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Will the rise of freelancers and not machines finally kill off the traditional organisation structure?

February 20, 2017

 

For 31 million people in the UK, the working day still means being an integral cog of a larger organisational machine. Maybe not always productive (if our stats are to be believed) and maybe not always energised by a deep burning sense of personal motivation and commitment (if our stats are to be believed) but a hierarchy, division of labour, sense of belonging, and employment has provided us with much needed structure in our lives for 150 years.

 

On a more appreciative note, that enduring formal hierarchical structure is capable of producing one important thing: Compliance with the law. No more, no less. Because formal structure is the domain in which compliance is produced, every organisation, large or small, old or young, has one.

 

But is the hierarchical organisational still relevant today and if it is beginning to change, then why ? Technology gets the obvious column inches but the rapid rise in the number of contingent workers (from gig to zero hours to the professional chattering classes) as seen in the image below and the possible economic benefit to margin-minded management is, I believe, the developing story to watch.

The obvious default position is to over-emphasise the technology angle. Of course it is safe to say that Technology is continuing to disrupt and transform industries (CapGemini's report on the Digital Advantage) but our relative capital expenditure is in fact reducing at a very time when we need to be innovating and adapting (Automation anxiety and the future of IT). ‘Short-term capitalism’ is a systemic structural problem in our economy where banking our profits and being beholden to the shareholder community takes precedent over an investment strategy for innovation & growth. This, you feel, must change, especially in any post-Brexit survival guide.

 

In the HR Technology space the increasing pace of change by visionary vendors in this freelance space has many exciting opportunities on its roadmap. From providing a safe and accessible, intermediary platform to access vetted, freelance talent, such as the the excellent weliketowork, to finally solving the perennial talent supply and demand problem that I wrote about in a previous blog on talent platforms.

 

In response to a business world that is no longer predictable, repeatable and rigid, the belief system that collaborative enterprises who tap into the knowledge networks of their respective organisations (and outside) will move quicker and smarter, providing it with a competitive edge. Redundancies in the UK show an upward trend over the last 12 months, with businesses being forced to change their organisations in response to market forces, there is a whiff of opportunism in the air when it comes to tapping into the rise of the freelance sector.

An emerging template of the new organisation has 'consistent flexibility' in mind and it might just be the answer to the productivity and cost challenges the boardroom have been looking for. Put simply, customer at the heart of the organisation, excellent data insight, a smaller core responsible for investing in aligned projects & oversight and a curated, specialist flexible, contingent freelance community accessible on an on-demand talent platform to deliver at the point of need and then disappear thus not burdening the business with unproductive down time and fixed employee costs. Tapping into the value-creation structure that smashes through hierarchy and targets mastery instead is a silver bullet for organisational success in the years ahead.

 

This change won’t be linear. Our contingent workforce is growing rapidly, however barriers to the new way of working progressing are plenty and need careful consideration :

  • As shown by recent judgements on Uber and Deliveroo, our employment landscape is out of date. A much needed modern employment review is underway and may provide some answers about the sort of economy and society we wish to pursue.

  • What’s more, our tax and company laws send all the wrong signals to freelancers. The forthcoming IR35 implementation looks to have potentially catastrophic penalties to the growing freelancer community.

  • The wider knock-on affects of having a small core in the organisation centre and a larger, transient, freelance construct throws up major new issues about the sociology at work – how we define belonging ? the issues of IP ownership ? co-employment ? how the sparks of true innovation really come about ?

This is a fascinating and evolving area of work and I’d suggest that every organisation starts with the following call to action:

  1. Understand the scale of your current freelance problem / opportunity using your data intelligently and partnering with a technology vendor.

  2. Build an effective total workforce strategy that embraces talent economics, impact of automation and places a premium on putting to the test what you want your organisation to represent. Get this wrong and in an era of employee citizenry you could be diluting your well-formed EVP.

  3. Scan the horizon for one of the most fascinating developing stories taking place in our evolving future of work and don't be reactive.

Until next time, if you are interested in hearing more, then please sign up and join me at the following event.

 

 

 

 

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