The growth of the flexible workforce is undeniable. Many experts predict that by the year 2020 the percentage of the US workforce that is non-employee could approach 50%. Whatever we call these workers – freelancers, independent contractors, consultants, side-giggers, etc. – there is no question that they are a key enabler for organizations to get vital work done. As we look forward there are several important workplace trends that we can expect to hear more about in 2016 which are being driven by flexible workers.
Much like the growth (or decline) of a glacier, most workplace trends evolve at a relatively slow pace. But if you’re really paying attention you can begin to see their approach and predict their impact. For example, the outsize influence of the Baby Boomer generation (those 76 million folks born between 1946 and 1964) who also happen to be the largest and best educated generation in US history. This generation has been setting workplace trends for their entire careers, and as they now begin to retire in volume their impact still lingers in many ways. For example, many of these knowledge workers still have valuable knowledge and experience to share, and a need for income, they just don’t want to work a 9-5 job.
All of the trends presented in this article already exist today, however their impact will grow as 2016 unfolds. It should also be noted that most workplace trends used to be pioneered by the largest companies, which makes sense because in prior decades most workers were employees of a major company for their entire career. Today, these traditional large organizations are under unprecedented threat of disruption, which requires them to be very sensitive to these changes and also experiment more with early adoption.
With the explosion of technology, and younger generation’s desire for more freedom and control, there has been a virtual explosion of entrepreneurship in the US and around the world. This is the sandbox which is driving a lot of today’s workplace innovation. Today’s knowledge workers, the freelancers and independent consultants who provide their valuable services on a contract basis, are in the drivers seat. Not only do they need to keep abreast of rapidly evolving workplace needs in order to keep up-to-date with the most in-demand skills, they must also pioneer new, flexible, ways to get that work done for their clients. For this reason, the flexible workforce is a leading indicator (and driver) for the evolving workplace.
Here are four significant workplace trends that we expect to have a significant impact in 2016:
1 – The Growth of Flexible Workforce
Two-thirds of the new jobs added in the past year were staffed with flexible (non-employee) workers. The flexible workforce makes up about 20% of the workforce population today, and many workforce experts project that this number will increase to 40-50% in the next 10 years.
It is no secret that contingent work is ideal for individuals with non-traditional families (Defined as both parents working or 1 parent households, which, by the way, constitute 83% of all US households according to the US Census Bureau!), students who are continuing their education but understand that they need real world work experience before they can land their dream job, or even people that want to be able to travel for extensive periods of time and work on project-based work in between adventures. These workers also provide flexibility, access to critical skills, and can also provide some financial relief to employers who want to bring on SME’s to help them during periods of high growth, but can’t justify the full-time employee expenses for a traditional FTE role.
As a result, more workers than ever are choosing to be independent “businesses of one”. Fast Company magazine estimates that by 2020, “about half of non-governmental workers in the U.S. will be contract workers – not permanent, full-time employees.” Ardent Partners predicts that by the end of 2017, nearly 45% of the world’s total workforce will be comprised of contingent workers, including IC’s, SOW-based workers, and freelancers. While the US Bureau of Labor Statistics puts it at 40%, which is a dramatic increase from their estimate of 24% in 2001.
Regardless of which prediction is right, it is clear that the flexible workforce is here to stay, will continue to grow, and cannot be ignored by today’s HR leaders.
2 – The Growth of Virtual Businesses
A continuing trend within traditional companies is to become more “remote friendly” for their employees. Typically enabled by technology deployment, these companies have developed enlightened workplace management systems that allow work to be done wherever and whenever is best for the worker. An emerging paradigm shift is companies that are built to be mobile from the start. This is a radical shift in the very concept of a company: evolving from a top down hierarchy of managers and employees, towards an evolving network of teams consisting of traditional employees and flexible workers.
Enabled by rapid advancements in communication technology, these “remote-first” company structures can provide a number of benefits, ranging from flexibility, rapid on-boarding of new workers, 24×7 global development cycles, better talent access and retention, and significant cost savings.
3 – Work-Life Balance
While the leading edge of Baby Boomers are retiring, many are still wanting (or in many cases, needing) income and some level of a professional role. They just don’t want a traditional full-time job. In addition, as an off-shoot of more Millennials in the workforce and more flexible workers overall, we’re seeing a growth in workers demanding greater work-life balance.
Historically, when progressive employers talked about work-life balance they focused on the life side of the equation. Companies sought to provide more flexibility to allow their employees to better manage their time and personal lives. However, as employees were given more freedom, there was a growing technology-enabled expectation for them to always be available. This “always-on” dynamic, with expectations of always being responsive to emails or phone calls regardless of day or time, had the opposite effect: it led to a more stressed workforce.
Companies will continue to deploy technology, harnessing new tools and systems to aid employees in being better connected, more collaborative and highly productive from virtually anywhere in the world, so long as they have internet access. However, the really smart employers are also going to focus on how to make work easier, more enjoyable, and more meaningful to their workforce. This client-of-choice mentality will allow progressive organizations to both attract and retain the very best talent.
4 – New Leadership Expectations
The growth of the flexible workforce is also driving a shift in the traditional leadership paradigm. In prior generations, company leadership was top-down. This worked well for traditional, slow-growth and slow-evolution, businesses that had armies of employees to manage. This doesn’t work in today’s rapidly changing, fast-growth, environment where many of the worker aren’t traditional employees, but rather a roving band of knowledge workers for hire – going from one interesting project to the next.
Company leaders have traditionally been selected based on their industry experience and company loyalty. However, this is shifting rapidly, it is much more common to see leaders of big organizations who did not spend their entire career climbing the corporate ladder. The very nature of being a manager has changed, companies today are much less hierarchal than in years past. Instead of using a top-down management style, today’s leaders must be collaborative and inspirational, so that they can harness the power of the total workforce. Company leaders today must think about how they enable their organizations to become a client-of-choice for the total workforce (both traditional employees and flexible workers).