A founders guide to scaling with the Blended Workforce
What is the Blended Workforce?
The Blended Workforce is a rapidly growing trend in the tech industry.
The dynamic of the Blended Workforce is an organization having a mix of full-time, part-time, contractors and freelancers all working together.
The rise of the Blended Workforce came from the world’s latest recession in 2008. Companies made large scale cutbacks on costs including employees, this set the wheels in motion for the rise of freelance market where workers no longer needed the security of full-time employment. Freelancers now have the opportunity to work multiple contracts and focus on the projects they enjoy doing.
From the company’s standpoint, one full-time employee hired at a rate of $50K a year could cost $70K a year due to salary, taxes and benefits, hence why blending talent from the freelance market can prove more cost effective and efficient. The advances of technology has made geography a moot point when it comes to hiring.
People can now come together and work on projects from anywhere in the world.
How it works?
There are no strict guidelines to how the Blended Workforce should work for your company. It is a model that can coexist with current strategies and be amended to suit your company’s needs.
An example of this would be hiring an extra pair of hands on a short-term contract to help achieve certain goals and deadlines. Another example would be a company hiring a certain skillset for a unique project, a skill that is not currently employed and might not be a long-term need. The ecosystem of your company is complex, a flexible workforce can help save costs, be more efficient and allow your company to do projects that you might not have been able to take on in the past.
Let’s take Google’s European HQ in Dublin as an example, here Google have the same amount of FTE’s (Full-Time Employees) as they have contractors. The reasons Google use this Blended Workforce in Ireland is so they can fill temporary needs, the hiring bar for FTE’s is higher so getting contractors is much quicker, the work is usually outside Google’s core competencies which means the career life of the contractor is based solely on the project they are working on and managing projects with capitalised budgets means hiring project teams, you generally can’t capitalise employee costs.
Who is talking about it and what are they saying?
Google; Google is investing $50 million to be a leader of research into the Blended Workforce. Google employs nearly 100,000 people in the US alone so with predictions that the freelance economy could be 43% of the US workforce by 2020 it is important for them to be a true leader in the movement.
The reason for Google’s investment into this research is because they believe that a third of the skills they will require in the future are uncommon today.
In addition to this, Google feels that getting these uncommon skills in the future will be done through working with independent contractors as the landscape keeps moving to a larger freelance economy.
Accenture; Accenture have teamed up with WorkMarket to help automate the Blended Workforce, This quote from the article speaks volumes for the impact the Blended Workforce is having;
“The digital labor revolution is happening now, and with great leaders like Accenture on the right side of the shift with us, it’s happening faster than ever. Is your business ready?”
PWC; PWC undertook a research project with CEO’s around the world to figure out what they think about for the future of their respective companies. The outcome suggests that 77% of CEO’s feel not finding the right talent is impeding the growth of their businesses and using the Blended Workforce model will be a way to overcome that barrier.
Forbes; “The Blended Workforce is on the rise” 93% of companies have identified the Blended Workforce as a solution to help their businesses grow.
Steps to implement
1. Clear vision of what you are looking for and how a Blended Workforce will work for your business.
As a leader within your business it is up to you to establish a clear vision for how a Blended Workforce will work and be successful. This is a process of thoughtful creativity, asking multiple questions to figure out how external workers would work with the specific teams they are assigned to.
Where do I find high skilled tech talent? How does your accounting department handle the work? Am I legally able to work with sole proprietors?
2. Long term strategy
Having a long-term strategy is crucial to the success of your Blended Workforce. As we’ve seen from the Forbes article this tech trend for companies like yours is growing rapidly so even if the need is for one person right now, there must be a strategy that allows for 10x growth of bringing on contractors to your team.
3. Well defined goals and work strategies
Having well defined goals and success metrics will help you quantify how your Blended Workforce strategies are progressing. This will also give you good indications if something needs to be tweaked or enhanced for more success.
4. Find a reliable and trustworthy resource to find talent
Traditional recruitment is the model which has been used in the past and is often a success. However if your goal is to hire quick on a contract this option might not be worthwhile with costs that often exceed 25% of the contract.
We obviously have a bias directed to online platforms but our bias is based on facts and research. Online talent platforms are transforming hiring by helping to quickly connect companies with jobseekers that match their needs. Some important takeaways from The McKinsey Report;
- Online talent platforms could dramatically decrease the operating costs of hiring new employees. According to the report, “The adoption of [online talent platforms] could increase the output of companies by up to 9 percent and reduce the cost of recruiting talent and of human resources generally by as much as 7 percent.” [http://www.mckinsey.com/global-themes/employment-and-growth/connecting-talent-with-opportunity-in-the-digital-age] So not only can these platforms reduce the costs associated with hiring new talent, they can also increase companies’ output by helping improve worker productivity.
- Online talent platforms could potentially help 230 million unemployed workers find a new job more quickly by matching them with relevant opportunities. Of this number, up to 60 million people could find job openings that are more closely suited to their unique skills.
- College students stand to benefit from the increasing ubiquity of online platforms because digital platforms increase the transparency of in-demand skills. This can enable students to make more informed education choices with their desired careers in mind. This ensures that more of the workforce is better qualified for their desired jobs, and are hired more quickly, reducing unemployment and underemployment rates for recent college graduates. [https://www.washingtonpost.com/news/grade-point/wp/2016/05/02/graduating...
5. Focus on Compliance
The small business association provides a great introduction into the difference between an employee and an independent contractor. Jeff Nugent, managing director of a contract worker classification firm based in Toronto, has found that companies with centralized management of Blended Workers often have the best results.
What does this mean?
The Blended Workforce is a growing movement enabling companies to cut costs, add new skills to their teams, hire on a needs basis as new skills are needed or as an extra pair of hands to meet deadlines and targets. When planned and executed with skill your company will become more productive, more efficient and more creative.
