Understanding the Optimal Workforce mix has never been more complex

The pandemic transformed the world and presented organisations with the opportunity to modernise and find new growth potential. The Great Resignation only accelerated the criticality of the Extended Workforce as part of an organisation’s talent pool. The ability to work more flexibly has never been so highly valued by candidates as part of their decision-making process when applying for roles.

Today, with rising costs, rapid advances in technology, economic uncertainty, and the war for talent - employers are being forced to become more flexible when it comes to creating a workforce strategy that ensures success for the future.

Contingent workers historically addressed short-term tactical gaps in an organisation’s permanent workforce. Fast-forward, and today the Extended Workforce has become the major talent innovation of this millennium culminating into a large, growing, and increasingly strategic part of the global workforce.

Most leaders expect that not only will the Extended Workforce grow as a % of their total workforce, but also the worker engagement models utilised as part of an Extended Workforce will broaden into many subcategories.

 

“77% of executives believe freelance and gig workers will substantially replace full-time employees within the next five years”

Mercer Global Trend Report

A recent Workforce Solutions Buyer Survey (2023) from Staffing Industry Analysts (SIA) indicates that organisations expect an increase in external workforce as a share of their total workforce over the next 10 years with the regular/permanent employee population decreasing.

Traditionally discussions around different types of workers have focused on the merits (challenges) of one vs the other. Workforces can be - and should be - blended strategically to create the most talented workforce to support an organisation in achieving their strategic goals.

Fast forward a few years and an organisation that has an integrated talent strategy that adopts a “skills first” approach and has a leading resourcing programme that asks a simple question: “who or what is the best-fit talent for this specific initiative - no matter the source?”, will win the war for talent!

So, how do you create a workforce that will be resilient in the face of talent shortages, rapid change, and wide-ranging uncertainty? And what does the optimal workforce mix of permanent, contingent, freelance and gig workers look like?

There is no single answer to these questions as the optimal workforce mix will vary considerably based on each organisation’s unique requirements and position. However, as a starting position, a clear understanding of the current state and the key factors internally and externally that will influence the right workforce mix for your organisation is critical.

A helpful place to start is to ask yourself the following questions:

• What are you trying to achieve?
• What data do I have and what am I missing?
• What are you short vs. long term strategic objectives?
• What are the current challenges your organisation faces when accessing talent?
• What are the barriers (perceived or otherwise) that may influence your workforce mix?
• How do we inform and educate our hiring managers and buyers on the range of workforce channels available to them and how do we influence their decision-making?

Although there is no one answer in relation to the optimal workforce mix, we can be sure that it will only continue to evolve and that workforces will need to be boundless, global and with the ability to scale and flex at pace. Typically, an organisation’s workforce will be a mix of permanent employees and a range of the Extended Workforce categories. They will be quantified by skill count, not headcount.

Alongside this workforce mix, people will reskill and upskill to fit the chapters in their career and the needs of organisations that will benefit from their experience.