Prediction: The alternative workforce will be the next frontier in the war for talent

Posted by Kathi Enderes and Mike Kemp on December 4, 2019.

The talent market is tighter than ever—skills requirements are rapidly changing, and unemployment is at unprecedented lows in many parts of the world. Not surprisingly, 67 percent of organizations worldwide are having trouble filling open positions.1

At the same time, more and more workers are opting out of traditional employment scenarios and choosing alternative employment options instead—as contractors, consultants, freelancers, gig workers, even crowd work.

Technology is enabling everyone to operate with fewer parameters and is also facilitating better ways to match organizations and the talent they need, with platforms for gig work offering options beyond just hourly work, expanding to job titles like lawyers, consultants, designers, and data scientists. It’s logical, then, that organizations are turning to the alternative workforce for many positions beyond traditional roles like IT.2

The benefits of alternative workers for organizations are well known—the alternative workforce can reduce costs, provide access to scarce skills when needed, increase flexibility to scale up and down, and provide more diverse perspectives and experiences. Effectively leveraging this on-demand workforce can enable organizations to not only put the right people in the right place when they are needed but also adjust easily as those needs shift.

Unfortunately, just over half (54 percent) of organizations either manage alternative workers inconsistently or have few or no processes for managing them at all.3 Organizations that want access to alternative workers’ skills and experience will have to intentionally cultivate a positive experience for and extend the overall workforce strategy to align with these worker segments. The days of managing alternative workers transactionally are over—this is an imperative that HR must take on.

Integrating Alternative Workers with Purpose and Meaning
The best alternative workers will have their choice of options; a simple exchange of skills for money might not be enough to attract them. Top talent will look for an engaging experience in which their opinions and contributions are valued and respected. And, although the big moments matter, the small moments are just as impactful to workforce experience. Meaningful work and opportunities to use one’s strengths, access to tools and necessary resources, input into how work is designed, and balance between flexibility and predictability are all vital for traditional employees and alternative workers alike.4

A new value proposition will need to be carefully designed and tailored to enable organizational culture, workforce needs, and the organization’s brand—and it must allow for the unique needs and aspirations of the alternative workforce. Many organizations have experience with this: part-time employees are not typically treated the same as full-time employees. Their experience is not better or worse, but rather tuned to their needs and the value they bring—and this experience can be transferred to the alternative workforce. To get the best alternative talent (not just a person in a role), organizations need to have a strategy that evaluates cost and benefits—both from the perspective of the organization and the alternative workforce. It’s not an either-or proposition, it’s both-and.

In the battle to attract the best alternative workers, organizations will stand out among their competition if they focus on engaging alternative workers by curating an underlying and ongoing relationship with them, even though the employment relationship might not last long. Even a short-term worker can be a potential customer, a positive brand ambassador, and a valued member of a team when returning for another gig with the organization.

Organizations will face some hurdles in this fight. The first is a mindset challenge—most organizations are approaching alternative workers tactically rather than strategically as ongoing relationships and potential customers in the market. Second, managers and leaders are often confused about the line between legality and risk and may leave behind opportunities to benefit from this workforce segment for fear of crossing that line. Applicable laws in most countries are blurry at best, and outright confusing at worst. But while these laws haven’t caught up with new realities of work—particularly people’s dissatisfaction with legacy employment scenarios—they still need to be followed. This fluid regulatory and legal landscape represents the third and most vexing hurdle we see.

Equipping Your Organization to Leverage the Alternative Workforce
In order to win the battle for the alternative workforce, the time to start is now.

  • Start with outcomes. What business goals are you trying to accomplish with the alternative workforce? A balance of cost, value, growth, and meaning in work is key.
  • Imagine the possibilities. Broadening the talent pool to strategically take advantage of alternative workers presents myriad opportunities. Be sure to check your assumptions.
  • Compose a plan. Prioritize your starting point. It could be the part of your business where there is high value for customers (remembering that alternative workers may also be customers), where leadership is ready, where skills are particularly hard to locate, or where the most flexibility is needed.
  • Activate the workforce. Access needed skills and capabilities with a worker-centric approach. Curate engaging experiences for the alternative workforce—a mere 8 percent of organizations have effective processes in place to manage and develop alternative workers.5 Make learning experiences for alternative workers part of the work itself. Engage the workforce—high-performing organizations are 4.8 times more likely to provide alternative workers with performance goals, 10 times more likely to provide them with regular performance feedback, and 6.5 times more likely to provide them with access to organizational learning resources.

The alternative workforce is here to stay. To tap into this workforce segment and position your organization to reap the benefits, focus on creating an attractive value proposition for alternative workers and intentionally deciding where to use them. In 2020, we will share more insights on the approach to transforming the total workforce for the future.

Our Future of Talent survey is now open. Follow the link to participate and learn more about what you’ll receive for taking part. Thank you!

Kathi Enderes, PhD, is a vice president and the talent and workforce research leader at BersinTM, Deloitte Consulting LLP.

Mike Kemp, PhD, is a research manager and SRA team lead at BersinTM, Deloitte Consulting LLP.

12019 Global Human Capital Trends: Leading the social enterprise—Reinvent with a human focus, Deloitte Consulting LLP and Deloitte Insights, 2019.
22019 Global Human Capital Trends: Leading the social enterprise—Reinvent with a human focus, Deloitte Consulting LLP and Deloitte Insights, 2019.
3 2019 Global Human Capital Trends: Leading the social enterprise—Reinvent with a human focus, Deloitte Consulting LLP and Deloitte Insights, 2019.
4 High-Impact Workforce Experience research, Bersin, Deloitte Consulting LLP, 2019.
5 2019 Global Human Capital Trends: Leading the social enterprise—Reinvent with a human focus, Deloitte Consulting LLP and Deloitte Insights, 2019.
6 High-Impact Performance Management research, Bersin, Deloitte Consulting LLP, 2019.

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