Companies struggle to
find qualified workers in the mature phase of any business cycle. Yet as we enter
a new decade in 2020, they have more than a hyper-low
unemployment rate to grapple with.
Businesses face a gaping
qualitative chasm between the jobs businesses need to fill and the
interest of workers in filling them. As a result, employees have more leverage
than ever to insist that jobs cater to their lives, locations, and demands to be creatively challenged.
Accordingly, IDC predicts
that by 2021, 60 percent of Global 2000 companies will have adopted a future
workspace model -- flexible, intelligent, collaborative, virtual, and physical
work environments.
Stay with us now as BriefingsDirect explores how businesses must adapt to this new talent landscape and find the innovative means to bring future work and workers together. Our flexible work solutions panel consists of Stephane Kasriel, the former Chief Executive Officer and a member of the board at Upwork, and Tim Minahan, Executive Vice President of Strategy and Chief Marketing Officer at Citrix. The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions.
Here are some excerpts:
Gardner: If flexible work is the next big thing, that means we
have been working for the past decade or two in an inflexible manner. What’s
wrong with the cubicle-laced office building and the big parking lot next
to the freeway model?
 |
| Minahan |
Minahan: Dana,
the problem dates back a little further. We fundamentally haven’t changed the
world of work since Henry
Ford. That was the model where we built big work hubs, big office buildings,
call centers, manufacturing facilities -- and then did our best to hire as much
talent around that.
This model just isn’t working anymore
against the backdrop of a global talent shortage, which is fast approaching
more than 85 million medium- to high-skilled workers. We are in dire need of more
modern skill sets that aren’t always located near the work hubs. And to your earlier
point, employees are now in the driver’s seat. They want to work in an
environment that gives them flexible work and allows them to do their very best
work wherever and whenever they want to get it done.
Gardner:
Stephane, when it comes to flexible work, are remote work and freelance work
the same? How wide is this spectrum of options when it comes to flexible work?
Kasriel: Almost
by definition, most freelance work is done remotely. At this stage, freelancing
is growing faster than traditional work, about three times faster, in fact.
About 35 percent of US workers are doing some amount of freelancing. And the vast
majority of it is skilled work, which is typically done remotely.
 |
| Kasriel |
Increasingly what we see is
that freelancers become full-time freelancers; meaning it’s their primary
source of income. Usually, as a result of that, they tend to move. And when
they move it is out of big cities like San Francisco and New York. They tend to
move to smaller cities where the cost of living is more affordable. And so that’s
true for the freelance workforce, if you will, and that’s pulling the rest of the
workforce with it.
What we see increasingly is
that companies are struggling to find talent in the top cities where the jobs
have been created. Because they already use freelancers anyway, they are also
allowing their full-time employees to relocate to other parts of the country,
as well as to hire people away from their headquarters, people who essentially
work from home as full-time employees, remotely.
Gardner: Tim,
it sounds like Upwork and its focus on freelance might be a harbinger of what’s
required to be a full-fledged, flexible work support organization. How do you
view freelancing? Is this the tip of the arrow for where we are headed?
Minahan: Against
the backdrop of a global
talent shortage and outdated model of hub-and-spoke-based work models, the
more innovative companies -- the ones securing the best talent -- go to where
the talent is, whether using contingent or full-time workers.
They are also shifting from the
idea of having a full-time employee staff to having pools of talent. These are
groups that have the skills and capabilities to address a specific business
challenge. They will staff up on a given project.
So, work is becoming much more
dynamic. The leading organizations are tapping into that expertise and talent
on an as-needed basis, providing them an environment to collaborate around that
project, and then dissolving those teams or moving that talent on to other
projects once the mission is accomplished.
Gardner: So,
it’s about agility and innovation, being able to adapt to whatever happens. That
sounds a lot like what digital business transformation is about. Do you see
flexible work as supporting the whole digital transformation drive, too?
Minahan: Yes,
I certainly do. In fact, what’s interesting is the first move to digital
transformation was a shift to transforming
customer experience, of creating new ways and new digital channels to
engage with customers. It meant looking at existing product lines and digitizing
them.
And along the way, companies
realized two things. Number one, they needed different skills than they had
internally. So the idea of the contingent worker or freelance worker who has that
specific expertise becomes increasingly vital.
They also realized they had
been asking employees to drive this digital transformation while anchoring them
to archaic or legacy technology and a lot of bureaucracy that often comes with
traditional work models.
And so there is now an
increased focus at the executive C-suite level on driving employee experience and
giving employees the right tools, the right work environment, and the flexible
work models they need to ensure that they not only secure the best talent, but
they can arm them to do their very best work.
There
is now an increased focus at the C-suite level on driving employee
experience and giving employees the right tools, work environment, and
flexible work models they need to ensure they can do their very best
work.
Gardner:
Stephane, for the freelance workforce, how have they been at adapting to the
technologies required to do what corporations need for digital transformation?
How does the technology factor into how a freelancer works and how a company
can best take advantage of them?
Kasriel: Fundamentally,
a talent strategy is a critical part of digital transformation. If you think about
digital transformation, it is the what, and the talent strategy is the how.
And increasingly, as Tim was saying, as businesses need to move faster, they
realize that they don’t have all the skills internally that they need to do
digital transformation.
They have to tap into a pool
of workers outside of the corporation. And doing this in the traditional way,
using staffing firms or trying to find local people that can come in part-time,
is extremely inefficient, incredibly slow, and incompatible with the level of
agility that companies need to have.
So just as there was a digital
transformation of the business firm, there is now also a digital transformation
of the talent strategy for the firm. Essentially work is moving from an offline
model to an online model. The technology helps with security, collaboration, and
matching supply and demand for labor online in real-time, particularly for
niche skills in short-duration projects.
Increasingly companies are reassembling
themselves away from the traditional Taylorism model of
silos, org charts, and people doing the same work every single day. They are
changing to much more self-assembled, cross-functional, agile, and team-based
work. In that environment, the teams are empowered to figure out what it is
that they need to do and what type of talent they need in order to achieve it.
That’s when they pull in freelancers through platforms such as Upwork to add
skills they don’t have internally -- because nobody has those internally.
And on the freelancer side,
freelancers are entrepreneurs. They are usually very good at understanding what
skills are in demand and acquiring those skills. They tend to train themselves
much more frequently than traditional full-time employees because there is a
very logical return on investment (ROI) for them to do so.
If I learned the latest Java framework in a few weeks, for example,
I can then bill at a much higher rate than I would otherwise could if I didn’t
have those skills.
Gardner:
Stephane, how does Upwork help solve this problem? What is your value-add?
Upwork secures hiring, builds trust
Kasriel: We
essentially provide three pieces of value-add. One is a very large database of
freelancers on one side and a very large database of clients and jobs on the
other side. With that scale comes the ability to have high liquidity. The
median time to fill a job on Upwork right now is less than 24 hours, compared
to multiple weeks in the offline world. That’s one big piece of it.
The second is around an
end-to-end workflow and processes to make it easy for large companies to engage
with independent contractors, freelancers, and consultants. Companies want to
make sure that these workers don’t get misclassified, that they only have
access to IT systems they are supposed to, that they have signed the right
level of agreements with the company, and that they have been background
checked or whatever other processes that the company needs.
So, the three pieces around
matching, collaboration and security software, and trust and safety are the
things that large companies are using Upwork for to meet the needs of their hiring
managers.
Fundamentally, we want to be
invisible. We want the platform to look simple so that people can get things done
by having freelancers -- and not have to think about all of the complexities of
being compliant with the various roles that large companies have as it relates
to engaging with people in general, but with independent contractors in
particular.
Mind the gap in talent, skills
Gardner: Tim,
a new
study has been conducted by the Center for
Business and Economic Research on these subjects. What are some of the findings?
Minahan: At
Citrix, we are committed to helping companies drive higher levels of employee
experience using technology to create environments that allow much more
flexible work models and empower employees to get their very best work done. So
we are always examining the direction of overall work models in the market. So
we partnered to better understand how to solve this massive talent crisis.
Consider that there is a gap of close to 90 million medium- to high-skilled workers around the globe, all of these unfilled jobs. There are a couple of ways to solve this. The best way is to expand the talent pool. So, as Stephane said, that can be through tapping into freelance marketplaces, such as Upwork, to find a curated path to the top talent, those who have the finest skills to help drive digital transformation.
But we can couple that with digital workspaces
that allow flexible work models by giving the talent access to the tools and
information they need to be productive and to collaborate. They can do that in a
secure environment that leaves the company confident their information and
systems remain secure.
The
key findings of the study are that we have an untapped market. Some 69
percent of people who currently are unemployed or economically inactive
indicate that they would start working if given more flexible work
models and the technology to enable them to work remotely.
The key findings of the Center
for Business and Economic Research study are that we have an untapped market. Some
69 percent of people who currently are unemployed or economically inactive
indicate that they would start working if given more flexible work models and the
technology to enable them to work remotely.
Think about the massive shifts
in the demographics of the workplace. We talk about millennials coming into the
workforce, and new work models, and all of that’s interesting and important. But
we have a massive other group of workers at the other end of the spectrum -- the
baby boomers -- who have massive amounts of talent and knowledge and who are
beginning to retire.
What if we could re-employ them
on their own terms? Maybe a few days a week or a few hours a day, to contribute
some of their expertise that is much needed to fill some of the skills gaps
that companies have?
We are in a unique position
right now and have an incredible opportunity to embrace these new work models,
these new freelance marketplaces, and the technology to solve the talent gap.
Kasriel: We
run a study every year called Freelancing in America;
we have been running it for six years now. One of the highlights of the study
is that 46 percent, so almost half of freelancers, say that they cannot take a
traditional full-time job. And that’s usually primarily driven by health
issues, by care duties, or by the fact that they live in a part of the US where
there are no jobs for their skills. They tend to be more skilled and educated
on average than non-freelancers, and they tend to be completely undercounted in
the Bureau of Labor Statistic data every month.
So when we talk about no
unemployment in the country, and when we talk about the skills gap, there is
this other pool of talent that tends to be very resilient, really hardworking,
and highly skilled -- but who cannot commit to a traditional full-time job that
requires them to be on-site.
I tell them to go online and
look at the talent available there. You will find a world of work, of people
that are extremely eager to work for you. In fact, they are probably going to
be much more loyal to your company than anybody else because you are by far the
best employer that they could work with.
Gardner: To be
clear, this is not North America or the US only. I have seen similar studies
and statistics coming out of Europe and Japan. They differ from market to
market, but it’s all about trying to solve the mismatch between employers and available
potential talent.
Tim, people have been working
remotely for quite a while now. Why is this not an option, but a necessity,
when it comes to flexible and remote work?
Minahan: It’s
the market dynamics we have been talking about. Companies struggle to find the
talent they need at scale in the locations where they traditionally have major
office hubs. Out of necessity, to advance their business and access the skills
they need, they must embrace more flexible work models. They need to be looking
for talent in nontraditional ways, such as making freelance workers part of
their regular talent strategies, and not an adjunct for when someone is out on
sick leave.
And it’s really accelerating
quite dramatically. We talk a lot about that talent crunch, but in addition,
it’s also a skills gap. As Stephane was saying, so many of these freelance
workers have the much-in-demand skills that people need.
When you think about the
innovators in the industry, folks like Amazon
who
recently said, “Hey, we can’t find all of the talent we need with the
skills that we need so we are going to retrain and spend close to $1 billion to
retain a third of our workforce.”
They are expanding their
talent pool. That’s what innovative companies are beginning to do. They are
saying: “Okay, we have these constraints. What can we do, how can we work
differently, how can we embrace technology differently, and how can we look at
the workforce differently in order to expand our talent pool?”
Gardner: If
you seek out the best technology to make that flexible workforce innovative,
collaborative, and secure, are there other economic paybacks? If you do it
right, can out also put money to the bottom line? What is the economic impact?
More remote workers, more revenue
Minahan: From the
study that we did around remote workers and tapping into the untapped
talent pool, the research found that this could equate to more than $2 trillion
in added value per year -- or a 10 percent boost to the US GDP. It’s because otherwise
businesses are not able to deliver services because they don’t have the talent.
On a micro level, at an
individual business level, when workers are engaged in these more flexible work
models they are more stress-free. They are far more productive. They have more
time for doing meaningful work. As a result, companies that embrace these work
models are seeing far higher revenue growth, sometimes upward of 2.5 times.
There are revenue growths, far higher profitability, and far greater worker retention
than their peers.
Kasriel: It’s
also important to remember that the average American worker spends more time
commuting to work than on vacation in a given year. Imagine if all of that time
could be reused to be productive at work, spend another couple of hours every
day doing work for the company, or doing other things in their lives so they
could consume more goods and services, which would drive economic growth.
Right
now the amount of waste coming from companies requiring that their
workers commute to work is probably the biggest amount of waste that
companies are creating in the economy. It also causes income inequality,
congestion, and pollution.
Right now the amount of waste
coming from companies requiring that their workers commute to work is probably
the biggest amount of waste that companies are creating in the economy. By the
way, it also causes income inequality, congestion, and pollution. So there are
countless negative externalities that nobody is even taking into account. Yet the
waste of time by forcing workers to commute to work is increasing every year
when it doesn’t need to be.
Some 20 years ago, when people
were talking about remote work, it felt challenging from a cultural standpoint.
We were all used to working face-to-face. It was challenging from a
technological standpoint. We didn’t have broadband, secure application
environments such as Citrix, and video conferencing. The tools were not in the
cloud. A lot of things made it challenging to work remotely -- but now that
cultural barrier is not nearly as big.
We are all more or less
digital natives; we all use these tools. Frankly, even when you are two floors
away in the same building, how many times you take the elevator to go down to
meet somebody face-to-face versus chat with them or do a video conference with
them?
At this stage, whether you are
two floors away or 200 miles away makes almost no difference whatsoever. Where
it does make a difference is forcing people to have to come to work every
single day when it adds a huge amount of constraint in their lives and it’s
fundamentally not productive for the economy.
Minahan: Building
on what Stephane said, the study we did found that in addition to unlocking
that untapped pool of talent, those folks who do currently have full-time jobs,
95 percent of them said they would work from home at least twice a week if given
the opportunity. To Stephane’s point, you just look at that group alone and the
time they would save from commuting multiplies to 105 hours of newly free time
per year, time they didn’t have to spend commuting and doing unproductive
things. Most of them said that they would put more hours into work because they
didn’t have to deal with all the hassle of getting there.
Flexible work provides creativity
Gardner: What
about the quality of the work? It seems to me that creative work happens in its
own ways, even in a state of leisure. I have to tell you some of the best
creative thoughts I have occur when I’m in the shower. I don’t know why. So
maybe creativity isn’t locked into a 9-to-5 definition.
Is there something in what
we’re talking about that caters to the way the human brain works? As we get
into the age of robotic process
automation (RPA) should we look more to the way that people are intrinsically
creative and free that?
Kasriel: Yes,
the World Economic Forum has called attention to such changes in our evolution,
the idea that progressively machines are going to be taking over the parts of
our jobs that they can do better than we can. This frees us to be the best of
ourselves, to be humans. The repetitive, non-cognitive work being done
in a lot of offices is progressively going to be automated through RPA and artificial
intelligence (AI). That allows us to spend more time on the creative work. The
nature of creative work is such that you can’t order it on-demand, you can’t
say, “Be creative in the next five minutes.”
It comes when it comes. It’s
the inspiration that comes. So putting in artificial boundaries of saying, “You
will be creative from 9-to-5, and you will only do this in the office
environment,” is unlikely to be successful. Frankly, if you look at workplace
management, you see companies increasingly trying to design work environments
that are mix between areas of the office where you can be very productive -- by
just doing the things that you need to do -- and places where you can be
creative and thinking.
And that’s just a band-aid
solution. The real solution is to let people work from anywhere and let them
figure out the time at which they are the most creative and productive. Hold
people accountable for an outcome, as opposed to holding them accountable for
the number of fixed-time hours they are giving to the firm. It is, after all, very
weakly correlated to the amount of output, of what they actually generate for
the company.
Minahan: I
fully agree. If you look at the overall productivity and the GDP, productivity advanced
consistently with each new massive innovation right up until recently. The
advent of mobile devices, mobile apps, and all of the distractions from communications
and chat channels that we have at work have reached a crescendo.
If we can free them up from
those distractions and give them an
environment to work where and how they want, one of the chief benefits is
the capability to drive greater innovation and creativity than they can in an interruptive
office environment.
Gardner: We
have been talking in general terms. Do we have any concrete examples, use cases
perhaps, that illustrate what we have been driving at? Why is it good for
business and also for workers?
Blended workforce wins
Kasriel: If you
look at tech companies created in the last 15 to 20 years, increasingly you see
them as what people call remote
first, where they try to hire people outside of their main headquarters
first and only put people in the office if they happen to live nearby. And that
leads to a blended workforce, a mix between full-time employees and free-lancers.
The companies most visible
started in open-source software development. So if you look at Mozilla, the non-profit behind Firefox, or if you look at
the Wikipedia foundation, the
non-profit building Wikipedia, if you look at Automattic,
the for-profit open source company that builds WordPress,
or if you look at GitLab. I mean, if
you look at Upwork, we ourselves are mostly distributed, 2,000 people working
in 800 different cities. InVision
would be another example.
So, very well-known tech
companies that build products used by hundreds of millions of people. WordPress
alone empowers a subset of the Internet. These companies tend to have well over
100,000 workers between full-time employees and freelancers. They either have
no office or most of their people are not working in an office.
Microsoft
started using Upwork a few years ago. At this stage, they have
thousands of different freelancers working on thousands of different
projects. They are doing it becuase it's the right thing to do.
The companies that are a
little bit more challenging are the ones that have grown in a world where
everybody was a full-time employee. Everybody was on-site. But progressively
they have made a shift to more flexible work models.
Probably the company that I’ve
seen to be the most publicly vocal about this is Microsoft. Microsoft started using
Upwork a few years ago. At this stage, they have thousands of different
freelancers working on thousands of different projects. Partly they do it
because they struggle to find great talent in Redmond, Wash., just like
everybody else. There is a finite talent pool. But partly they are doing it
because it’s the right thing to do.
Increasingly we hear companies
say, “We can do well, and we can do a good at the same time.” That means helping
people who may be disabled, people that may have care duties, young parents
with children at home, people that are retiring but are not fully willing to
completely step out of the workforce, or people that just happened to live in
smaller cities in the U.S. where increasingly, even if you have the skills,
they are not local jobs.
And they have spoken about
this in both terms, which is: It’s the right thing for their shareholders, the
right thing for their business, but it’s also helping society be more fair and
distributed in a way that benefits workers outside of the big tech hubs of San
Francisco, Seattle, Boston, New York, and Austin.
Gardner: Tim,
any examples that demonstrate why a future workspace model helps encourage this
flexible work and why it’s good for both the employees and employers?
May the workforce be with you
Minahan:
Stephane did a great job covering the more modern companies built from the
ground up on flexible work models. He brought up an interesting point. It’s
much more challenging for traditional or established companies to transition to
these models. One that stands out and is relevant is eBay.
eBay, as we all know, is one
of the largest digital marketplaces in the world. Like many others, they built
call centers in major cities and hired a whole bunch of folks to answer and
provide support calls to buyers and sellers as they were conducting commerce in
the marketplace. However, their competition was setting up call centers right
down the street, so they were in constant churning -- hiring, training, losing
them, and needing to rehire. Finally they said, “This can’t go on. We have to
figure out a different model.”
They embraced technology and consequently
a more flexible work model. They went where the talent is: The stay-at-home
parent in Montana, the retiree in Florida, the gig worker in New York or Boston.
They armed them with a digital workspace that gave them the information, tools,
and knowledge base they needed to answer questions from customers but in far more
flexible work models. They could work three hours a day or maybe one day a week.
eBay was able to Uberfy the workforce.
They started a year-and-a-half ago and are now they are close to having 4,000 of these call center workers as a remote workforce, and it’s all transparent to the rest of us. They are delivering a higher-level service to the customers by going to where the talent is and it’s completely transparent. We are unaware that they are not sitting in a call center somewhere. They are actually sitting in a remote office in all corners of the country.
Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy. Sponsor: Citrix.
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