Another month in British business and the redundancies keep coming. Among the latest in the line of layoffs are BT’s and Vodafone’s plans to shed more than 60,000 jobs collectively over the next few years, representing headcount reductions of about 42% and 12% respectively.
This is not a temporary cyclical slump from which the market will eventually recover. The key factors behind this drastic downsizing drive – automation and the need to simplify operations – point to the emergence of a new kind of organisation.
So what will this company of the future look like? Growth numbers recorded by freelance hiring platforms and predictions from futurists suggest that it will take the form of a small core of leaders and managers engaging and overseeing teams of skilled operators working on a flexible, third-party basis.
What is a mutable organisation?
Richard Skellett is the founder of Globalution, a group of consultancies working in fields ranging from IT and research to HR and marketing. The adjective he uses to describe this new organisational model is “mutable”. Mutable enterprises are ditching the traditional model of headcount as a cost and converting it to an outcome-based asset that comes with a direct return on investment, he says.
Skellett and his colleagues have helped many big companies to restructure themselves so that they become more outcome-focused. A fully mutable organisation will have entered a “permanent state of reinvention”, he says, which represents the ultimate business transformation.
“We tend to look at transformation as the digital piece that’s enabling business to be conducted differently, but what’s missing here is a resource transformation,” explains Skellett, who adds that a new tech architecture lacking the resource architecture to match “becomes a big problem. Looking at the transformation programmes that are running at the moment, we have a wonderful opportunity to make this the final transformation and to have organisationally, as well as individually, an operating model that enables this permanent state of reinvention.”
He believes that mutability is a universal model that will eventually apply to all organisations across all functions once two distinct workforces – AI and human – establish their roles.
“Everything will be affected,” Skellett predicts. “We’re already seeing the formation of organisations where there are few people in the business because they’re so automated. The investment community expects to see the emergence of businesses that can achieve 90% profit margins with very little human interaction.”
Could everyone become a freelance worker?
He stresses that the human workforce won’t necessarily lose out in this situation. People will need to transform their own operating models as the idea of pursuing a portfolio career becomes more realistic. One benefit of this, Skellett suggests, is that firms may be able to free up more funding for projects that they previously considered ‘nice to do’ but inessential enough to leave on the ideas page. As a result, many people may have the chance to do more rewarding work.
Platforms specialising in hiring freelance workers – Catalant, Freelancer.com and YunoJuno, for instance – have seen a surge in demand as employers seek a more agile way to staff their projects and people seek to operate more on their own terms, with compensation to match.
Catalant has more than 80,000 independent consultants on its books. In 2021, it saw a 42% year-on-year growth in the number of businesses using its marketplace of freelancers, thousands of whom had been staffers at big consultancies such as McKinsey and Bain. Many of them work regularly on projects for blue-chip companies, with several earning more than $500,000 (£400,000) a year, according to Catalant.
Between July and September last year, 296,000 freelance jobs were posted on Freelancer.com, which saw a particular increase in demand for people skilled in app development on the Android mobile operating system.
As long ago as 2015, the platform started working with the US government and Nasa to find people for complex projects in fields such as electrical engineering and data science. The most recent of these developed an augmented-reality display for emergency first responders. Freelancer.com is also working on an innovation challenge with the US National Institutes of Health on human gene editing, where scientists around the world will compete for $6m in prizes.
Lateral skilling versus upskilling
Freelancer.com’s vice-president of managed services, Bryndis Henrikson, reports that she’s seeing more and more businesses structured around a small internal team augmented by a rotating cast of freelance workers.
“This is one of the biggest transformations of the nature of large business in history, fuelled by the advance of generative AI and AI-powered freelancers,” she says.
Shib Mathew, YunoJuno’s founder and executive chairman, has observed a similar shift in recent years. He reports that the ratio of permanent employees to freelance workers in many companies has changed to such an extent that entire project teams are being led by freelancers.
“What we see more often these days is a core team setting the direction of a project and engaging much more specialised skills in an agile way,” Mathew says.
Skellett believes that the next step on the way to mutability will concern how people develop their expertise to maximise their freelance earning potential. They may need to expand into new fields – more a case of lateral skilling than upskilling.
He stresses that, once mutability becomes the organisational standard, “it’s no longer going to be about someone on 40 hours a week being paid at a certain rate. People will be able to go off, look at the outcomes they can deliver with their own personal value proposition and work on a more portfolio-based model.”