As companies struggle with chronic skills shortages and changing labour demographics, a new generation of talent platforms, offer on-demand access to highly trained workers. Almost all Fortune 500 firms use such platforms. But most do so in an ad hoc, inefficient way, according to a Harvard Business School/BCG study. Companies need to get much more strategic about their engagement with talent platforms and fully embrace their ability to increase labour force flexibility, speed time to market, and facilitate business model innovation. That will require rewiring policies and processes and redefining working norms. Most important, leaders must inspire the cultural shift needed to realize the platforms’ transformative potential.
In this era of chronic skills shortages, rapid automation, and digital transformation, companies are confronting a growing talent problem, one that has the potential to become a strategic bottleneck. How can they find people with the right skills to do the right work at just the right time? The half-life of skills is shrinking fast, and many jobs now come and go in a matter of years. Not only that, but major demographic changes are under way: Boomers are aging out of the workforce, and Millennials and Gen Z are taking over, bringing with them very different priorities about who should do what work—and where, when, and how it should get done.
To help companies address these challenges, a new generation of talent platforms has emerged. These platforms offer on-demand access to highly skilled workers, and our research shows that their number has risen substantially since 2009, from roughly 80 to more than 330. Much of that growth took place during the past five years alone. Today almost all Fortune 500 companies use one or more of them.
Platforms that provide workers who have four-year college degrees or advanced degrees represent an increasingly important but understudied element of the emerging gig economy. To better understand this phenomenon, we undertook a survey of nearly 700 U.S. businesses that use them. We then conducted in-depth interviews with many corporate leaders whose companies are relying on the platforms and with platform founders and executives.
That companies are leveraging high-skills platforms in large numbers came as no surprise to us, because in recent years we’ve seen how they can increase labour force flexibility, accelerate time to market, and enable innovation. We were impressed, however, by the variety of engagements that companies are making with the platforms. They’re seeking help with projects that are short- and long-term, tactical and strategic, specialized and general. What’s more, 90% of the leaders we surveyed—C-suite and frontline—believe these platforms will be core to their ability to compete in the future.
But here’s what did surprise us: Despite the extent to which companies are now turning to such platforms, very few firms have developed a cohesive organization-wide approach to their use. Instead, operational frontline leaders who are desperate to get things done have been reaching out to them on an ad hoc basis, often without any central guidance. This approach is costly, inefficient, and opaque.
To compete in the years ahead, companies must do better. They’ll have to acknowledge and embrace the full potential of digital talent platforms—which is to say, figure out how to engage strategically with what you might call the on-demand workforce.
Though millions of workers were laid off this past spring, in the coming months employers will begin to rehire—and when they do, they’ll need to be more purposeful about their approach to talent. How can they access hard-to-find expertise? Which positions or roles have changed, and what new capabilities are required? What work can be done more successfully and efficiently by skilled freelancers? In an environment of ongoing uncertainty, employers will be even more attracted to the freelance route for a variety of reasons: It makes hiring easier for hard-to-fill jobs, offers access to a wider set of skills, reduces head count, and allows more flexibility during times of change.
In this article we’ll take stock of where most companies now stand on this front. We’ll show how some pioneers are speeding ahead to take advantage of what the new talent platforms have to offer, and we’ll explain how you and your management team can do the same.
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