With work and the workforce changing so rapidly in today’s business climate, it can be hard for senior leaders to discern which trends truly demand their attention and investment. As organizations refine their long-term strategies, the emphasis on integrating talent, technology, and real estate perspectives into master planning efforts becomes critical. Working with industry leaders across the country, it is apparent that amplifying the role of talent and HR leaders will greatly enhance the relevance and effectiveness of long-term planning.
This is becoming especially more critical for organizations as the workforce evolves, creating new challenges and opportunities. Consider just the following labor trends and data points we’ve seen emerge in the past 12 to 18 months.
- More than 57.3 million Americans (or 36% of the country’s workforce) are now freelancing, allowing companies of all sizes and types to shift their workforces more toward contract employees as opposed to full-time staff.
- Tech companies have especially leveraged the gig economy as data indicates just a 1.1% average increase in direct employment in tech products or service companies over the past 20-plus years – despite this sector’s size, reach and earnings growing exponentially faster in the same time period.
- Numerous predictions indicate that as of 2020, we’ll have 1.5 million fewer college-educated workers than the economy needs. This creates intense competition for skilled workers and pushes organizations to be more flexible about where, how and when staff work.
- This intense competition (coupled with other factors like growing entrepreneurship, online tech training, etc.) is also changing hiring focus. Data from Freelancing in America suggests that 93% of freelancers with a four-year college degree say skills training is now more useful to the jobs they do versus just 79% who say their college education.
- With a greater sense of stability, the freelance economy continues to expand. The number of U.S. freelancers grew by 8.1% over the past year – more than three times as fast as the U.S. workforce at large. If these rates were to continue at this pace, at least half of all U.S. workers would be freelancing by 2027. We can anticipate those growth rates leveling or slowing at some point, but not soon or the contract workforce pushes more significant change to our economy.
This shift in our workforce is being driven by access to the shared economy, competition for talent, opportunity for companies to scale workforce for financial advantage, and technology. The use of enhanced technology to collaborate from different corners of the world and work in virtual environments in real-time accelerates this shift.
There are exciting opportunities for companies to find new skills and acquire new capabilities through the freelance economy. However, accommodating for this new talent source has implications on protocols and policies surrounding security (both physical and cyber), IP protection, benefits and compensation, remote work and real estate, to name a few. Navigating this evolving workforce is unchartered territory for many organizations and requires thoughtful guidance.
How should organizations determine which functional capabilities to hire via contract versus full-time employees? What does a workplace look like that needs to support all these different types of individual workers and teams? What technology will organizations need infused in their workplaces today – and for tomorrow – to ensure they can best empower their people? Which culture and environment will help ensure our top talent (freelance or employed) stays with our company? How do we create a workplace for long-term ROI amidst constant change?
As our labor market evolves, the answers to these questions impact more than talent and HR strategy but become core to the sustainability of each organization’s long term vision. With change being a constant, workforce and talent decisions will have a greater influence on shaping organizational strategy and capital investments.