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Contingent Workforce

Enterprise Agility Through Tribal Teams

Most of us worked remotely during the first year of the COVID-19 pandemic. We adapted quickly to new ways of working and communicating. Often, we had to collaborate differently to gain transparency and complete projects. That usually meant pulling employees from other departments into team meetings or creating more diversified, cross-functional virtual teams —with enterprise agility as the objective. The need for agility since the pandemic began is now embedded within leading enterprises. So, too, is the agile concept of workplace tribes to innovate and solve business challenges.

What Is a Tribe?

Workplace tribes are comprised of 100 or fewer employees who bring interdisciplinary backgrounds to their groups. Rather than focusing on one large business objective, tribes are assigned specific aspects of a project or initiative. For example, an enterprise may be looking for new customer markets. A tribe could have members from procurement, logistics, marketing, finance, and others who are assigned a precise country to explore its viability.

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The Next Stage of Total Talent Management: Value Chain Management

Whether enterprises realize it or not, it is time to approach total talent management as an ecosystem value chain. Like supply chains, which are not linear segments but rather a spiderweb of inputs, the total talent ecosystem has a similar construct. With enterprise talent and strategy at the center hub, the various talent inputs such as FTEs, gig workers, contractors, and external talent serve as spokes that feed into organizational strategic objectives. As an ecosystem, it is about accessing the best talent from an arsenal of channels.

Using a sports analogy, enterprises now have a valuable “bench of players” from whom to select for various projects and initiatives. With total talent intelligence, organizations can tap employees with specific skillsets that may not be core to their current roles. Through the utilization of HR solutions, there should be transparency in the full depth that each employee brings to the enterprise.

The rest of this article is available by subscription only.

Introducing a New Subscription Model from the Future of Work Exchange.

To continue providing valuable insights and resources on the future of work and extended workforce management, we’re transitioning our site to a paid subscription model. While some posts will remain free, subscribing will grant you exclusive access to in-depth analysis, market research, expert interviews, and actionable strategies that will help improve your business. Solution providers and practitioners are invited to join today and gain a competitive edge by tracking the industry’s important innovations, emerging trends, and best practices.

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Optimize Contingent Workforce Management Through AI

In today’s labor and economic climate, enterprises cannot afford to make poor hiring decisions. And with 47.5% of an organization’s workforce comprised of contingent workers, per Ardent Partners and Future of Work Exchange research, an extended worker hire is just as critical operationally as a permanent employee. The ramifications of a hiring mistake — whether it’s an extended or permanent role — can cost businesses 30 percent of the employee’s first-year earnings, according to the U.S. Department of Labor. However, artificial intelligence is now shaping the future of contingent workforce management (CWM) to help avoid those employment missteps.

CWM Optimization Through Artificial Intelligence

Through artificial intelligence, enterprises can harness the value of structured and unstructured data to streamline contingent workforce management decision-making. AI also opens the door to new user experiences to better attract, acquire, and retain top-performing talent and improve operational execution — all leading to cost savings. Using prescriptive analytics for CWM optimization is an evolving but critical piece of AI strategy. While artificial intelligence has existed for a decade or more, the wider scope of its capabilities is only now being utilized.

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Introducing a New Subscription Model from the Future of Work Exchange.

To continue providing valuable insights and resources on the future of work and extended workforce management, we’re transitioning our site to a paid subscription model. While some posts will remain free, subscribing will grant you exclusive access to in-depth analysis, market research, expert interviews, and actionable strategies that will help improve your business. Solution providers and practitioners are invited to join today and gain a competitive edge by tracking the industry’s important innovations, emerging trends, and best practices.

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Upwork Survey Identifies Fastest-Growing Skills

The world of work is rapidly evolving as technologies like artificial intelligence (AI) shift how work gets done. Enterprises are turning to AI for transformative workplace results, leading to increases in upskilling and technology adoption within the contingent and permanent workforce. This opens the door for freelancers and contractors who meet the skills demand from organizations to leverage new technology for greater efficiencies and substantial insights.

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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Talent Ecosystems for Value Chain Management

Whether enterprises realize it or not, it is time to approach total talent management as an ecosystem value chain. Like supply chains, which are not linear segments but rather a spiderweb of inputs, the total talent ecosystem has a similar construct. With enterprise talent and strategy at the center hub, the various talent inputs such as FTEs, gig workers, contractors, and external talent serve as spokes that feed into organizational strategic objectives. As an ecosystem, it is about accessing the best talent from an arsenal of channels.

Using a sports analogy, enterprises now have a valuable “bench of players” from whom to select for various projects and initiatives. With total talent intelligence, organizations can tap employees with specific skillsets that may not be core to their current roles. Through the utilization of HR solutions, there should be transparency in the full depth that each employee brings to the enterprise.

Total Talent Management…Enabled By Today’s Tech

There are few reasons for enterprises not to have extended workforce systems to enable total talent intelligence and human capital systems integration. Research from Ardent Partners and the Future of Work Exchange indicate that 65% of businesses plan to utilize their workforce solutions to enable total talent intelligence over the next couple of years. And 90% have integration enabled between HR and contingent workforce systems (such as integration between HRIS and VMS platforms).

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Introducing a New Subscription Model from the Future of Work Exchange.

To continue providing valuable insights and resources on the future of work and extended workforce management, we’re transitioning our site to a paid subscription model. While some posts will remain free, subscribing will grant you exclusive access to in-depth analysis, market research, expert interviews, and actionable strategies that will help improve your business. Solution providers and practitioners are invited to join today and gain a competitive edge by tracking the industry’s important innovations, emerging trends, and best practices.

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DOL Ruling Leaves Uncertainty for Contingent Workers

(Author Note: This article intends to inform about a critical government ruling taking effect in a few weeks as well as encourage discussion on social media. See a post by Christopher Dwyer, managing director of the Future of Work Exchange, this week on LinkedIn to share your opinions and feedback.)

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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Elevate Your Future of Work Processes with Blockchain

One of blockchain’s chief benefits is the ability to authenticate and protect information. With today’s decentralized workforces, there is a variety of information possibly at risk, including payroll, insurance, health, and personnel data. Similarly, HR and enterprise recruiters want assurance that potential job candidates and their résumés are authentic and accurate. Blockchain technology has the potential to provide the necessary verification and protection of such sensitive workplace data.

Here are three Future of Work areas where blockchain technology could provide critical verifications and safeguards, particularly for the contingent and gig workforce — from the recruitment to the contracting and payment process.

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Introducing a New Subscription Model from the Future of Work Exchange.

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The Impact of Contingent Workforce Management Analytics

Today’s total talent management strategies rely on analytics to execute workforce objectives. For extended workers who comprise nearly half of enterprises’ entire labor force (49%, according to our research), analytics are even more crucial to developing metrics and optimizing performance. Recent Ardent Partners and Future of Work Exchange research indicates that 81% of organizations cite the improvement of contingent workforce management (CWM) analytics as a priority, highlighting the importance of deeper, more insightful data and analysis.

CWM Analytics for Insights

According to Beeline, a leading contingent workforce solution provider, “For many organizations lacking formal analytics and reporting on their contingent workforce, identifying key metrics can even be challenging.” The focus on analytics goes well beyond hiring, scheduling, and payment data, to include deeper areas of concentration. The following are several analytic subsets imperative to contingent workforce management and performance.

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Introducing a New Subscription Model from the Future of Work Exchange.

To continue providing valuable insights and resources on the future of work and extended workforce management, we’re transitioning our site to a paid subscription model. While some posts will remain free, subscribing will grant you exclusive access to in-depth analysis, market research, expert interviews, and actionable strategies that will help improve your business. Solution providers and practitioners are invited to join today and gain a competitive edge by tracking the industry’s important innovations, emerging trends, and best practices.

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The Continued Impact of the Extended Workforce

As the workforce adapted to remote and hybrid models over the past three-plus years, enterprises shifted their focus towards optimizing work strategies to ensure operational continuity in the face of the ongoing pandemic and global supply chain disruptions, as well as other enterprise challenges (such as today with rocky economic conditions). The concepts of operational agility and flexibility took on newfound importance, reshaping approaches to talent acquisition and management, especially in the realm of extended workforce.

One of the key competitive advantages during these challenging times has been scalability. Organizations found themselves evaluating how swiftly they could scale their operations up or down and secure top-notch talent during both times of survival and times of success.

The rest of this article is available by subscription only.

Introducing a New Subscription Model from the Future of Work Exchange.

To continue providing valuable insights and resources on the future of work and extended workforce management, we’re transitioning our site to a paid subscription model. While some posts will remain free, subscribing will grant you exclusive access to in-depth analysis, market research, expert interviews, and actionable strategies that will help improve your business. Solution providers and practitioners are invited to join today and gain a competitive edge by tracking the industry’s important innovations, emerging trends, and best practices.

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Optimize Your Workforce with Recession-Proof Strategies, Part Three

Today concludes our three-part series exploring several contingent and workforce strategies to achieve a recession-proof enterprise.

We’re now two months into the second half of 2023 and economically speaking, things are looking positive. The Bureau of Economic Analysis reports that GDP grew 2.4% in the second quarter of 2023. The labor market remains tight with unemployment at 3.6%, a rate not witnessed in decades. However, according to the U.S. Bureau of Labor Statistics, the tight labor market provides the Federal Reserve with the flexibility to continue raising interest rates to fight inflation. Currently, inflation rests at 3%, a percentage point higher than the Federal Reserve’s longer-run goal of 2%.

Does the state of the current U.S. economy equate to a “soft landing” and the evasion of a recession? Maybe, maybe not.

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Introducing a New Subscription Model

To continue providing valuable insights and resources on the future of work and extended workforce management, we’re transitioning our site to a paid subscription model. While some posts will remain free, subscribing will grant you exclusive access to in-depth analysis, market research, expert interviews, and actionable strategies that will help improve your business. Solution providers and practitioners are invited to join today and gain a competitive edge by tracking the industry’s important innovations, emerging trends, and best practices.

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