Shaping the future of work: unlocking the value of a blended workforce

In a volatile business world, the organisations that succeed will set themselves apart from the competition through workforce programmes that prioritise agility, digital transformation and upskilling. Yet many are still stuck in traditional workforce models that are becoming obsolete. So how can businesses build workforces that are fit for future challenges? 

To attempt to answer this question, Raconteur and workforce and talent solutions provider Guidant Global surveyed more than 300 HR, procurement and IT professionals. The research started by examining the top workforce challenges organisations expect to see over the coming year. 

More than three-quarters (76%) of respondents said that upskilling and developing their workforce to address skills challenges was a top priority, with two-thirds (66%) looking at workforce agility and 62% focusing on strategic workforce planning. The impact of data and the need to build metrics for data analysis is a concern too, with 43% looking to enhance their data, reporting and analytics abilities. 

Brian Salkowski is chief experience officer at Guidant Global. He says that in a modern workplace, there are many different ways of getting work done. Leading organisations no longer rely simply on permanent hiring, but adapt and move at speed to tackle future challenges. 

“The world of work is evolving at an unprecedented pace, and traditional workforce models simply can’t keep up. We are in the era of agility, where success belongs to companies that can adapt, scale and innovate in real time,” says Salkowski. 

Thriving in this environment means navigating a complex global ecosystem of partners, platforms and tools to access the right talent and get work done efficiently – all while keeping costs under control. “Businesses that embrace flexible, high-impact talent strategies will be the ones that stay ahead, while those clinging to outdated structures risk falling behind,” Salkowski adds.

Workforce changes

This new approach to workforce composition is borne out by the research. A third of organisations report a reduction in permanent employees over the past year, with 81% increasing their use of contractors with specialised skills. This trend is likely to continue over the next 18 months, with 90% planning on increasing their use of such contractors and 75% upping their use of freelancers. Those with bigger workforces are looking for external help too, with 65% turning more frequently to recruitment process outsourcing (RPO), where a company transfers all or part of its recruitment functions to an external services provider. These ‘blended workforces’ are the future, with 75% of respondents looking to blend internal and external teams in the next one to two years.

This is where leading organisations are taking a proactive approach to workforce building. By integrating external capabilities like RPO, managed service providers (MSP) and service procurement solutions with their internal functions, they’re accessing talent and getting work done at a faster pace than their competitors. This can be done selectively too, with leading organisations increasingly embracing modular RPO solutions that outsource specific recruitment capabilities, rather than complete outsourcing. 

“We’re seeing more organisations move towards skills-based hiring, so having a workforce model that can parse out supply and demand as it relates to individual roles and skill is vital,” says Salkowski.

Understanding the skills an organisation needs for future success is one thing, but then choosing the right selection strategy and finding talent is another. 

“When organisations talk about new skills, there’s always the decision about whether they build talent, buy talent or partner for specific skill areas. It could be that they choose to manage it internally, or they could choose to outsource. They might not want to hire full-time and instead choose to engage a freelance expert or service partner – all those decisions are critical,” says Salkowski. 

This can be where a workforce solutions partner can offer value by really understanding the problem and providing expert insights. Salkowski offers an example of the kind of questions a business should be asking when considering the merits of hiring an employee, engaging a contractor or getting work delivered via a statement of work vendor in a blended workforce model. 

“Does the role fall outside your normal expertise and ways of working? This could be a reason to bring in an external expert. Conversely, does the position build or retain intellectual property for your company? If so, that may be a good indicator that this is something that should be in-house. Being able to distil your thoughts into answerable questions and criteria is tremendously helpful,” he says.

Impact of technology

For leading organisations, staying ahead of the talent curve isn’t just about new workforce models – it’s also about looking to new technology to streamline processes and build new capabilities. 

Unsurprisingly, this is a trend that is particularly prevalent in tech firms. According to the Raconteur and Guidant Global research, more than one in three tech companies are looking to build AI-hybrid teams, compared with an average of 15% across all industries. 

However, there are practical concerns when it comes to integrating a blended workforce. Nearly half (46%) of research respondents cited security and compliance as the biggest challenge they face in building a blended workforce, with 42% saying technology integration impacts blended workforce management. The bigger the company, the more taxing this integration is, and organisations with over 5,000 employees are the most likely to say they face these issues. Ensuring these hygiene factors are appropriately dealt with is vital in ensuring the benefits of a blended workforce are safeguarded.

The pace of change in business means planning for future skills and business requirements is extremely difficult. Consequently, organisations need to prioritise agility, speed and flexibility when it comes to their talent needs and getting work done. Using a blended workforce allows them to prioritise specific projects, access hard-to-find skills and reduce risk around attrition while increasing innovation.

“Companies must have the agility to move and be flexible to talent demands in a way that they haven’t before. All organisations at the C-suite level are talking about the criticality of talent to their current and future enterprises. By using blended workforces, talent teams can get the right resources and models in place to give them the agility to move at pace and demonstrate the strategic value they can bring to their business,” Salkowski concludes.

Businesses are dealing with huge skills gaps – and things will only get harder. According to a report by McKinsey & Co, Europe and the US will face almost 25 million occupational transitions by 2030, with workers required to move into new roles or positions. 

As part of this, businesses will need a major skills upgrade. The demand for emotional, technological and social skills will rise as we see a growth in STEM and healthcare-related roles, while roles focusing on repetitive tasks or data collection such as customer service and sales will fall. 

“We are currently seeing ongoing and intensifying change regarding what the required skills looks like for a workforce that includes artificial intelligence,” says Jakob Stollberger, professor of leadership and organisational behaviour at Durham University Business School.

“Ironically, the skills that will be more valuable in the future – empathy and social skills – are those that are currently less valued by society, while those that are highly prized today like analytical skills in finance are likely to be automated by AI, leaving them less valuable,” he adds.

Talent shortages

This, in turn, is creating new recruitment challenges for organisations. Torn between making cost efficiencies and trying to recruit in-demand skills, many are re-evaluating their workforce strategy and examining new ways of working, from blended workforces to project work and skills mapping. 

Raconteur and Guidant Global’s research backs this up. When respondents were asked what their top five workforce objectives were for the next 12 months, upskilling and developing workforces to address skills gaps and building workforce agility came out on top.

However, finding people with the right skills in the talent marketplace is tough, particularly in functions reliant on technology and digital skills. 

Unsurprisingly, these positions are the most challenging to fill, with 90% of respondents struggling to hire digital and IT roles, followed by marketing and communications (78%) and business analysis (79%). 

This market competition for specific skills is only going to grow in the future. Organisations see industry-specific skills requirements (68%) and technical skills gaps (67%) as the two biggest recruitment challenges over the next 18 months, with compensation expectations (47%) also an issue. 

There is no singular solution to solving these talent challenges. According to the research, larger organisations with higher budgets are more likely to invest in reskilling training programmes to meet demand. Those with smaller footprints are having to think more creatively to remain competitive, looking to hire new positions and enhancing candidate experience.

A culture of continuous learning

So what steps can leaders take to future-proof their workforces?

Daniel Rowles is programme director of the digital transformation strategy executive education programme at Imperial College Business School.

Rowles believes that a culture of continuous learning and development across an entire organisation is key to future success. Raconteur and Guidant Global’s research also found that better cross-functional learning (34%) was a key benefit of having a blended workforce.

“The organisations that adapt a learning culture are the ones succeeding in this space. We don’t need to know everything, we just need to know slightly more than our competitors to drive competitive advantage. The superpower now is continuous learning,” says Rowles.

With this in mind, talent development becomes as much about your aptitude and ability to adapt to change as the skills you have.

“Skills benchmarking and structuring ongoing learning will become essential. Those with deep knowledge in their area of expertise and a broad set of problem-solving skills will become vital as we ask people to work with new tools and brand-new challenges,” adds Rowles.

Another solution organisations are turning to is to use technology to better identify skills gaps and streamline hiring processes. Fuelled by a boom in recruitment post-Covid, the use of artificial intelligence and automation by HR and talent functions has become commonplace as organisations seek better candidate experience and lower attrition.

While using technology can aid recruitment, it’s important to remember the human element in hiring and use technology to support, rather than replace, talent professionals. When it comes to talent, technology should augment rather than automate.

“Some businesses are using technology in the context of workforce management to make it more agile. Such attempts at introducing people analytics should be handled delicately, as employees and candidates require a human touch when it comes to matters related to human resource management,” says Stollberger.

Workforce strategy

Beyond technical solutions, the future success of many businesses may hinge on recruitment leaders shifting their mindset around attracting talent and how work gets accomplished.

This means thinking three steps ahead. Step one - as detailed above - is using data and AI solutions to better understand skills gaps and to anticipate future needs. 

Step two is embracing better strategic workforce planning. By developing more agile approaches to total workforce management through using contingent or freelance talent, businesses can quickly scale their hiring needs and utilise hard-to-access skills.

A starting point in dealing with this change is a shift away from traditional job roles to looking at the specific skills and competencies in-house and external talent can bring. This helps organisations to bridge skills gaps by allowing existing employees to use their skills across functions and projects, while also demonstrating where businesses need the help of contractors, freelancers or service providers. Research by the National Association of Colleges and Employers (NACE) found that nearly two-thirds (64.8%) of US employers use skills-based hiring practices for entry-level hires.

This focus on skills rather than just job roles allows organisations to look for talent in different markets and locations, approach innovation in a more agile way and share learning across the business. 

Step three is about leveraging new tools and platforms that improve talent sourcing and enhance the recruitment process. 

According to the Raconteur and Guidant Global research, 78% of HR and talent professionals now use artificial intelligence in skills gap analysis and learning recommendations, 73% use it in CV analysis and job matching, and 71% use AI in recruitment and candidate screening. 

When it comes to candidate and employee experience, 88% report using HR chatbots to speed up responses and direct enquiries to the right areas. 

We’re already seeing a proliferation of artificial intelligence in the talent ecosystem,” says Brian Salkowski, chief experience officer at Guidant Global. 

“In skills-based hiring, you can take old, static job descriptions and artificial intelligence can parse out the underlying skills, or build up skills in a job description. That’s happening today with a level of significant adoption,” he adds.

Forward planning

A 2022 survey of 1,200 professionals by Deloitte found that 85% of business executives believe that organisations need to create more agile ways of organising work to adapt to market changes. At the same time, more than half (55%) of workers say they already have, or are likely to, switch employment models throughout their career, moving between full-time, freelance and gig work. A more flexible workforce model can suit both employer and employee. 

“As organisations look to the future, there aren’t many areas of work that are as dynamic as workforce strategy, in terms of the change and opportunities it offers businesses,” says Salkowski. 

Predicting the future skills a business needs and building appropriate workforce strategies is a huge challenge. However, by analysing current skills gaps and future capability requirements, developing agile approaches to workforce management and utilising technology where appropriate, business leaders can transform workforce planning from a reactive process to one that provides a competitive advantage.

By being more strategic about their mix of in-house, contracted and service provider talent, businesses can leverage new skills, and become more agile. 

Raconteur and Guidant Global examined some of the key challenges driving changes in workforce strategy. It found that the need for specialist skills (51%), competition for talent (46%) and digital transformation (45%) were the most frequently cited issues. 

“Business leaders need to think more about the strategic make-up of their workforce. Some roles are fundamental, but there is also a lot of support work that is valuable but not necessarily core – it ebbs and flows in demand,” says Brian Salkowski, chief experience officer at Guidant Global. 

“So, a business might decide that 50% of its workforce is core to its work. Then, 30% might be variable, so it can leverage contingent work arrangements for that. A further 10% might be commoditised, so it might decide to outsource that, with a final 10% requiring expertise that only a service provider can give. It’s all about creating a structure to provide workforce agility without risking your ability to grow,” he adds.

Long-term benefits

While agility and access to specialist skills are often the main drivers of organisations turning to blended workforces, many see other benefits.

Raconteur and Guidant Global’s survey found that 36% of organisations report cost efficiencies related to using a blended workforce, with a third citing better risk management.

Greater creativity and the opportunity for cross-functional learning are other benefits organisations report seeing. 

Blended workforces can also positively impact employee satisfaction and experience. According to the survey, 49% of employers reported an overall improvement in employee work-life balance by using blended workforce models, while 35% saw enhanced employee wellbeing. By creating more manageable workloads, accessing external expertise and driving innovation to get work done successfully, businesses can create positive workplace cultures.

“The future is only going to see alternative work arrangements accelerate,” agrees Salkowski. 

“The flexibility of hybrid working and location agnostic strategies has opened up a large number of opportunities, both for employees and employers. The adoption and cultural acceptance of this multi-channel approach to talent is diametrically different to even 10 years ago,” he adds. 

Perhaps the biggest challenge for firms looking to implement blended workforce strategies is determining which worker type is most appropriate for individual roles and functions. 

Here, it is important to put in place formal processes around budget allocation and workforce planning. Successful practitioners are more likely than non-leaders to have formalised processes around skills mapping (52% vs 30%), resource planning (43% vs 30%) and departmental hiring (40% vs 26%), according to the research.

Change management

The success of a blended workforce is also contingent upon ensuring that technology and processes are integrated effectively between in-house, external and service providers, with 42% of respondents in the research citing this as a challenge. 

This change management is crucial when preparing for and executing a change in service model, says Salkowski. “Getting your processes and data ready when moving from an internal to external environment can be an issue. When you’re working with a partner, it’s important to think about the quality of your data, how that information is organised, process journeys and how you plan to map that information across,” he says.

“It’s not uncommon for organisations to underestimate the level of effort required to extract this information from the business, so this can often be a delay to successfully implementing a blended workforce model,” Salkowski adds. 

Ultimately, success comes down to effective change management. As with all business transformation projects, it is vital to communicate effectively with your people about the reasons, processes and expected outcomes of implementing a blended workforce. 

“When you’re talking about changing ways of working and challenging assumptions, change management should always be at the top of your list. It’s the old mantra that you prepare for change, execute it and reinforce it – then do it again. That’s true when it comes to blended workforces,” says Salkowski. 

A blended workforce can unlock many benefits for organisations, from skills augmentation and operational effectiveness to wider cultural gains around employee experience and wellbeing.

However, as with any business change, it needs the right processes, structures and feedback loops in place to unlock its true potential.