The Fragmenting Workforce – flexible friend or foe?
Belinda Johnson - Worklab
Starting Place – Charles Handy’s Shamrock
2
Professional
Core
Professionals
Core
Self-employed
Professionals
Contingent
Wo...
Some other interpretations of the
Shamrock..
3
Fragmenting Workforce - The Extended
Enterprise
4
collaborations
outsourced front-line &
support services
consultants
micr...
The Fragmenting Workforce
42% of the UK workforce already works outside
the concept of full-time, „permanent‟ employment
S...
32%
43%
24%
58%
46%
49%
-25%
-21%
-40%
-10% -10% -10%
-60%
-40%
-20%
0%
20%
40%
60%
80%
Full-Time Agency Temps Freelancers...
Part-time working
7
 Currently running at 27% of UK workforce – plateauing after
recent rises.
 Most significant movemen...
Apprenticeship starts and framework
achievements by level
8 Source: Skills Funding Council - Further Education & Skills: L...
Interest in working on a contingent basis is
rising
9
 1.6 million „temps‟ in the UK – 6.5% of working population
 4.2m ...
Interest in working on a contingent basis is
rising
10
0% 20% 40% 60% 80% 100%
PAYE: front-line operations
PAYE: operation...
Interest in working on a contingent basis is
rising
11
“The world of work has changed…The
intelligent individual is in con...
Recruitment industry’s known share of
activity
Agenc
y 300k
Direct into
Hirer
(or Other)
1,250k
All Temporary
1,550k
Tempo...
The recruitment industry’s unknown market
share
Some uncertainty around where certain worker types, in sizeable
numbers, a...
The recruitment industry’s potential market
share
Immediately identifiable supply through
recruitment agencies/businesses ...
RIB Turnover Growth & UK Job Vacancy
Growth
Source: RIB (www.rib-index.com), ONS
Who else is involved in sourcing &
managing the fragmented workforce ?
 Recruitment Intermediaries (MSPs/RPOs)
 Talent p...
Where from and where to for managed
programmes?
Managed Services
(MSPs/RPOs)
Regional Global
Varied Skill categories
All c...
Current and next steps focus
Source: Staffing Industry Analysts European Contingent Buyers Survey 2013
Which of the follow...
Another pressing need - the application
process is broken..
19
40% had an existing
relationship with the
company prior to
...
Talent pooling begins to treats candidates in
a similar fashion to customers
 Time is being invested in drawing candidate...
The Service Provider community
21
 Companies who provide payroll, accountancy and administrative
support and advice for t...
Intermediaries promoting alternative
resourcing models
 Barclays – PAYE temps sourced by agencies but directly
engaged si...
On-line working
23
“We‟ve passed into a new economic
era, presenting businesses and individuals
with mounting challenges. ...
The potential for on-line working in the UK
has many drivers
24
 Underemployment:
 “People in work wanting more work inc...
Interest in crowd labour / on-line work is rising
25
 Crowd workers
 Nearly 60% of all crowd workers live in North Ameri...
UK – a top 10 country for both hiring
and working
26
oDesk started in technology but is
rapidly branching out
27
The top 10 on-line jobs UK
businesses hire for
28
 Q2 2013 Top Categories (by dollars spent):
 1. Web programming
 2. W...
What skills are driving growth of
online hiring by UK clients?
29
 Fastest-Growing Categories (based on 2-yr CAGR of gros...
Top skills of UK freelancers
30
 Q2 2013 Top Categories:
(by dollars earned)
 1. Web programming
 2. Website content
 ...
Rising volumes of flexible hours
engagement models
31
Means of
Engagement
specified
2011 2012 Increase
2011/2012
H1 2013 (...
Back to the Starting Place – Charles
Handy’s Shamrock
32
 Implications for the organisation.
 Implications for the indiv...
The implications of further workforce
fragmentation for the recruitment industry
33
 The use of intermediaries will rise:...
The implications of further workforce
fragmentation for the recruitment industry
34
 Legacy processes will need to be mod...
The implications of further workforce
fragmentation for the recruitment industry
35
The opportunities – beyond transaction...
Contacts
36
Belinda Johnson
owner - worklab
e: belinda.johnson@work-lab.co.uk
T: @worklabinsights
m: 07771 534365
www.work...
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Belinda Johnson - Worklab - September 26th

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Belinda Johnson - Worklab - September 26th

  1. 1. The Fragmenting Workforce – flexible friend or foe? Belinda Johnson - Worklab
  2. 2. Starting Place – Charles Handy’s Shamrock 2 Professional Core Professionals Core Self-employed Professionals Contingent Workforce
  3. 3. Some other interpretations of the Shamrock.. 3
  4. 4. Fragmenting Workforce - The Extended Enterprise 4 collaborations outsourced front-line & support services consultants micro-entrepreneurs & on-line /crowd workers apprentices / trainees temps / contractors/’sub- contractors (CIS), Interims, etc. full-time, part- time & fixed-term employees Degree of user organisation patronage Degree of state patronage outcomes- based tasks Roles
  5. 5. The Fragmenting Workforce 42% of the UK workforce already works outside the concept of full-time, „permanent‟ employment Source: ONS – Labour Market Statistics - Sept 2013
  6. 6. 32% 43% 24% 58% 46% 49% -25% -21% -40% -10% -10% -10% -60% -40% -20% 0% 20% 40% 60% 80% Full-Time Agency Temps Freelancers SOW Outsourced Offshored Source: Staffing Industry Analysts European Contingent Buyers Survey 2013 Proportion of companies using more or less European hiring intentions next 2 years?
  7. 7. Part-time working 7  Currently running at 27% of UK workforce – plateauing after recent rises.  Most significant movement is the increase in the number who are working part-time because they cannot find full-time work:  10% in 2008 – now 18.4%. Source: ONS – Labour Market statistics Sept 2013
  8. 8. Apprenticeship starts and framework achievements by level 8 Source: Skills Funding Council - Further Education & Skills: Learner Participation, Outcomes and Level of Highest Qualification Held(June 2013 – updated Sept 2013)
  9. 9. Interest in working on a contingent basis is rising 9  1.6 million „temps‟ in the UK – 6.5% of working population  4.2m self-employed, of which c.1.7m are „self-employed‟ freelancers  The rise of „I-pros‟ (study commissioned by PCG)  The rise in (European) I-pro numbers between 2000 and 2011 was +82%  Between 2008 and 2011 there was growth of 12.5% which was driven by four countries; Germany, France, Poland and the UK  In same time period, UK achieved double the European growth level – UK I-pros = 19% European total
  10. 10. Interest in working on a contingent basis is rising 10 0% 20% 40% 60% 80% 100% PAYE: front-line operations PAYE: operational support Day rate: Under £500 per day Day rate: over £500 per day Average of all the categories I choose to work on a temp/contract/interim basis Additionally: • 46% of employed workers considered a freelance role when last looking for work • 48% will consider it when looking next time Source: Randstad World of Work Report 2011/12
  11. 11. Interest in working on a contingent basis is rising 11 “The world of work has changed…The intelligent individual is in control of his or her own market, while the rest still require patronage.” Andreas Ghosh Personnel and Development Director for London Borough of Lewisham (and Policy Lead for Workforce Strategy at the Public Sector People Managers‟ Association) Source: Randstad‟s Navigator Report 2012
  12. 12. Recruitment industry’s known share of activity Agenc y 300k Direct into Hirer (or Other) 1,250k All Temporary 1,550k Temporary (ONS: Q1 2013) Self Employed (ONS: Q3 2012) All I-pros 1,734k? Sole Ltd 168k Agency 47k Run Bus/ Prof Practice 234k Partner Bus/Prof Practice 398k Sub contractor 408k Freelance 479k
  13. 13. The recruitment industry’s unknown market share Some uncertainty around where certain worker types, in sizeable numbers, are classified within ONS data.  Construction Industry Scheme (CIS)  797k Self-employed – March 2013.  Number of CIS workers – ONS uncertain: “Depends on how they classify themselves and/or how they are classified by those that engage them.”  Umbrella workers  ONS is currently looking into this area to determine:  How large the pool of employed temporary workers is.  Where they are currently being classified.  Whether any potential misclassification is cause for concern (based on the size of the pool).
  14. 14. The recruitment industry’s potential market share Immediately identifiable supply through recruitment agencies/businesses equates to less than 2% of the UK workforce… but we know it is considerably more. And what could it be?
  15. 15. RIB Turnover Growth & UK Job Vacancy Growth Source: RIB (www.rib-index.com), ONS
  16. 16. Who else is involved in sourcing & managing the fragmented workforce ?  Recruitment Intermediaries (MSPs/RPOs)  Talent pooling  The „Service Provider‟ community.  Employed temporary workers  Intermediaries driving alternative resourcing models.  Agency sourced but directly engaged temps  Online work platforms  Crowd working  Around a quarter of employers  Flexible hours working
  17. 17. Where from and where to for managed programmes? Managed Services (MSPs/RPOs) Regional Global Varied Skill categories All categories Fundamental technology Advanced VMS Selected industries All industries Outsourced Workforce Solutions IC & SOW – deliverables management Inclusion within RPO / RPO Alternative contingent labour resourcing models Complete enterprise-wide workforce visibility Major Milestones Creation of first contingent labour programme 1990s Technology Expansion 2004 Globalisation Vendor Neutral 2008 Today Extended Scope Flexible sourcing models Source: SIA presentation – Ciett Global Workforce Conference 2012
  18. 18. Current and next steps focus Source: Staffing Industry Analysts European Contingent Buyers Survey 2013 Which of the following are in place in your organisation?
  19. 19. Another pressing need - the application process is broken.. 19 40% had an existing relationship with the company prior to applying, either as a customer, advocate or with family/friends already at the company 20% admit to being an actual customers of the organisation they applied to 74% say they would share a positive with their inner circle - 61% would share a negative one 27% say they would share a positive CE on social channels – 16% would share a negative one Source: UK CandEs 2012 – www.thecandes.org. one third of those surveyed admitted to receiving no response at all to an application
  20. 20. Talent pooling begins to treats candidates in a similar fashion to customers  Time is being invested in drawing candidates into talent pools & puddles, and in nurturing them for potential future opportunities.  Growth of talent pools being fuelled by internal referral mechanisms.  Theory: as a candidate, once within the talent pools of your target organisations, you should never have to apply (or be put forward) for a job again.
  21. 21. The Service Provider community 21  Companies who provide payroll, accountancy and administrative support and advice for the professional freelance workforce.  A number of have also embraced the potential of providing employed temporary workers – know as Umbrella workers:  Concept accelerated with the implementation of the Agency Worker Regulations (AWR) in 2011.  Estimated number of „umbrella‟ workers – c.150,000 -200,000.  An industry/opportunity to watch – precedent set in the US for it to morph into a professional service of high esteem:  US has an established and highly regarded Payrolling and Independent Contractor Evaluation / Compliance industry.  UK has a dedicated trade association determined to set a benchmark to enable the industry to evolve in a similar fashion.  A service that, increasingly, both workers and hirers appear to need.
  22. 22. Intermediaries promoting alternative resourcing models  Barclays – PAYE temps sourced by agencies but directly engaged since 2009.  PWC‟s STAFFflow scheme:  Running for around 18 months  Used by around 30 NHS Trusts  Removes the requirement to pay the 20% VAT that would have been payable on the salaries of temporary agency staff by allowing trusts to employ them directly.  STAFFlow margin achieved out of saving (Source: Recruiter Magazine)
  23. 23. On-line working 23 “We‟ve passed into a new economic era, presenting businesses and individuals with mounting challenges. Work marketplaces based on social platforms – „placeforms’ – fill a new societal need.”  Stowe Boyd
  24. 24. The potential for on-line working in the UK has many drivers 24  Underemployment:  “People in work wanting more work increased by 1million since 2008” - ONS  Over 3 million people - 1 in 10 workers - want/need more work  One of the key drivers for the introduction for Real Time Information (RTI) is to capture multiple income streams 0 2 4 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Number of underemployed workers in Britain (m) Want more hours in current job (2.33m) Want replcement job with more hours (0.46m) Want an additional job (0.27m)76% 9% 15%
  25. 25. Interest in crowd labour / on-line work is rising 25  Crowd workers  Nearly 60% of all crowd workers live in North America and Europe.  Almost 50% have a bachelor degree.  The number of crowd workers is growing in excess of 100% a year.  Crowd members work at least once a month; about half work as often as once a day.  Nearly 77% of all workers have a primary job.  Crowd Providers  $1bn industry in 2012 (Staffing Industry Analysts)  Forecast to be $1.6bn in 2013  Projected to be a $5bn industry by 2018  Elance – UK is #2 in volume of task posted and #5 in number of crowd workers Source: Massolution 2012
  26. 26. UK – a top 10 country for both hiring and working 26
  27. 27. oDesk started in technology but is rapidly branching out 27
  28. 28. The top 10 on-line jobs UK businesses hire for 28  Q2 2013 Top Categories (by dollars spent):  1. Web programming  2. Web design  3. SEO (search engine optimization)  4. Mobile apps  5. Desktop applications  6. Graphic design  7. Blog & article writing  8. Ecommerce  9. Web research  10. Data Entry UK businesses have posted 344K+ jobs to date
  29. 29. What skills are driving growth of online hiring by UK clients? 29  Fastest-Growing Categories (based on 2-yr CAGR of gross services)  1. Technical support  2. Accounting  3. Email response handling  4. Game development  5. PR - Public relations  6. Advertising  7. Presentations  8. Copywriting  9. Web research  10. Illustration
  30. 30. Top skills of UK freelancers 30  Q2 2013 Top Categories: (by dollars earned)  1. Web programming  2. Website content  3. Blog & article writing  4. Translation  5. Technical support  6. Mobile apps  7. Web design  8. Copywriting  9. Graphic design  10. Software Project Management  Fastest-Growing Categories: (2yr CGGR of Gross Services)  1. Sales & lead generation  2. Copywriting  3. Software QA  4. Mobile apps  5. SEM - Search engine marketing  6. Translation  7. Technical writing  8. DBA - Database administration  9. Business plans & marketing strategy  10. Website content
  31. 31. Rising volumes of flexible hours engagement models 31 Means of Engagement specified 2011 2012 Increase 2011/2012 H1 2013 (to end June) Pro-rata increase 2012/2013 Flexible Working 128,881 190,013 47% 112,628 19% Flexible Hours 43,892 105,784 141% 72,628 37% Hours to Suit 10,952 20,491 87% 13,848 35% Hours as Required 3,804 5,996 58% 3,732 24% Variable Hours 953 2,361 148% 954 (17%) Zero Hours contract 942 1,691 80% 1,017 20% Total number of opportunities offering flexible working patterns 189,424 326,336 72% 204,807 26% Set into context of all the job vacancy types advertised, as captured by the ONS, (Av. 519k during H1 2013), opportunities offering flexible working hours patterns constitute 6.6% of the work currently being
  32. 32. Back to the Starting Place – Charles Handy’s Shamrock 32  Implications for the organisation.  Implications for the individual.  Implications for policy makers:  “This rethinking of organisations will force the rethinking of retirement, unemployment insurance, healthcare, employment taxes and social security, to name but a few. Organisations will step out of the role of providing these benefits to permanent employees and something needs to step into the void.  “..how we might need to adapt in order to not just survive, but thrive.”
  33. 33. The implications of further workforce fragmentation for the recruitment industry 33  The use of intermediaries will rise:  To help realise the potential of such fragmentation.  To manage compliance.  The range of commercial models will diversify:  Introductory fee models for temporary labour – rather than on-going margin.  Payment upon outcomes – shift towards „Statement of Work‟, apprenticeships, on-line working, etc..  Compliance has an increasing and, potentially, standalone value
  34. 34. The implications of further workforce fragmentation for the recruitment industry 34  Legacy processes will need to be modified to enable engagement – throughout the entire lifecycle - with a diversifying range of worker types:  How/where you raise awareness  How you address the levels of transparency demanded by each group  How you hold a seamless dialogue across their chosen range of media  The levels of personal contact versus automated communications that suit the profile of each worker community  How you business accommodates a shift towards payment upon outcomes
  35. 35. The implications of further workforce fragmentation for the recruitment industry 35 The opportunities – beyond transactional temporary, contract, interim and permanent recruitment – are considerable. They could also, potentially, be more lucrative.
  36. 36. Contacts 36 Belinda Johnson owner - worklab e: belinda.johnson@work-lab.co.uk T: @worklabinsights m: 07771 534365 www.work-lab.co.uk

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