Manage Your Workforce Ecosystem, Not Just Your Employees

“How do you define your workforce?” We have posed this question to dozens of executives and in multiple global management surveys. The most common answer is also the most surprising.

A confident minority of executives say their workforce is just their employees. But the overwhelming majority, especially leaders on the front lines of organizational transformations, takes a broader view that goes beyond just employees. Increasingly, they characterize the workforce as all of the people and groups involved in achieving the company’s business objectives. Organizations’ extended workforces have become so essential to their businesses, brands, and approaches to value creation that they need to think differently about, and act differently toward, their entire workforce.

That represents a shift in management perspective since we began our study of the future of the workforce a few years ago. We are seeing this change across industries and a variety of organizations, large and small — and it is challenging leaders to redefine who and what constitutes their workforce and to develop new management practices and organizational structures.

Hierarchical, command-and-control, internally focused management practices are ill suited for workforces that span internal and external organizational boundaries. Using siloed functions to independently manage employees and external contributors, for example, is fraught with challenges: Ill-defined decision rights, governance processes, and power dynamics can undermine even the most well-intentioned executives. In addition, the technology systems for managing employees are typically different and disconnected from those for accessing and tracking external contributors. This lack of integration creates inefficiencies that can thwart efforts to obtain and maintain strategically valuable capabilities.

We define workforce ecosystem as a structure that encompasses actors, from within the organization and beyond, working to create value for an organization. Within the ecosystem, actors work toward individual and collective goals with interdependencies and complementarities among the participants.

Workforce ecosystems include employees as well as external contributors and partners of various kinds — long- and short-term contractors, gig workers, application developers, service providers, and crowdsourced actors. An ecosystem perspective explicitly recognizes that accessing and engaging workforces is no longer the sole purview of the human resources function but requires cross-functional actions involving leaders in the C-suite, IT, procurement, finance, legal, and other areas.

Intentionally orchestrating a workforce ecosystem requires leaders to coordinate activities across their own organization and with external contributors.