Workforce Ecosystems: Managing the Future of Work
New research from MIT Sloan Management Review and Deloitte indicates that workforce ecosystems can help leaders manage a distributed, diverse group that crosses organizational boundaries.
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A vast majority—87%—of global managers consider employees and other, nonemployee workers who create value for the enterprise to be part of their workforce, according to “Workforce Ecosystems: A New Strategic Approach to the Future of Work,” a recently released report on the future of the workforce by MIT Sloan Management Review and Deloitte.¹ While the idea of organizations relying on a variety of contributors—including contractors, service providers, gig workers, marketplace sellers, and even bots—to get work done isn’t new, several significant shifts are driving growth in these ecosystems, among them the changing nature of work, worker preferences, and the ways organizations are using technology to engage with and manage extended workforces.
The search for an integrated approach to strategically managing a diverse group of internal and external contributors has led many forward-thinking executives to adopt a workforce ecosystems approach, the report finds. This new, more holistic view of workforce management provides executives with new perspectives and flips a perennial strategic question. Instead of asking, “How can my workforce support my strategy?” leaders can ask, “What strategies become possible with my workforce ecosystem?”
Understanding Workforce Ecosystems
Given these benefits, workforce ecosystem participation is increasing. The report finds 54% of survey respondents place significant value on gaining ideas and skills from contributors who do not work for their organization, while 33% will rely more on external participants, such as gig workers, in the next 18 to 24 months.
In line with this ecosystem mindset, organizations are demanding new skills and increasing the use of online platforms to access talent. Ninety-one percent of respondents say that upcoming changes to their organization’s business strategy require them to improve access to new capabilities, skill sets, and competencies. Fifty-two percent, meanwhile, expect to use online platforms to access external talent in the next 18 months.
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Managing the Workforce Ecosystem
Today, most workforce-related practices, systems, and processes focus only on full- and part-time employees, not external workers and other contributors. Consequently, while many organizations are significantly adjusting their definition of the workforce, they often lack a cohesive approach to managing it. According to the report, only 28% feel they are sufficiently preparing to manage a workforce that will rely more on external participants.
Workforce ecosystems can help organizations move from a traditional employee life cycle model to a more holistic approach. When the workforce changes from being primarily employee-centric to encompassing a diverse community that crosses an organization’s boundaries, core talent processes must evolve. Most of these processes have been in place for generations and were designed to support a traditional employee life cycle. Moving to a workforce ecosystem approach calls for a shift in practices, including adjustments to underlying philosophies, systems, and processes.
To address potential roadblocks, management practices within this approach should be reconsidered across several areas:
- Workforce planning could transition from taking a narrow view of employee roles to adopting a definition that includes both internal and external human and digital contributors.
- Talent acquisition could change from a decentralized HR function to an integrated, multifunctional process that spans HR, procurement, IT, and other teams.
- Performance management may move away from annual reviews to become better aligned with ongoing organizational needs.
- Learning and development efforts should support strategic skills and competencies.
- Organizational structures could change to accommodate all aspects of the workforce by shifting toward more team- and network-based approaches.
Before implementing a workforce ecosystem as a structured approach, leaders should keep in mind the following challenges:
- Strong internally focused organizational cultures, resistance to change, and organizational silo behavior can stifle workforce ecosystems.
- Labor-related legal and regulatory issues worldwide present complex hurdles.
- Quality, brand, and intellectual property questions may arise, such as “Who has the right to use created property and under what conditions?”
- Pay inequities and parity within and beyond organizational boundaries may cause social justice issues.
Effectively managing a workforce that includes internal and external players in a way that is both aligned with an organization’s strategy and consistent with its values is a critical business necessity. However, legacy management practices often remain centered on increasingly outdated views of the workforce. Executives can either continue to manage employees, external workers, and others through different, often parallel, systems, or they can develop a new, more holistic approach that spans organizational boundaries and different types of workers and provides promising opportunities to harness their full potential.
To learn more, visit the full report, “Workforce Ecosystems: A New Strategic Approach to the Future of Work.”
—by Elizabeth J. Altman, assistant professor of management, Manning School of Business, UMass Lowell; David Kiron, editorial director, MIT Sloan Management Review; Jeff Schwartz and Robin Jones, principals, Deloitte Consulting LLP; and Diana Kearns-Manolatos, senior manager, Deloitte Center for Integrated Research
1. The global survey includes insights from 5,118 professionals and leaders across 138 countries and 29 industries, plus 27 executive interviews, to understand how they approach strategic workforce management issues.
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