Simon Townsend wants to build the future. His problem? The world of talent management isn’t moving fast enough. Like many ‘futurists’ and ‘innovators’ before him (the term ‘innovation’ is actually in his job title) he sees a world without the structures, frameworks and barriers that hinder so many organisations and institutions today. A world where work is task based and varied, you drive an Uber on the side, and we look to Africa for our management lessons. So, how do we prepare for these challenges? What role does HR play in the changing world of work?
This week we talked to Simon about why the workforce has fundamentally changed, industries who need to prepare for significant disruption and how the answers to our challenges may lie beyond our boarders.
Why the Contingent Workforce is Growing
The golden handshake
“The move towards contingent work is a really interesting one for me because it’s being driven by a number of factors. First of all it started with companies and organisations losing the loyalty of their employees. Decades ago people would join one organisation and join that organisation for life. They’d work until they got the gold watch and the handshake and would never think to buy anyone else’s products. That’s not the case anymore, and it was companies that broke that relationship, rather than employees. This started a whole mind shift for employees as well, a shift that we’re seeing more and more now.”
“It also initiated a change of societal factors that affected the generations differently. Gen X’s started to look at 10 years as an appropriate tenure, Gen Y who didn’t have the desire for a permanent career have reduced that tenure even further. People are now collecting skills or experiences in their life, rather than joining an organisation to work there for an extended period of time. As a result, the permanent workforce is slowly being eroded. We’re seeing people in nominally permanent roles actually staying in their positions longer than those who are in a contingent style role within the same company. Some people would say it’s because they’re misclassified, but I don’t believe that’s the case. I think people and organisations are choosing to work contingent because they want flexibility on both sides, to move and shift as their situation changes.”
I think people and organisations are choosing to work contingent, because they want flexibility on both sides, to move and shift as their situation changes.
The sharing community
“If you look at society moving towards more of a sharing economy or community style approach, then those people don’t really want or need that tenure; nor do they need the benefits that traditionally go with it. Of course there are a lot of people who still do, so it’s not something we’re seeing everywhere but we we’re seeing it in verticals like IT or locations such as Silicon Valley, places where there is high demand, but also a high number of people available with that skill set. The ability to move and shift around as you want becomes really beneficial.”
“These trends aren’t across all geographies or industries yet but overall the trend is pushing this way. The research is indicating that we’ll see these work trends move into other industries over the next 5 to 10 years.”
The rise of the freelancer
“The other thing we’re moving towards is looking at the contingent work space as a stepping stone, a leapfrog space. We’re seeing the rise of the freelancer, where it’s not simply people who are specialising in one contingent field. Rather than a project manager moving from project to project, or an IT person moving to project to project, in the freelance space we’re seeing people pick up a myriad number of jobs that they can do in the moment. This would be an IT person going from an IT project to a little house painting, to a bit of coding, to logo design to driving for a day. It’s the ability to swap and change and do something different and interesting. Although this is currently more of a younger Gen Y approach than anything we’re seeing starting to move through the generational landscape.”
Challenges in a freelancer world
This drive towards doing something interesting and different on a daily basis is fascinating; it’s beneficial for organisations as long as they can understand what their core business is.
“If organisations can retain their core and outsource all the various elements that go around that core service, and make sure that all those non-core elements can be completed in a timely fashion then they will succeed. This is where we see the rise of the freelance manager systems, where you can track and log everything that’s going on, as well as rate the people working on tasks.”
“This also plays into that Contingent Space. When you shift everything into task based work and shift it out of the organisation you can see not only cost reductions but you can gain an ability to get stuff done really, really fast. That is one of the things I think will be driving the future.”
Where I Thought the Contingent Workforce Would be in 2015
“I always expect things to move faster than they do, it’s one of those truisms that the world never moves as fast as I expect but then I turn around and everything has changed. I find that Human Resources, whether it be contingent, whether it be permanent, they don’t shift as fast as I would expect. The benefits don’t get realised as fast as I would expect. The lack of pace and adoption of new software or platforms is always slower than I expect.”
If you look at the way people use tools and platforms in their everyday life the adoption rates are really fast. A new social platform comes out, and everyone jumps out on to it, they learn to use it very quickly but when it comes to applying that behaviour inside the firewall the traditional HR departments don’t seem to want to risk upsetting the apple cart.
What is Hindering this Change?
“I think HR is generally the slowest to react within an organisation. I’ve seen IT, Risk and Legal departments be more flexible in their approach than HR teams, but it really doesn’t have to be like that.”
“In Australia we have some of the leading minds working in the HR industry it’s just a matter of pushing through the barriers, boundaries and unnecessary red tape.”
“One of the areas hindering this process at the moment is the legal issues around classification of an employee. As the workforce changes, legislation is going to have to catch up. The laws that we’re seeing being generated today in regards to the Uber cases in the US, those court cases will finish, new legislation will be implemented and that will pave the way for legislation across Europe, Asia and Australia.”
Candidates expect a different way of working
“Candidates today are used to operating across 6 different platforms using 6 different tools and 5 different devices, so for an organisation to say they’re not ready for change is ignoring the way the world has already moved. That’s why we see across organisations, that the people who are the real innovators and driving the change at the grassroots level get frustrated and move on faster. This is something that Gen Y has brought to the table, the feeling that “if I can’t affect change and something isn’t working, then I’m going to move on”.”
What happens when the change doesn’t come?
“What we’re seeing is ‘organisational lag’, where the brightest stars, the ones pushing for organisational change are moving on faster and faster, starting their own businesses or job hopping with the organisations they left behind struggle to implement the changes they had suggested.”
I think this is one of the other elements driving people to not want to be a permanent employee, and the contingent space is a stepping stone for a lot of those people.
Industries who will be most impacted by the changing workforce
Finance and insurance
“The financial services have seen a lot of change recently, and they’re trying to keep on the front foot. We’re seeing a huge number of start-ups in the financial services, tech space who are going to be pushing disruption onto the big banks and insurance agencies. The continued move away from cash combined with the ability to interpret big data will is an opportunity too big to miss for eager start-ups as well large organisations from other industries looking to diversify.”
“Age care is going to see some huge disruptions and changes in the coming years as we see a high proportion of the population enter retirement age and further. The way people are wanting to be cared for is changing, and so other industries will have to keep up. More and more we’re seeing people wanting to stay in their homes for longer, we’ll see technology aid in that and there will be a knock on effect. Many organisations will be looking at how to profit in this area and so will push innovation and the way in which people in the healthcare industry work.”
Finding New Ways of Working
“In emerging markets, Latin America, Africa, we’re seeing a push towards a way of working that bypasses what has been traditionally done in the developed world.”
“When you look at Africa, and the way people are accepting payments on mobile etc. you see that they’re looking at what’s happening in the developed world and replicating it quickly; but then they are building on that.”
They’re building their markets on the trends that are shaping the world now, rather than going through the last 100 years of corporate baggage.
“What we’re going to see as a result is more and more new and exciting ways of working coming out of Africa, Latin America and China and we will need to be more open minded and able to pick up the best elements. We in the West aren’t used to that. We’re used to being seen as leading these areas, but because of all the traditions, history and encumberments we have, we’re not as agile or nimble as we could be.”
Think global; Act local.
“As an organisation Allegis knows that we need to have the ability to share what we learn from all labour markets. We know how important it is to know what’s happening in both emerging and established markets. Our footprint enables us to pick up best practice, and apply it to clients on the other side of the world. From a globalisation perspective, ‘think global; act local’ is something that we’re bringing to our clients. We run pilots with a client and analyse the results of trials, but it means that once we’ve tested it out with three clients over three different industries we know exactly what’s going to work. Then we have the ability to slip these solutions into a new geography or new client really quickly.”
To learn how you can start preparing for the future, and building the workforce of 2020, join Simon at #CWF15 in Sydney on 22-23 September. Simon will be joined by Kevin Wheeler and Peter Oreb who will discuss the changes organisations need to make today, to build the workforce of tomorrow. To participate, register your ticket for the event here.
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