By: Meghna Rustagi -- Research Analyst, Temporary Labor â€“ HR Services
23 October, 2017
The digital technology has impacted the entire gamut of businesses around the world. Corporates are looking at digital innovation as enablers to transform their workforce, projects and entire organizational structure into a highly adaptable and change-ready enterprise, and not as disruptors. The main backbone of any organization is workforce who should be easily adaptable and change according to the demanding needs of the market. This type of workforce is referred as ‘Liquid Workforce’. To enable smooth transition between people and technology, workforce needs to be re-trained to sustain survival. With the digital economy constituting 22 percent of world’s economy, companies have to embrace technologies at the earliest.
The Liquid Workforce is the future of work across organizations and industries. It is very important for organizations to be forward-thinking and maintain a competitive advantage in a market that requires constant innovation to stay successful. The trend is here to stay and by 2020, it has been observed and analyzed that more than half of the entire workforce will convert to Liquid Workforce. The future is automated and human jobs will be drastically reduced in order to survive in this competitive environment.
Baby boomers are declining year by year and companies are facing few challenges with respect to workforce and workplace. Global companies have been facing differences due to proper skill set matching job roles, labor shortages, and implications of Visa restrictions on immigrants by countries such as the U.S., UK, Singapore and Australia. Moreover, two major observations have been made which are: huge gap between demand and supply of labor in the staffing market globally (witnessed in multiple countries) across industries and a constructive disruption of technology in the HR services industry.
With the rise of millennials in the global economy, organizations call for people with highly agile skillsets, known as liquid workforce or freelancers. This type of workforce helps to overcome the constant changing needs of the market. However, we should know how Liquid Workforce is defined by organizations and industry experts.
Definition of Liquid Workforce:
Leading enterprises are reshaping themselves to rapidly adapt to any disruption. To drive this change, they need to become agile at each level of their business operations: skills (people), projects and organizations. Therefore, global organizations are developing and investing in tools and technology which helps them to implement Liquid Workforce in their workplace as change is very fast and dynamic across industries and regions.
With this growing trend in automation, industries have started to indulge themselves in supporting cloud-based platforms to offer skills required for automated jobs. Industries such as Information Technology, Insurance, Financial and Banking services, and HR Consulting services, Manufacturing and Retail, Research, and Pharmaceutical have been severely affected by this trend. This shift has imposed global organizations to partner, invest and develop in tools with technology-based platforms to enable agility with modern and diverse workforce especially freelancers.
Companies such as GE, Accenture, Adobe, LinkedIn, Walgreens, WeWork and NAVCO have partnered or developed tech-savvy platforms to integrate workforce agility.
Buyers’ perspective through case studies:
Another enabler which helps in this transformation is Careers Marketplace, a digital jobs platform providing employees with transparent opportunities based on skills and passions. This way the company is able to retain high value people and train them according to their skill sets.
As a result, employer (company) and employee are becoming agile. In this way, the future of work will unfold and within 10 years, there will be a “fully liquid enterprise” with no full time employees. Moreover, Accenture has partnered with WorkMarket to automate workforce from end-to-end and provide more agile solutions and vendors that can scale virtually on-demand.
With the help of Kickbox, Adobe has distributed 1,200 boxes in last two years. Other companies have started to build a similar approach by collaborating tools and cloud-based workforce allowing anytime, anywhere working culture. They understand that successful projects require different combinations of internal employees, freelancers, and technology for each new challenge.
Suppliers Perspective through tools/websites developed to device liquid workforce solution:
There are numerous tools and websites offering freelancers and independent contractors support to global and mid-small sized companies. Service providers such as Freelancer.com, Guru.com, SimplyHired, iFreelancer, Peopleperhour, etc. have been providing support and helping companies to complete positions with advanced skill sets.
Buyers and suppliers have different perspective with respect to adoption and implementation of the liquid workforce. In the current scenario, the mindset is towards changing the static workforce into liquid/millennial workforce. By 2020, the mindset will be completely changed and will result in 45 percent of the global employees becoming a liquid workforce. As a result, this category of employees will be the most preferred and an adoptable trend by all the companies across regions and industries.
Transition in Workforce Approach:
Source: Supplier Interaction, Beroe Analysis
Advantages enterprises achieve in sourcing a Liquid Workforce:
Liquid Workforce has been coined by different names by different people. Industries are experiencing digital disruption where business goals are changing regularly, where organizations must reinvent themselves to be ahead of others in the market. This change and shift towards liquid workforce provides numerous benefits to organizations.
Risk Mitigation: (Conclusion)
By 2020, millennials or liquid workforce will make up over a third of the global workforce. Employers need to take a fresh look at their people strategies and workplace development. Liquid workers are shaping and being shaped by the world of work. They are redefining the employee-employer relationship. Freelancers, contract workers, vendors, full-time employees, and part-time employees are beginning to work together in agile ‘labor clouds’ that deliver serious results.
While enterprises have encouraged the concept of Liquid Workforce across industries and domains, automation is also taking place replacing humans. Several jobs are now at risk with the scope of automation expanding. In practice, automation depends on several factors such as technical feasibility, costs to automate, relative scarcity, skills and cost of workers, benefits of automation beyond labor-cost substitution, and regulatory and social-acceptance considerations. It also depends on sectors as well as activities which need to be automated.
As the nature of work evolves, the risk also increases with respect to compliance to labor laws. Laws haven’t kept pace with innovation and with steep penalties and the potential for back-pay settlements, the cost of non-compliance can be massive. However, the liquid workforce is not averse to risk and is casual about the way it works.
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