Managing External Contributors in Workforce Ecosystems

Novartis’s workforce includes 110,000 employees and 50,000 contractors and temporary workers. Cisco has 83,000 full-time employees and 50,000-plus contingent workers of various types.1 Both companies rely substantially on a workforce ecosystem that includes many kinds of external contributors, including tens of thousands of individual contractors, to achieve their business outcomes. They are not alone.

Our global executive surveys show that a majority of companies — of all sizes — rely significantly on external contributors to build and grow their businesses.2 These contributors might include long- and short-term contractors, professional services companies, gig workers, crowdsourced contributors, app developers that complement a company’s product or service, and even certain technologies. Organizations vary in terms of how much, or whether, to include external workers in definitions of “their” workforce.

As organizations deepen their dependence on external workers, many executives are struggling to determine the extent to which they should integrate both the management of employees and external contributors and the systems and processes they use as they engage workers with different employment arrangements. Our ongoing research highlights a variety of possible approaches, emphasizing greater or lesser degrees of integration.

A common challenge afflicts most approaches: entrenched organizational behaviors. Companies that are starting to take a more deliberate approach to managing their employees and contract workers together often find that the functions responsible for employees and contract workers are siloed and have different, uncoordinated approaches. Allocating work among employees and external contributors can be a challenge as well. Leaders may struggle with determining which tasks to insource or outsource and where to look for needed skills. What’s more, workforce planning becomes a far more complicated task when the percentage of external contributors in the overall workforce increases, forcing shifts in organizational dynamics, especially among HR, finance, procurement, and business unit leaders.