The Future of Work and workforce ecosystems

“The coronavirus, and its economic and social fallout, is a time machine to the future. Changes that many of us predicted would happen over decades are instead taking place in the span of weeks.”
Anne Marie Slaughter, President of New America Foundation.

We are living through major social and workforce changes; changes that are accelerating organisational and workforce transformations. The workforce is moving from being predominantly employee-based to include a more diverse group of players. An ‘ecosystem’ that includes external parties such as contractors, service providers, gig workers and even bots and intelligent automation, that don’t work directly for an organisation yet can be vital to its success. Taking the workforce beyond its organisational boundaries means that a company’s strategy, leadership, culture, and processes will need to adapt and evolve.

A recent research paper, from MIT Sloan Management Review and Deloitte¹, highlights that most managers consider their workforce to consist of not just employees, but also other external workers.

The shift towards organisations using a holistic workforce ecosystem to deliver on key strategic objectives and priorities shows no sign of slowing. Responses gathered through our research indicated that:

• 56% respondents expect an increase in technology for workforce augmentation (e.g., use of robots, chatbots, and other forms of intelligent automation)
• 32% expect an increase of contractors (e.g. gig workers and temporary workers)
• 29% expect full-time/part-time employees to increase
• 28% expect external contributors to increase (e.g., crowdsourcing innovators, lead user innovators); and
• 24% expect service providers to increase as a category within their workforce e.g. professional services companies embedded into a project team.

However, in contrast to this, most workforce-related practices, systems, and processes focus only on internal employees and not their external workers.

The new trend

The trend towards a holistic workforce ecosystem approach has arisen from the need for an integrated way to managing diverse workforces, where external workers play a large role in delivering company value².This structure encompasses individuals, from within the organisation and beyond, working to pursue both individual and collective goals.³

Evolution in management practices

Current approaches to workforce design have been in place for generations and most of their processes were created to support a traditional employee life cycle approach. That is why moving to a workforce ecosystem approach calls for a shift in practices, including adjusting underlying philosophies, systems, and processes. Below are a few examples from the Workforce Ecosystems research⁴ on key shifts in management practices:

The retail perspective

Whilst the proportion of consumers using online as a channel for their main grocery shop (26%) has remained stable in Q2 2021, the number of people using the large supermarket store channel continues to decline falling by three percentage points (to 54%) compared to the same period a year ago.

Of course, future of work is a global concept, but let’s think about this closer to home. With a significant number of retailers in the North of England, what does Future of Work and Workforce Ecosystems mean to them? With working from home continuing, and data from the Deloitte State of the Global Consumer Survey⁵ showing that consumers are continuing to exercise caution over ‘in-person’ retail, it seems that the trend for online grocery shopping is here to stay.

But what if a retailer doesn’t have the infrastructure in place to offer a delivery service? It may choose to create this in-house, or it may need to work with an established delivery service. This is just one example of workforce choices facing the sector today. Retail, like many other industries, is recognising the value of shifting its mindset to include a wider network of tools and skills too, such as using bots and other technology. Using these workforce ecosystems is likely to vary however, depending on the nature of talent needed, scarcity of skills and the availability of alternative options being considered.

Taking action

Delivering on business objectives now requires a new way of thinking about talent. Inefficient balance across workforce ecosystems can increase costs, create leakage of key skills and talent, and potentially impact business performance.

It is important to address these pain points to create a holistic future-focussed view of the company workforce ecosystem. Our experience helping organisations to more effectively manage their workforce ecosystem has shown that taking a three-step approach to creating the right balance can unlock both short- and long-term savings potential:

1. Gain visibility of the workforce ecosystem

Use data to gain insight into the workforce ecosystem, identifying unusual spend, validating areas of cost-saving potential, identifying areas of ineffective internal versus external workforce balance and identifying differing working patterns and behaviours between sites/functions/business units.

2. Optimise the workforce

Apply hypotheses to prove/disprove and quantify improvements through stakeholder engagement and data science to validate, roadmap and implement solutions to identified areas of improvement.

3. Total workforce strategy planning

Use advanced analytics to predict how work could change in the future, balancing outsourcing, contingent workforce, and employees to create a total workforce talent strategy. A holistic workforce strategy plan will then go on to consider the impact of the new strategy on a range of talent aspects including onboarding, knowledge management, capability development.

This new approach to workforce is part of the future of work evolution and brings a significant departure from the traditional views of workforce composition, with employees performing work along linear career paths to create value for their organisation⁶. And, if the nature of work is changing, this needs to be accompanied by a shift in how companies approach their workforce organisation, and how their current systems, processes and leadership need to adapt and respond to the new reality.

¹ Workforce Ecosystems: A New Strategic Approach to the Future of Work (mit.edu)
² idem.
³ idem.
⁴ idem.
⁵ Consumer behavior trends state of the consumer tracker | Deloitte Insights
⁶ Workforce Ecosystems: A New Strategic Approach to the Future of Work (mit.edu)