Blended Workforce – Through the CHRO’s Eyes

The gig economy has grown surprisingly large and surprisingly fast, and it is time that the CHROs leverage this immensely flexible and productive workforce segment for growth.

The advent of the blended workforce- a holistic mix of full-time employees, freelancers, part-time workers, and contractors. Although most organizations may not be familiar with the term, they have already or are about to deploy blended workforces in their organizations.

GAINING GROUND
An interesting aspect of the People Practices Leader’s perspective is that the tremendous benefits and flexibilities that an organization’s blended workforce brings work both ways. While, at one end, the flexibility to the employees and team managers is unparalleled, there is also an added advantage to talent managers and CHROs that is not very apparent at the outset. Organizations gain from the availability of skilled workers on-demand, and in the process, benefit from the associated economies of contingent, short-term scale-ups.

This trend is supported by the fact that the post-recession economy has seen the rise of the ‘gig’ economy – skilled professionals offering their services in high-end, niche categories as freelancers or contract employees, by choice. In fact, in a manner of preference over conventional employment. The statistics show the rise- 40% of skilled workers in the US economy today are contract workers, a rise of more than 50% over the last five years.

Driven by several initiatives in governance and socio-economic factors, including the post-recession era of the 2010s, the rise of telecommuting and smart mobile technology, availability of health insurance to non-permanent workers, aka Obamacare, and the unstoppable rise of the sharing economy, the blended workforce is now a mainstream phenomenon.

A KEY DIFFERENTIATOR
As HR specialists, it’s important to know the difference between a blended workforce and the erstwhile temp workforce of yesteryears. While the temp workforce was largely managed and deployed by a staffing agency or vendor, the employees were expected to work as per regular work hours of the organizations. They were also required to be physically present at the workplace as per organization policies. The compensation was administered at regular intervals, and almost all facets of organization policies were required to be adhered to.

Compare that to the blended workforce of today – not only is each specialist working for the employer under a different set of contractual terms, their compensation is also largely outcome driven. With freelancers and contract workers, the employer is paying for an outcome or the time required for the completion of a task or assignment. Talent Managers, and of course, CHROs, need to adapt to this thought process to succeed in their workforce initiatives and administration.

CHALLENGES
While the advantages are unsurpassed, there are a few facets that need careful consideration when managing a blended workforce. The major ones are:

Performance Management – Freelancers and contract workers, when hired on a long-term project-specific basis, are usually beyond the purview of the standard performance management and appraisals as permanent employees. This has been a major challenge in organizations that deal with blended workforces, and with inadequate best practices for performance management, this has often led to the next challenge mentioned here

Freelancer Churn – Extremely high rates of turnover are common in blended workforces, and as of now, there seems to be no set of specific guidelines that a CHRO can implement to keep a check on this. The analogy of the revolving door seems apt here. The average turnover rate stands at 33%. Simultaneously, more than 42% of contract/consultant/freelancers are working on multiple projects with multiple employers at the same time today.

Organization Culture – Maintaining a consistent organization culture, the hallmark of workforce engagement, is a difficult proposition when CHROs are not at liberty to enforce employee engagement activities on contract workers. The result is an organizational culture that may be productive at times but is in disarray otherwise. The CHRO, in such circumstances, needs to provide a one-size-fits-all solution for the permeation of an integrated, comprehensive work culture across the organization.

The rising trend of blended workforces will continue to remain a rapidly growing phenomenon across the world, and its efficient management is a matter that ought to be right at the very top of every CHRO’s agenda.