Freelancing and the so-called gig economy has been on the rise now for a long time. Freelancers' Union, a United States organisation, says that a quarter of the American workforce are now project-based workers, while Accenture estimates up to 30 per cent of the total workforce falls outside the traditional full-time permanent relationship.
There at least five good reasons why organisations use agile talent: leveraging the increased availability of people, reducing costs, avoiding adding permanent headcount, increasing the speed of getting things done, and challenging the organisations’ thinking and assumptions with outside ideas.
As this book by two senior figures from the management consulting firm RBL notes, as competition accelerates and innovators disrupt, the need for expertise on tap continues to expand. Far from being cheap and disposable, much of this human capital is comprised of highly trained and valuable expertise.
The term “cloud resourcing” is used in this context with its obvious similarities to the way information technology resources can be accessed on an “on demand” basis.
There are clear advantages but there are also challenges. In a recent survey, 50 per cent of IT department heads reported frustrations with service partners, claiming promises of high touch and attention were inconsistent with the reality once contracts were signed. Goals can be unrealistic, flexibility not as great as expected and costs can mount unexpectedly as new services are added. Some 25 per cent of outsourcing relationships die within two years; only 50 per cent survive five years.
One reason suggested here for this attrition is too often purchasing departments make the selection decision while operating managers – excluded from that decision process – are nonetheless expected to make the relationship work. Purchasing wants the lowest price and a fixed cost, whereas operations want the best resource, a good cultural fit and enough flexibility in the contract to allow for changes in scope or strategy.
Insiders can feel threatened by external talent and consultants don’t always understand the nuances and politics of organisations. External talent has issues too, often bemoaning the slow, complex and bureaucratic way organisations work.
Viewing external talent as “separate and not equal” is not a strategy that will work anymore and, according to the authors, this is the key to successfully managing these relationships. In their research, they have found the organisations that get the most from their agile talent are those that used the most effective techniques in engaging, motivating and building teams.
Too often these external individuals, however, feel merely tolerated or viewed with suspicion by employees while at the same time feeling unappreciated by management and powerless in dealing with the administrative bureaucracy of the organisation.
Alignment criteria
Four key success factors are identified. The first is strategic alignment. Is the organisation disciplined enough to identify where agile talent and cloud resourcing are beneficial, and does the work have the right level of sponsorship, budget and time? The second is performance alignment. Are performance expectations defined, established and communicated?
Then there’s relationship alignment which relates to cultural fit being as important as technical expertise. The final factor is administrative alignment, which considers whether the organisation is set up to work well with externals or whether it treats them badly. The book contains tools to test your organisation’s alignment across these criteria and recommendations about how to address each area.
The authors also suggest we are entering an era in which organisations will recruit external partners in a similar fashion to their internal management hires and that the HR function will play a major role in attracting, engaging and building relationships with high-performing agile talent. Organisations will also invest more in external talent orientation to close the cultural gaps, especially in situations where an individual’s talents are exemplary and rare.
This well-researched book will prove interesting not only to chief executives and HR leaders, but to the many people now operating in the gig economy who will hope that some of its key messages resonate with those who employ them.
