Parting the Human Cloud: The Rise of Contingent Knowledge Talent
Large enterprises have been leveraging a growing contingent workforce for many years. Bringing skills into companies on an as-needed basis has increased versatility and reduced costs of personnel management for most of the Fortune 500. Indeed, these benefits have given rise to multiple species of staffing and software support, including Managed Service Providers (MSP) and Vendor Management Systems (VMS) to organize and systematize how companies engage with this flexible workforce.
Whether part-time clerical and administrative support, seasonal accounting help or episodic IT workers, companies have unlocked significant value in a number of contingent skills categories. All of this has accelerated as technology has made it easier to work remotely, find workers and innovate expeditiously. Despite the progress enterprises and their MSP and VMS partners have made in building and managing an ecosystem for engaging on-demand skills-based employees, there is increasing evidence that this same ecosystem needs to evolve (and soon) to unlock the benefits of contingent knowledge workers.
Skills vs. Knowledge
Contingent does not just mean skills-based labor anymore. More and more white-collar professionals, from management consultants to lawyers, are joining the on-demand workforce. The reasons vary widely, but the changes in technology and labor demographics that enable the on-demand economy have not left subject matter experts and knowledge talent behind. In fact, there is evidence that this population is the fastest growing component of the gig economy.
Some companies have positioned themselves well for this wave of elite, contingent talent. Companies like PwC and The Washington Post use external resources as a way to plug expertise gaps at the enterprise that, when filled, return significant value and impact back to the business.
HR, Procurement and Legal Are Not Aligned
The difficult reality, though, is that while more and more companies are starting to think and talk about how to leverage the benefits of this external knowledge pool, there are often some structural impediments holding back progress.
Responsibility for building and managing a contingent knowledge worker program typically falls squarely in a chasm between a company’s procurement and HR teams. At many companies, managing traditional knowledge solutions (e.g., consulting firms) is firmly in procurement’s camp. Firms make their way onto preferred supplier lists, negotiate rate cards, and put master services agreements in place. HR and legal work together to manage the relationships built through traditional staffing solutions, including contingent talent sources, staffing firms and other agencies.
However, the rise of a knowledge workforce, most often working on a project basis (not hourly), pressures this construct. These resources are not affiliated with a large traditional consulting firm (although many trained at those firms), so they fall outside of the procurement mandate. Similarly, HR is usually overseeing full-time hires and the suppliers of contingent, skills-based talent. Subject matter experts and other types of business consultants are beyond the HR portfolio at most companies. So, if neither procurement nor HR is curating a contingent knowledge program, who is?
Too frequently, the answer is no one. Finding, engaging and managing this type of talent is left to functional stakeholders scattered across the business. On a one-off basis, this probably does little damage, but over the long run, the company is missing out on the value of thoughtfully scaling a knowledge talent program and encouraging channels of untracked spend and subsequent outcomes across the business.
At companies that are doing this effectively, for example, Thomson Reuters, procurement and HR work together to bring legal along so that contracts, insurance requirements and other protocols are calibrated to match the realities of an independent, white-collar workforce. The benefits to these companies are real and measurable. Stakeholders across the business are delighted with flexible access to smart, project-based resources that were previously opaque and inaccessible. Spend is moved into a trackable and managed program, which is a welcome change to all three parties.
Customers Are Pushing for Total Talent Management
MSPs and VMSs exist to help organizations build and manage the staffing service providers that make up their talent supply chain. Instead of directly managing the cost, quality and administrative components of these myriad relationships, a company contracts with an MSP to take on these responsibilities. The scope of most MSP programs has been designed with the original concept of a contingent worker program in mind — episodic, hourly and skills-based. The supplier lists that MSPs develop, the account teams that they build and the contractual frameworks they deploy all fit the traditional contingent worker program. The core functionality of a VMS centers on managing hourly workers, but that’s just not enough anymore.
And customers are starting to demand more. MSPs and VMSs are getting pulled into more conversations at their customers about total talent management (including knowledge talent), implementing a statement-of-work program or technology, and developing a human cloud strategy. Too often, MSPs and VMSs are reacting to — not driving — these customer conversations. It’s no easy feat for companies that have been pretty good at one thing to evolve beyond it. For MSPs and VMSs that start to incorporate this growing supply of on-demand, high-impact, knowledge talent and the technology platforms that enable them into their programs, the opportunity to delight their customers and grow their own business is clear.
The Innovation Push
What should customers of these MSP and VMS solutions do? Press them to innovate their focus beyond the hourly, skills-based worker. Encourage them to experiment with suppliers and technologies that may not neatly conform to the traditional contingent program. Work with them to develop a strategy that unlocks this new reservoir of talent, instead of simply relying on the old way of doing things.
Forward-thinking enterprises appreciate that the on-demand economy is not a monolith. The pools of talent available on a contingent basis are different today than they were just a few years ago. It’s much more common today for subject matter and business experts to operate independently or in small teams. Companies that reconceive their contingent programs are likely to ride the wave of the on-demand workforce to higher productivity and profits, while the companies that are stuck in the ways of the past will simply be left behind.
Interested in unlocking the benefits of this new reality? Reconceive your contingent program and win with an agile workforce.