The importance of an extended workforce

Hybrid, flexible, remote… there are many new terms being used these days to describe what many of us refer to as the extended workforce. But exactly is an ‘extended workforce’? How is it different to what has come before, and why should you care?

The year an extended workforce became the norm

A newly published report by Microsoft Corporation on the impact of the 2020 pandemic on workforce design and behaviors suggests argues that a hybrid workforce model is here to stay, and that many firms are already revisiting their go-forward physical office requirements in light of these changes.  They conclude,

“One of the brightest sides of the shift to remote work is that it widens the talent marketplace. Remote job postings on LinkedIn increased more than five times during the pandemic, and people are taking notice. Forty-six percent of remote workers we surveyed are planning to move to a new location this year because they can now work remotely. People no longer have to leave their desk, house or community to expand their career, and it will have profound impacts on the talent landscape.”

COVID-19 shook up the business world.  It encouraged business leaders to do something most had previously resisted; namely, to have their people work from home instead of insisting they commute into company offices every day.  The skeletons in the closet they feared most, such as a downswing in productivity, shortcomings in technology, the potential loss of data, and negative impacts on workforce moral and engagement – well, for the majority, they didn’t really turn out to be that significant.

Finding talent under lock-down

With their workforce successfully operating remotely, businesses turned to the issue of filling urgent vacancies and conversations quickly turned to the demographic of the audience.

Whether it was because of the practicalities of recruiting while under lockdown, the result of trial and error, or simply down to plain common sense, most managers realized it was nonsense to demand that only potential candidates within a commutable distance be longlisted for an opportunity.

This downplaying of the importance of selecting talent that is ‘local’ has completely re-engineered the employment market.

Cashing in on the local premium

All western world employers pay a premium to source talent within commuter distance of their offices.  This is inevitable as labor markets around the world are impacted by the state of health of economies, the paucity of talent, the quality of education systems, and the cost of living that exists within the country.

Employers in the US take for granted that a worker employed locally will cost more than a contractor operating from their home office overseas.  With employers today already operating virtually with their existing workforce, it’s difficult to argue the case they should pay more for local talent ‘just in case’ the policy of flexible work changes and people are required to return to the office.

While the current level of remote working continues, the proportion of the workforce that works remotely is progressively growing.  For organizations cashing in on more affordable remote working talent, returning to the office on mass will, in the not too distant future, become impractical, even if it were judged to be desirable.

Learning to live with the new normal

The Microsoft report suggests that many companies, including their own, have already drifted beyond the tipping point where their company culture and working behaviors can return to how they were before the pandemic.   An interesting statistic that comes out of Microsoft’s survey is that 66 percent of business decision-makers are already considering redesigning physical spaces to better accommodate hybrid work environments. 

The world of business, and indeed the workforce, has been forcibly extended.  Like a coiled spring that has been stretched and lost its ability to return to its previous form, the workforces of many businesses have grown into this new reality.  Gaps in the workforce have been filled by new starters that will now be difficult to replace locally.  Hiring economies now realized from hiring remote workers over the past 18-months are going to be hard to ignore.

Talent leaders and hiring managers will have to come to terms with how they will fashion their physical and virtual office workplaces to support the people, processes, and data governance of business.  Inevitably, there has been a cost to this shift to virtual working, but it exists more in the softer side of business operations – chiefly in areas of ideation, collaboration, emotional support, workforce training, and tacit knowledge retention – and even in these areas, businesses will have to work out how to achieve similar outcomes in new ways.

Daniel Rothberg, President of Workspend, gives his perspective on the Extended Workforce

ABOUT THE AUTHOR

FURTHER READING