Who’s Calling the Shots?
Contingent workers, alternative workers, not employees or top management
The word “temp” used to conjure images of a fresh-faced college graduate seeking a start, a bow-tied accountant who came in to help during tax season or seasonal help at a retail store.
Yet, in 2015, the US Government Accountability Office said that as much as 40% of the US workforce can be characterized as “contingent,” defined as workers paid on a project basis, those who work as contractors or those who otherwise are not employed full time. The sheer number of these “flexible” workers demonstrates the trend by corporations toward using on-demand staffing. Companies are capitalizing on work that can be done anywhere, anytime, at the lowest price.
What’s in it for these contingent workers? Do they prefer to be temps?
“They’re choosing not to have a regular, standard job because they want the flexibility for work or family reasons, or because they want to be more in control over the kind of work that they're doing and the kind of projects that they're working on,” says Prof. Gretchen Spreitzer, of the University of Michigan’s Ross School of Business.
Why are companies working this way? The new goal for companies is to be agile and resilience, which are critical attributes when making quick course corrections instead of rigid long-range plans. Employers are “deconstructing” internal positions, functions and external services in pursuit of efficiency, flexibility and automation. This requires defining the core capabilities needed to achieve a desired outcome and then assigning the team and talent needed. The next step is modeling expected outputs.
The focus is on outcomes—not individual people or locations.
One sure winner is the staffing or placement business. A 2013 study from the University of Pennsylvania’s Wharton School found that US staffing agencies have grown into a $300 billion industry—roughly the size of the market capitalization of Oracle Corp.
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Another consequence is that this fluidity of talent has meant a reduced tolerance of middling performance.
Martin Burns has led recruiting at fast-growing tech companies including Mobiquity Inc. and online talent search for PricewaterhouseCoopers. He explains that competition for talent has led to the pursuit of top performers or those not actively seeking new prospects.
In addition, role- or task-based compartmentalization in services or creative work is easier than ever, unlikein manufacturing.
“These are complex problems because of the opportunity to make technology work into lots of small projects through remote work and automation,” Burns says. “There is a hidden economy. It's global. People may care less about where the work is done than in getting tasks done.”
Burns notes subtle ethics issues are involved in hiring contingent workers. He points to 99designs.com for design work or Amazon Mechanical Turk—on-call, low-cost options for tasks or projects. Hiring unseen workers anywhere in the world risks what he calls “digital colonialism.”
If a US company hires an offshore contractor, or a restaurant hires a visiting worker, is that a savings for the company or unfair exploitation of a wage differential that hurts local talent? The ethical and reputational effects of staffing decisions, even at blue-chip companies, can result in collateral damage to even the most well-considered staffing and work plans.
Jeff Antonelli is a BRG director based in Chicago, specializing in talent development and organizational design. He has worked with Deloitte and with corporations including Northrop Grumman Corp. and Caterpillar Inc.