Orchestrating Workforce Ecosystems

Strategically Managing Work Across and Beyond Organizational Boundaries

by: Elizabeth J. Altman, David Kiron, Robin Jones, and Jeff Schwartz
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Confronting the challenges of intentionally leading and coordinating workforce ecosystems — what we call orchestrating workforce ecosystems — is at the heart of this report. This issue is especially timely given the ongoing workforce shifts brought about by the COVID-19 pandemic, shifting worker preferences, and the changing nature of work.

This year’s research shows that orchestrating a workforce ecosystem is a multifaceted effort that involves integration among many business functions. In mature legacy organizations in particular, we see companies changing basic management practices around how they access, engage, and develop workers; we see leaders adapting to a changing workforce where they have more contributors but less control. In some cases, we see upwards of 30%-50% of an organization composed of contingent workers, and organizations increasingly relying on third parties to deliver some of their most essential services. With laws preventing traditional performance management for contingent workers, and with companies increasingly relying on arms-length contracting for critical services, some leaders have limited management options with a large percentage of their workers.1 We see executives often struggling to deal with a range of cultural issues as well: How far should they go to include external contributors in existing corporate culture? To what extent do diversity, equity, and inclusion principles and practices apply to external workers?

Our research shows that companies that are most intentionally orchestrating their workforce ecosystems have five common characteristics. They are far more likely than other organizations to:

  • Closely coordinate cross-functional management of internal and external workers.
  • Hire and engage the internal and external talent they need.
  • Support managers seeking to hire external workers.
  • Have leadership that understands how to allocate work for internal and external contributors.
  • Align their workforce approach with their business strategy.

One thing our research makes clear: Leaders who view their workforce as an ecosystem structure tend to think differently about, and act differently toward, their workforce than leaders who view their workforce strictly in terms of hired (usually full-time) employees.

References

1. “Independent Contractor Status Under the Fair Labor Standards Act (FLSA): Withdrawal,” Federal Register 86, no. 86 (May 6, 2021): 24303-24326

2. J. Berg, M. Aleksynska, V. De Stefano, et al., “Non-Standard Employment Around the World: Understanding Challenges, Shaping Prospects,” PDF file (Geneva: International Labour Organization, 2016), www.ilo.org; and D. Weil, “The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It” (Cambridge, Massachusetts: Harvard University Press, 2014).

3. B. Stone, “Amazon Unbound: Jeff Bezos and the Invention of a Global Empire” (New York: Simon & Schuster, 2021), 228.

4. H.O. Gibson, “Essays on Operations Management: Setting Employees Up for Success” (Ph.D. diss., Harvard Business School, 2015); and H.O. Gibson, “T-Shaped Managers — One Size Does Not Fit All: Exploratory Study From the Military,” working paper 22-003, Harvard Business School, Cambridge, Massachusetts, July 2021.

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Comment (1)
Kumar Venkatesan
This is a great piece of work with fantastic insights, survey results and facts. Kudos to the authors and MIT SMR Team.