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Why Liquid Workforces are a Solution for Leading Companies

August 5, 2020
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5 minutes
Lynn's diverse perspectives on business stem from her extensive experience as a management consultant - her role as a beloved wife, mother and grandmother adds further depth to her insights.

It is such a clever analogy to describe the trend towards a more flexible workforce as the liquid workforce.

A liquid maintains its volume but flows and takes the shape of its container. Its particles have sufficient attraction not to fly apart, but they are free to move around each other. This so neatly fits the description of the liquid workforce. It is a flexible blend of in-house and outsourced staff, working together and around each other where necessary. It adapts to the changing shapes or needs of organizations and flowing on to new shapes as needed.

However, this cradle to grave approach, with its hierarchies and silos, does not meet the need for agility in a digitally powered, project-driven world.

Emerging employment models

Outsourcing is obtaining goods or services from an outside supplier on a contract basis. The purpose is to handle some of the ongoing tasks in your business or to work on specific projects.

That sounds simple enough. But you can be forgiven if you are somewhat confused by all the terminology.

Your liquid workforce is made up of a mix of full-time, part-time and contract workers (even robots may be included here!). They may be local (inshore) or in other parts of the world (offshore). They may be employed by the company but work from home (telecommuters) or in places that are far from the company's home base (remote employees). Those that are not employees can be hired for short-term or longer-term projects. We usually call them contingent workers and part of the gig economy. For example,freelancers, independent contractors and consultants. They may contract directly with the organization needing their services or they may work through a consulting platform .

Deciding on the model to apply to your organization depends on the type of business you are in. It also depends on specific project or growth needs and associated risks, the availability of local or in-house talent, your priorities and your budget.

“If you want the best talent, limiting yourself to the talent that’s available in a single country (let alone a single city) is shooting yourself in the foot.” -Coby Chapple, Product Designer

Who’s outsourcing and why?

It's probably not surprising that some of the early adopters of the outsourcing model are in the tech industry, many of them doing so while still in start-up mode.

  • WhatsApp

    It started in the US with 30 full-time and 5 part-time employees but used Russian developers to cut costs.
  • Skype

    The two founders were from Denmark and Sweden, but 3 developers in Estonia did their original back-end development.
  • Alibaba

    China-based Alibaba found that the best developers for scaling their massive ecommerce sites were in the US.
  • Google

    It has a mix of in-house employees and remote employees for IT, development, call centers and the like, with remote employees in 150 cities in 50 countries.
  • Microsoft

    It has as many contractors as it has in-house employees - brought in for specific expertise and to provide services beyond Microsoft’s traditional scope. They are managed by outsourced suppliers.
  • GitHub

    The company that hosts software code and version control, was recently sold to Microsoft for $7.5 billion. But they had no money at the start. GitHub's main Git specialist was an outside contractor. Today, half of all "Hubbers" work remotely, in 18 different countries. They give attention to keeping connected and maintaining some comradery. They take regular virtual coffee breaks.
  • Upwork

    It is a platform for freelancers, so it's perhaps to be expected that they used freelancers to set up their own technical infrastructure. What's interesting is that Upwork now has a dedicated division for enterprises. They report that about 30% of Fortune 500 companies make use of their platform to hire contingent workers.

All of these companies have recognized that it is sometimes best to look beyond themselves for either the best skills or the most cost-effective skills. All of them have done it to fuel business growth.

According to Coby Chapple, then Product Designer at GitHub, "If you want the best talent, limiting yourself to the talent that's available in a single country (let alone a single city) is shooting yourself in the foot."

The upside of a Liquid workforce

Even if you are not a global powerhouse, there might be a reason for you to use outsourced resources. In particular, you may face the complexities associated with a shift to project-based, matrix-type organization of work and the explosion of technology. It has dramatically transformed the way business is done.

So, you may be looking for different talent and skills from those you have. Hiring freelancers – and especially when this is done via a freelancer or consultant platform - is seen to be quicker, more transparent and more cost effective. It is a way to give you just-in-time capability. As a major plus, employment costs become variable rather than fixed. And, in addition, full-time employees are exposed to the new skills brought in by independent professionals.

A not-so-obvious benefit of a liquid workforce is improved productivity. A Stanford University study found that workers found it easier to concentrate at home than in the office. They took fewer breaks, less sick time and fewer days off. In fact, many squeezed an extra day’s work into a week. Millennials prefer to remain with a company that provides remote work as an option. Even if they had to take a small pay cut. One estimate looked at not having to lease office space, plus increased productivity, higher retention and business continuity. It basically showed a saving of $11 000 per year per remote worker.

However, dealing with a new type of workforce is not all plain sailing. It is a skill of its own and can add yet more choppiness to the waters that businesses are trying to navigate. Increasingly, companies are looking for help from consultants to help them weather the storm of constant change.

How to hire freelance consultants

If you are an employer, one of the biggest problems with freelance markets is that you are not sure that freelancers can do what they say they can. You might also have to wade through multiple applications for your project, and then deal with the project management, quality assurance and administrative requirements of the placement.

Alternatively, if you are a consultant, it can be difficult to find the clients and projects that are right for you. Mostly, you are on your own when it comes to making proposals, negotiating rates and keeping up to date with all the admin.

A solution for both employers and freelance consultants is to use a consulting platform, whose purpose it is to connect experts with the companies who need them. Freelance consulting platforms such as Consultport source and pre-screen both consultants and clients and match them to projects. Both have a choice about who to work with, but after that they can get on with the work required, while the platform manages all the backup support, controls and administration. This significantly reduces risk and time and increases the chance of successful completion of projects.

Staying relevant in a project-based digital landscape

Running a business may feel more and more like being on a boat in stormy waters. Companies must pivot quickly and adapt continuously if they want to remain relevant in a business world that is increasingly project-based and digital.

One solution is to shift to a flexible, liquid workforce. Online consulting platforms have made it easier. They give you access to freelance management consultants with the digital expertise and the project management, strategic analysis and planning skills to help you stay afloat.