Agility and the ability to respond to disruptive influences are key competitive differentiators in today’s increasingly digital business environment. The extended workforce is a strong enabler of these qualities, allowing organisations to flex in response to changing business needs―in effect, creating a highly adaptable and change-ready “liquid workforce.” In my previous post, I explained what the extended workforce is and the drivers behind its development. Now I’m going to share specifics on the potential business impacts of utilising an extended workforce, as well as the part HR will play in driving the transitioning to a liquid workforce.     

What the extended workforce means to you

One of the best features of the extended workforce is that it has benefits for both employers and employees. If you’re wondering what difference the extended workforce could make to your firm, here are just a few examples.

Business benefits: The two greatest business benefits from taking a strategic approach to the extended workforce are enhanced agility and access to top talent―which translate to decreased time-to-market, the ability to scale to meet changing global demands, reduced training and “ramp up” costs, and a broader skill base for meeting diverse customer preferences. Through the extended workforce, smaller businesses also gain the advantage of having access to the same talent pool as large enterprises.

The infusion of extended workforce talent into the organisation also fosters innovation, which is critical to a competitive strategy. New ideas, combined with a more collaborative environment, bring fresh thinking to the firm.

Additionally, a contingent workforce gives employers the opportunity to “try out” workers they might want to hire permanently―a distinct advantage over relying on resumes, interviews, or other forms of assessment. And while extended workforce employees might command a higher pay rate (including agency load), there are no additional costs (such as taxes, benefits, and on-boarding).

Employee benefits: As the extended workforce rises to a strategic position within the work environment, and gains more value for businesses, its value to workers rises as well. Increasingly, workers are choosing to be part of the extended workforce, viewing it as an opportunity to more effectively apply their skills and expertise, create a work environment that’s a better fit with their lifestyle, expand their skills, and even reap greater financial benefits―despite the uncertainty that comes with contingent or freelance work. It’s also been shown that blending contingent and in-house workers improves the performance of regular employees, as it frees them up to be better matched within their organisation in terms of task and talent. A contingent workforce can actually unleash the potential of full time employees.

HR’s changing role

While the extended workforce certainly has positive impacts on both businesses and employees, it has impacts on the HR function too. While contingent workers have long been a part of the workforce, today’s extended workforce is quite different―requiring a strategic rather than a tactical approach.

HR professionals will find themselves redefining their missions and activities to address an employee audience that will not only be managed for the unique value it brings to the organisation but will also be sourced in fundamentally different ways―such as social networks and cloud-based crowdsourcing platforms. Additionally, talent management practices must be applied to this group of employees, just as they are to the permanent workforce. These changing realities require both a behavioral and cultural shift within the HR function to enable a positive “employee” experience for both permanent and extended workforces.

In my next post, I’ll share specific steps HR professionals and the organisations they support can take to successfully manage this new business model.

 To learn more about the extended workforce, please see:

The Rise of the Extended Workforce

Technology Vision 2016_People First: The Primacy of People in a Digital Age: Trend 2: Liquid Workforce

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