One of the top concerns of companies of all sizes is talent management. Procuring the right talent for a project can be time-consuming and costly, and once you find the right candidate, it may take months for that individual to come up to speed. All of this ends up costing companies huge amounts of money, making staffing a primary cost-cutting focus. These days, companies are learning that by staffing differently and using a blended workforce, they can reduce operating costs and overhead, increase agility and productivity, increase innovation, and acquire talent with very specialized skill sets. But what is the blended workforce and why is it becoming so popular with companies?
The Blended Workforce Defined
The blended workforce, sometimes called “agile talent” or “the gig economy,” is when a company staffs its workforce using a number of internal and external employees with different employment contracts, such as:
- Permanent, full-time internal employees
- Part-time workers
- Temporary workers
Freelancers and contractors have helped to create an define the blended workforce. Almost 40% of the workforce is now comprised of freelancers and other people who don’t work at a physical brick and mortar location. Millennials are a large part of this push toward less traditional employment opportunities because they want the flexibility and freedom that comes with freelancing and being able to work remotely.
Another factor in the rise in the number of remote workers in the United States is the Affordable Care Act (ACA). The ACA gives workers the ability to work for themselves and still have affordable health care, without having to rely upon their employer or spouse for medical insurance, and this allows for far more workforce flexibility.
Technology today is quickly reducing the need for employees to work in the same physical location at the same time. Technology costs are dropping for the average consumer, making all sorts of technology available to people and places that it once wasn’t. Not only do the majority of people have a smartphone, but many people own their own tablet and laptop as well. Couple inexpensive, physical technology with the wide availability of free WIFI, and for many people the need to tie themselves to an office in order to work no longer exists. Between email, direct messages, video chats, and apps that do almost everything, there is becoming less reliance upon physical structures with computers, desks, and phones.
If a company uses a blended workforce, that means that they typically keep 70% of their staff as permanent, full-time internal employees, and they make up the other 30% with a combination of different types of external employees. It’s important to keep about 70% of the workforce internal. Those internal workers provide the company with stability and with a base of operations. Having a blended workforce means that it’s important to standardize various procedures so that the internal employees and the remote employees can work together on a project without challenges and communication breakdowns.
Benefits of the Blended Workforce
If implemented and managed correctly, the benefits of the blended workforce far outweigh any challenges. The blended workforce offers companies numerous benefits, such as:
- Scalable Operations.
Using a blended workforce gives companies the ability to respond to changes in the economy or their business by scaling projects up or down to meet the needs. If a company has a large, short-term project, they can meet that need with a contingent workforce and when the project is over, reduce the workforce down to normal levels, without losing internal knowledge and employees. Using a blended workforce means that companies don’t require as large of a physical office location because part of the work is being done remotely. This helps to reduce costs and adapt to changes quickly.
- Being More Flexible.
Using a percentage of remote workers lowers costs. Freelancers typically provide their own technology (laptop, phone, tablet) and pay for their own benefits. That means companies don’t have to pay for office space and computer equipment, medical benefits, vacation time, or retirement benefits, and that equates to cost savings.
- The Ability to Hire Specific Talent for a Specific Task.
One of the biggest advantages to hiring external employees is that you can hire for a very specific skill set that you may need on a particular project. When companies rely on only an internal workforce to solve problems, sometimes employees who don’t have specific experience end up having to solve a problem, simply because they’re the best available for the job. By using freelancers, however, companies can hire someone who knows exactly how to perform the task and who can probably do it better and quicker than someone trying to figure it out as they go. This can also save the company money at the end of the development cycle, due to better design, less errors, and reduced support costs.
In essence, a blended workforce makes companies more agile and able to adapt to both internal and external changes, while simultaneously reducing costs. It allows them to spend less time acquiring and training talent and more time innovating and improving their core business. A blended workforce can also make for happier employees, which reduces costs. Happy employees tend to be more engaged in their work, more productive, and they take less sick time.
External employees bring something else besides specific skill sets: an outside point of view. Often, people who work at the same company for years can become complacent and less inquisitive. An outsider brings an outside point of view and perspective that may never occur to someone inside the “internal employee bubble.”
Challenges of the Blended Workforce
While the blended workforce is the wave of the future, like anything, it isn’t without its challenges. Some things to be aware of before implementing a blended workforce are:
- Managing people over different time zones.
In a typical office environment, workers usually have to adhere to “core hours,” meaning that they have to be on-site for eight hours during a specific time window. In a blended workforce, the internal employees adhere to one schedule, but you could have contractors and freelancers in a range of time zones, none of which match up with the main office workers’ schedules. Freelancers also tend to set their own hours and not adhere to the conventional 9-5 work day. It’s good to have one person as the point of contact for the external workforce.
- Dealing with various tax classifications.
With part of your staff working in different states or even different countries, that means lots of different tax requirements to keep track of. As long as you consult a tax professional and understand the requirements up-front, tax classifications shouldn’t cause you too many headaches.
- Higher hourly pay rates.
In general, freelancers and contractors charge a higher hourly rate than you would pay an equivalent internal employee, but that doesn’t mean that freelancers are more expensive overall. Freelancers don’t get benefits or paid vacation, so their only cost is their hourly rate.
- Harder to build rapport with the rest of the team.
When part of your staff is on-site and the others are scattered in various locations across different time zones, it can sometimes be difficult to get all these people together at the same time on a regular basis. This can make building team unity and rapport difficult if not managed properly. Having the right collaboration and communication tools allows employees to easily communicate with one another.
As long as you’re aware of the challenges and are prepared for them, there’s no reason that these challenges need to define the experience of the blended workforce. Almost any issue can be worked through, usually through good communication and planning.
When properly managed, the blended workforce gives companies the fundamental benefits of the traditional workforce in conjunction with the flexibility of a remote workforce. While maintaining the majority of the workforce as internal, companies can still provide their customers with the stability of regular hours and staff available to assist them with their issues.
By using a remote workforce to make up the difference, companies can lower operating costs, increase flexibility, and improve innovation by being open to outside ideas and points of view. The blended workforce is a win-win for companies and employees alike. Internal employees don’t feel like they’re being stretched as thin, and external employees enjoy the work-life balance they achieve by working when they want, where they want, but still making valuable contributions to a team.
Thanks to the digital age, the blended workforce is gaining popularity in the present and will become even more prevalent in the future as companies strive to cut costs while increasing ingenuity and innovation. In short, the blended workforce is here to stay.