The workforce ecosystem: Re-imagining employers’ relationship with workers

A new study from MIT Sloan Management Review and Deloitte explores a new way of approaching how companies interact with workers.

The way workers think about employment is changing, and employers are starting to catch up to that reality.

With the proliferation of different forms of employment—include remote work, freelancing, contractors, and crowdsourced contributors—employers are increasingly starting to think in terms much broader than “employees.” A new study from MIT Sloan Management Review, in collaboration with Deloitte, explores what they term “workforce ecosystems,” a new way of approaching how companies interact with workers.

The report was drawn from a global executive survey that included 5,118 professionals, 27 executive interviews, and a review of human capital and ecosystem management literature. It found that employers are thinking about workforces in terms such as “concentric rings,” “continuums” or “communities.”

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“Our research makes clear that most managers today consider employees and other workers who create value for the enterprise — including contractors, service providers, gig workers, and even software bots — to be part of their workforce,” the researchers write. “Our recent global executive survey affirms that the vast majority — about 87% — of respondents include some external workers when considering their workforce composition.”

A new world of work

The way workers think about employment is changing, the study says, and employers are starting to catch up to that reality. The report quotes a number of representatives of large companies who use a variety of metaphors and descriptions to illustrate these changes.

“Even an organization as steeped in tradition as NASA is finding conventional workforce conceptions insufficient,” the study said. “Nicholas Skytland, deputy chief of NASA’s Exploration Technology Office, sees its future workforce as encompassing both ‘somebody who loves their job so much they will stay for a 30-year career and the project-based gig worker who works at NASA for a season, possibly while also working at multiple other jobs at the same time.’”

Since so many employers agree that a workforce consists of more than just full-time and part-time employees, the authors of the report suggest the workforce ecosystem as a more appropriate concept.

“This ecosystem approach is a significant departure from the traditional view of the workforce, which envisions individual employees performing work along linear career paths to create value for their organization,” the report said. “Where the traditional workforce perspective establishes a human resources structure for managing employees, replete with systems, processes, and oversight, this new approach treats the workforce ecosystem itself as a structure. Managing employees and managing a workforce ecosystem structure are fundamentally different processes.”

Evolving management practices

The article lists a number of ways companies may have to change practices as their workforce changes. Areas such as talent acquisition, performance management, and compensation may have to be re-thought. Some companies are re-imagining and renaming their HR departments—one company now refers to that area as People and Culture. The emphasis is not just on superficial names; some employers have found that traditional HR functions are a poor fit for the new reality and result in a fragmented approach. The authors of the study note that there is no single right approach for all companies.

The report also acknowledges the risks of this new approach: “How do you maintain quality in a world in which you’re just, in effect, buying slices of somebody’s time?” asked one executive. Questions over regulatory compliance, intellectual property, pay equity, and more make the workforce ecosystem idea a complicated prospect.

But new approaches to interacting with workers seem inevitable, as technology, external factors, and worker expectations continue to evolve. The report said that despite the challenges, the re-imagining of workforce management has strategic value.

“Executives face key choices about how to manage their workforces,” the report concludes. “They can either continue to manage employees, external workers, complementors, and others through different, often parallel, systems, or they can develop a new, more holistic workforce approach that spans organizational boundaries and different types of workers and contributors.”

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