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Capture the Free Agents

This is part of a special advertising section on the Outlook for 2012.

Sunday, October 2, 2011
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The top business challenge of 2012 is deceptively simple: Find and manage the talent necessary to achieve company objectives. HR departments have been tasked with this since their inception, and have responded with increasingly sophisticated approaches for sourcing, hiring and developing full-time employees. Along the way, HR leaders have earned their seat at the table as strategic partners to CEOs anxious to secure the talent they need to drive their companies forward.

But in 2012, even the best HR organizations must continue to evolve. The solutions of a decade ago are not sufficient for the challenges of tomorrow. Technology and globalization have shortened the life cycle of jobs, corporations and entire industries. Turbulent global markets have shortened visibility and stymied strategic planners.

Given this uncertainty, more companies are looking for the flexibility to quickly ramp up -- and easily scale down -- their talent base. Though staffing for short- and long-term business goals is critical, supply and demand of talent is no longer predictable. Workforce planning has become more crucial -- and more chaotic -- than ever before.

Amidst this chaos, 30 percent of the world's talent has gone missing from most HR workforce plans.

The omission isn't intentional. Traditional HR organizations simply weren't designed to keep pace with the fast-growing free-agent workforce: people seeking work on their own terms and pursuing nontraditional work styles, such as independent contractors, temporary workers, entrepreneurs, consultants and the self-employed.

Instead, HR's visibility usually begins and ends with the full-time workforce. It's not unusual to talk to CEOs or HR directors who are stunned to learn they have two to three times more people working on their behalf than they have listed in their HR files -- often in highly specialized roles such as Force.com developers or environmental engineers.

Faced with a dizzying array of labor categories and an alphabet soup of talent-management options (RPO, BPO, CWO, MSP, SOW, etc.), companies often turn to procurement organizations to apply a method to the madness.

The implications for HR? Your 2012 challenge is to find and manage the right talent with the right skills at the right time . . . but decisions affecting about one-third of the workforce are being made without your input. It's a conversation that should not be left solely to procurement. HR has a vital role to play as talent strategists and consultants on workforce solutions that not only deliver cost savings, but ensure your company has a vibrant talent supply chain that can access top talent across both traditional and free-agent work styles.

Make no mistake, this trend toward free agency isn't a fad or a short-term response to the recession. Sixty-two percent of global executives say they expect to see a growing proportion of free agents in their workforces over the next 10 years. That's five times as many as those who expect to see a growing proportion of traditional full-time staff.

Forty-four percent of U.S. workers currently fit the free-agent category, with only 11 percent due to economic necessity. Even after employment conditions stabilize, it's expected that roughly one-third of the U.S. workforce -- and 20 percent to 30 percent of the global workforce -- will be free agents, working outside the walls of traditional HR systems.

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Contrary to conventional wisdom, these free agents tend to be highly skilled and well educated. More than one-third have master's degrees or higher. Compared to traditional employees, more free agents have technical or professional skill sets -- reflected in the fact that the fastest global growth in free agency is now in knowledge-worker roles, where skill shortages are most acute. The average American free agent is 50 years old and satisfied with his or her work/life balance, annual earnings and opportunities to acquire new skills. Seventy-five percent of them choose the free-agent work style because they value the freedom and flexibility it provides.

These free agents will play a critical role in the talent supply chain of the future. As flexible workforce models increase, HR organizations must arm themselves with new approaches to claim their company's share of the world's best talent -- across every category and work style. HR leaders must proactively join the conversation and apply the new laws of supply and demand to their future talent base, helping to make more intentional decisions about the best overall mix of talent (traditional versus free-agent) needed to meet strategic business goals. As that workforce continues to evolve, HR leaders will also need to weigh in on the advantages and risks of their labor mix: when to use contractors and for which skill sets . . . when to retrain current employees . . . how to gauge whether their talent supply chain is delivering the quality their business needs demand.

By taking an active role in designing more holistic talent strategies, HR can regain that lost 30 percent of its workforce -- and be that much closer to finding and managing the talent to achieve company objectives in 2012 and beyond.

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