor market is showing that alignment is increasing between companies and workers. Last year, over 50 million Americans completed a “gig” or a “side-hustle.”  More and more workers are seeking flexibility and control in their work. Companies are also looking for more flex labor solutions. These two wants/needs between workers and companies is the very reason the gig economy is one of the fastest growing segments of the labor market.”

“The days of only embracing the W2 hiring model are over. To remain fully staffed, companies need to embrace multiple types of labor: W2 employees, 1099 contractors, as well as third-party outsourced solutions to assist in their labor strategy.  Missing deadlines and falling short of customer expectations are consistent results of companies not implementing a comprehensive talent strategy. Companies with a total talent staffing strategy will save money, fill positions faster, experience less turnover, and out produce their competitors who haven’t adjusted to the current times.”

Marlon Rosenzweig, CEO and Co-Founder, WorkGenius

“Companies became comfortable with remote work during the pandemic and they became uncomfortable with fix-costs, such as payroll.  Now companies consider freelancers for more roles than before. This trend existed pre-pandemic but was significantly accelerated and will drive demand for technology solutions to source and manage this part of a modern agile workforce.”

“Remote workforces in combination with merit based performance data, allow for more diversity in the remote workforce as talent from other parts of the country can be considered, without the previous regional bias which often correlates with other biases due to homogenous neighborhoods.”

Diana Doro, VP of Sales, Workspend

“It’s always been the case that companies with diversity and inclusion strategies are more admired and have better culture, but now that may also include being more successful, especially as it relates to talent – a diverse pool of talent is the widest pool, and in the changing landscape of hiring we’re seeing today, this strategy could be the “win or lose” for businesses to get through and beyond COVID. This is especially true as it relates to contingent work, which is the most flexible but also becoming the most competitive workforce available – without including the contingent workforce in these diversity strategies, companies could make a huge miss. Creating a contingent workforce strategy that has those risks in mind will set companies up for success in reaching the best talent and avoid the pitfalls of only thinking about diversity once it’s too late.

The non-employee workforce was always growing, but the exponential growth we’ve seen in such a short time is really telling in the way employees want to engage employers, and the employer response to that change. This shift tells a story of workers wanting more flexibility in how they use their skills, and the dramatic shift to work-from-home brought on by stay-in-place orders simply accelerated that shift. It will be interesting to see if that shifts back post-COVID, but it’s likely here to stay for a few reasons: First, a contingent workforce can quickly flex up or down, and companies, once they realize they have this new-found agility, likely will not let it go. Second, employees are now growing accustomed to the convenience of being able to do their jobs from anywhere, which is in part why there have been so many articles on the evacuation of cities in recent months, and many of those workers likely won’t return if they don’t have to, so companies that are prepared to work with employees who prefer remote are going to win that talent.”

Nina Vaca, CEO and Founder, Pinnacle Group

“As we began to realize in March/April, the quarantines and social distancing represented the first stage of a significant realignment of the global workforce. Today, many sectors continue to struggle, while others prosper. Automation and data analytics have become even more critical; and virtualization combined with cyber security has become table stakes.”

“Demand for IT professionals continues to be relatively strong.  While labor demand overall declined from its pre-pandemic peak, the declines have been less significant within the IT sector, particularly for those with skills in virtualization, cyber security, and anything cloud-related. Any roles that can be performed remotely have been largely unaffected.”

“The third quarter represented a significant recovery for many after the historically low second quarter results. Major events always carry with them both risk and opportunities. It is the job of every business leader to find and invest in those opportunities. For CEOs and other industry leaders, now is the time to demonstrate confidence, embrace new ways of working together, and continue to make critical foundational investments in what appears to be yet another “new normal.””

Sandeep Dhillon, CEO, Talmix

“We’re probably not alone amongst platforms for non-employee talent in seeing growth during recent months as companies needed to keep the wheels turning, while being nervous about committing to full-time hiring. This has really been another flavor of talent on demand, as a fast way to solve a problem for a hiring manager. What we’re now seeing is that companies want to move away from ad hoc usage, and into a more structured plan to get the best talent mix, particularly as transformation initiatives are accelerated. Within the Talmix customer base, we’re seeing the first stage of this planning, as companies centrally build talent pools for the profiles that will be required across their business. The pressing focus is still speed, needing to rapidly build and deploy this talent into more flexible teams. A secondary trend is the desire to upskill/reskill, again heavily influenced by the transformation agenda, but as one client put it, reskilling/upskilling  the existing workforce frequently needs leadership from outside the organization to drive these programs through at scale. Overall as we move into 2021, we’re seeing plenty of examples that the non-employee workforce is going to be more embedded, shifting from talent on demand, to adoption of the extended workforce.”