The rise of social enterprise

2018 Deloitte Global Human Capital Trends

The workforce ecosystem

Managing beyond the enterprise

Today’s workforce has become a dynamic ecosystem. Only 42 percent of this year’s survey respondents tell us that their organizations are primarily made up of salaried employees, and employers expect to dramatically increase their dependence on contract, freelance, and gig workers over the next few years. As alternative work arrangements become more common in the broader economy, HR and business leaders are rapidly trying to plan and optimize their own workforce ecosystems, pressured by the need to improve service, move faster, and find new skills.

THE composition of the workforce is changing dramatically. Globally, there are approximately 77 million formally identified freelancers in Europe, India, and the United States. In the United States, more than 40 percent of workers are now employed in “alternative work arrangements,” such as contingent, part-time, or gig work.2 This percentage is steadily rising—increasing by 36 percent in just the past five years—and now includes workers of all ages and skill levels.3 In this year’s Global Human Capital Trends survey, 50 percent of the respondents reported a significant number of contractors in their workforces; 23 percent reported a significant number of freelancers, and 13 percent reported a significant number of gig workers.

All of this suggests that, in simplest terms, the traditional employer-employee relationship is being replaced by the emergence of a diverse workforce ecosystem—a varied portfolio of workers, talent networks, gig workers, and service providers that offers employers flexibility, capabilities, and the potential for exploring different economic models in sourcing talent.

While it may be appealing to hire contractors quickly or to outsource technical or service work, taking advantage of the emerging workforce ecosystem’s benefits brings a variety of new challenges, and our research shows that most companies are not fully ready. When asked to forecast the makeup of their workforce in 2020, 37 percent of this year’s survey respondents expected growth in the use of contractors, 33 percent in the use of freelancers, and 28 percent in the use of gig workers. But despite this anticipated growth, only 16 percent told us they have an established set of policies and practices to manage a variety of worker types, pointing to an enormous gap in capabilities. The challenge is not just the tactical one of finding enough of the right people to execute particular tasks at particular times. To drive real value through the new workforce ecosystem, organizations need to understand how to appeal to and engage with workers of all kinds. And not all workers in this ecosystem have traditional views of what an employer worker relationship should look like. Consider the common aspirations of millennials and Generation Z: A recent study found that 75 percent of workers in these generations plan to start their own business; more than 70 percent want their work to support their personal interests, and only 12 percent believe that an invention they create should belong to their employer.