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We’ve seen a trend for companies moving towards having an integrated workforce, but is it a temporary measure or is that the future of work?
Let’s examine the benefits and business implications of a blended team.
what is an integrated workforce?
An integrated workforce is a talent management strategy in which your workforce is a combination of permanent staff, contract workers and self-employed freelancers.
The 2018 Labour Force Survey from the Ministry of Manpower showed that 86% of Singaporeans were employees, and the remaining 14% were self-employed. There was also an increase in the proportion of employees on fixed-term contracts, from 6.4% in 2017 to 7.2% in 2018.
A study by Deloitte projected that the number of self-employed workers in the USA will triple to 42 million people by 2020. While over in Europe, freelancers are the fastest-growing labour group, with their number doubling between 2000 and 2014.
We’ve also observed that an integrated workforce is particularly popular for companies in the technology industry. Companies like Alibaba, Microsoft and Google hire more contractors and freelancers than permanent staff.
Another Deloitte study revealed that 33% of respondents reported extensively using contractors and freelancers for IT, 25% for operations, 15% for marketing, and 15% for research and development.
4 benefits of an integrated workforce
1. enables better talent management
We’ve noticed that companies with an integrated workforce tend to hire permanent staff to manage day-to-day operations and employ contractors and freelancers to handle seasonal work or one-off projects. Professional contractors are either hired for their niche expertise or to manage anticipated workload.
For example, companies usually hire financial planners before the start of the financial year, but won’t need to keep them as an additional headcount throughout the year. Therefore, it makes sense to hire them on a fixed-term contract basis. Within Human Resources, performance evaluation tasks might also be outsourced, as employees tend to be more honest and outspoken when they speak with an independent party during 360 reviews.
Technology jobs are particularly well-suited for contractors or freelancers as there are often one-off projects. For example, banks might want to deploy a chatbot to automate customer requests. Companies would only need an expert to help them set up the technology by a certain deadline, after which the skills will no longer be required to maintain the system. In this case, hiring a contract worker makes the most sense.
All this shows that having a contract employee or freelancer enables companies to be more flexible when it comes to managing their workforce needs, lifting the pressure on permanent headcount budgets.
2. better access to talent
We’ve found that companies that hire talent on contract basis can speed up their search process for filling permanent positions. When companies hire contractors and freelancers on a regular basis, they are inherently building up their talent pool. Essentially, they can tap on this same talent pool to fill any skills gap that are currently lacking in their workforce.
One of the most common scenarios is that you may be satisfied with the work from a contractor, but do not have a permanent role for them in the organisation just yet. However, should a permanent position come up a few months later, you know just who to call. You can then skip the search and interview process and hire the contractor you had previously worked with, significantly reducing the time to fill the role.
3. access to variety of perspectives and skills
We’ve also observed that many contractors and freelancers can bring a wide variety of skills, perspectives and work experience to the companies they work for. If the talent pool is very small and the workforce lacks the necessary skills, we’d always suggest hiring contractors for fixed-term contracts or projects because they can provide those niche skills.
Contractors can transfer knowledge and share the capabilities that they’ve developed via their work experience in other jobs with your workforce. We’ve also observed that one of the most valuable contributions a contract worker can bring to the hiring company is their fresh perspective.
Permanent staff, especially those who’ve been with the company for a long time, can be set in traditional ways of working and develop tunnel vision. Contractors can come in and shake things up with their new ideas and approach. For a company to remain competitive, they often need someone who can bring an outside-in approach to uncover existing gaps and troubleshoot from there.
4. creates positive competition in the workplace
We also encourage companies to employ contractors and freelancers as the arrival of new, highly skilled workers could drive positive competition in your workplace.
In an environment where workers’ skills will determine their employability, new contractors not only enable knowledge transfer, they can further motivate your permanent staff to be proactive in improving their skills and work performance.
how will an integrated workforce affect your business?
1. encourage and accelerate innovation
Hiring highly-skilled and experienced contracting professionals can create a competitive environment in your workplace and compel your employees to step up to be creative and come up with more new ideas.
Gucci is one employer which encourages their staff to pitch new ideas. The CEO of Gucci, Marco Bizzari, frequently lunches with employees under 30 and asks them for three ideas about how to improve the company. Some industry experts have surmised that Gucci’s decision to go fur-free was one of the ideas pitched by the company’s young talents.
2. high human capital
We foresee companies will increasingly seek to hire highly-skilled contractors and freelancers to fill the skills gap they have in the workforce. Traditional contract jobs, such as mundane bookkeeping work, will be automated in the future and companies will start to hire more problem-solvers and decision-makers moving forward. This trend in Singapore is driven by technological advancements, and demand for workers with advanced skills in areas like deep tech and project management will increase.
We also recommend human resource departments to partner closely with the decision-makers in the business to fill positions based on the actual skills that are needed, rather than use a templated job advertisement to search for candidates. For example, if you are looking to hire a corporate communications manager, find out from the direct line managers if the primary job responsibility is media relations, investor relations or content marketing. Identifying the actual skills gap in the team will help you hire the right person for the job.
With the rise in demand for highly-skilled professional contractors, we also predict that the reward you offer the workforce will increase to meet the increasing salary expectations. Since the skills and capabilities of the workforce will be elevated in the long-run, employees will expect a higher pay. So you’ll not just be paying for headcount, but also for their skills that you’ll need to stay at the forefront.
We’ve seen that companies find it more flexible managing contractors and freelancers as they can move them between teams, depending on their skills.
For example, let’s say you have hired a compensation and benefits professional to develop new salary and bonus structures that are in line with the business’ sales and marketing efforts. This person can also train your employees on how their additional benefits will be calculated with the new structure, instead of hiring another learning and development professional to do it.
Maybe you’re a public relations agency and you’ve hired a talented designer to create the visuals for a few PR campaigns. If that designer happens to be skilled in animation too, you can choose to put them on the animation project with another team, when the need arises.
In conclusion, an integrated workforce is going to be the go-to model many companies will adopt in the future. With its flexibility, the integrated workforce will benefit both employers and employees and it will potentially enable companies to tap into a variety of skills and innovative ideas.
thinking of building an integrated workforce but don’t know how?
At Randstad, we have recruitment specialists who look after permanent and contract recruitment. With an in-depth understanding of the career aspirations of your talent pool and industry knowledge, we’re in the best position to advise you on your workforce management needs.
Connect with us today to understand how you can make a difference to your organisation.