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The Fragmenting Workforce – flexible friend or foe?
Belinda Johnson - Worklab
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Starting Place – Charles Handy’s Shamrock
Professional Core
ProfessionalsCore
Self-employedProfessionals
Contingent Workforce
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Some other interpretations of the Shamrock..
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Fragmenting Workforce - The Extended Enterprise
collaborations
outsourced front-line & support
services
consultants
micro-entrepreneurs & on-line /crowd
workers
apprentices / trainees
temps / contractors/’sub-contractors (CIS),
Interims, etc.full-time, part-time & fixed-
term employees
Degree of user organisation patronage
Degree of statepatronage
outcomes-based tasks
Roles
The Fragmenting Workforce
42% of the UK workforce already works outside the concept of full-time,
‘permanent’ employment
Source: ONS – Labour Market Statistics - Sept 2013
Full-TimeAgency Temps Freelancers SOW Outsourced Offshored
-60%
-40%
-20%
0%
20%
40%
60%
80%
32%
43%
24%
58%
46%49%
-25%-21%
-40%
-10% -10% -10%
Source: Staffing Industry Analysts European Contingent Buyers Survey 2013
Proportion of companies using more or less
European hiring intentions next 2 years?
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Part-time working
Currently running at 27% of UK workforce – plateauing after recent rises.
Most significant movement is the increase in the number who are working part-time because they cannot find full-time work: 10% in 2008 – now 18.4%.
Source: ONS – Labour Market statistics Sept 2013
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Apprenticeship starts and framework achievements by level
Source: Skills Funding Council - Further Education & Skills: Learner Participation, Outcomesand Level of Highest Qualification Held(June 2013 – updated Sept 2013)
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Interest in working on a contingent basis is rising 1.6 million ‘temps’ in the UK – 6.5% of working population
4.2m self-employed, of which c.1.7m are ‘self-employed’ freelancers
The rise of ‘I-pros’ (study commissioned by PCG)
The rise in (European) I-pro numbers between 2000 and 2011 was +82%
Between 2008 and 2011 there was growth of 12.5% which was driven by four countries; Germany, France, Poland and the UK
In same time period, UK achieved double the European growth level – UK I-pros = 19% European total
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Interest in working on a contingent basis is rising
PAYE: front-line operations
PAYE: operational support
Day rate: Under £500 per day
Day rate: over £500 per day
Average of all the categories
0% 20% 40% 60% 80% 100%
I choose to work on a temp/contract/interim basis
Additionally: • 46% of employed workers considered a freelance role when last
looking for work• 48% will consider it when looking next time
Source: Randstad World of Work Report 2011/12
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Interest in working on a contingent basis is rising
“The world of work has changed…The intelligent individual is in control of
his or her own market, while the rest still require patronage.”
Andreas GhoshPersonnel and Development Director for London Borough of
Lewisham (and Policy Lead for Workforce Strategy at the Public Sector People Managers’ Association)
Source: Randstad’s Navigator Report 2012
Recruitment industry’s known share of activity
Agency
300k
Direct into Hirer (or Other)
1,250k
All Temporary 1,550k
Temporary (ONS: Q1 2013)
Self Employed (ONS: Q3 2012)
All I-pros 1,734k?
Sole Ltd 168
k
Agency 47k
Run Bus/ Prof
Practice 234k
Partner Bus/Prof Practice
398k
Sub contractor 408k
Freelance 479k
The recruitment industry’s unknown market shareSome uncertainty around where certain worker types, in sizeable numbers, are classified within ONS data.
Construction Industry Scheme (CIS)
797k Self-employed – March 2013.
Number of CIS workers – ONS uncertain: “Depends on how they classify themselves and/or how they are classified by those that engage them.”
Umbrella workers
ONS is currently looking into this area to determine:
How large the pool of employed temporary workers is. Where they are currently being classified. Whether any potential misclassification is cause for concern (based on
the size of the pool).
The recruitment industry’s potential market share
Immediately identifiable supply through recruitment agencies/businesses equates
to less than 2% of the UK workforce…but we know it is considerably more.
And what could it be?
RIB Turnover Growth & UK Job Vacancy Growth
Source: RIB (www.rib-index.com), ONS
Who else is involved in sourcing & managing the fragmented workforce ?
Recruitment Intermediaries (MSPs/RPOs) Talent pooling
The ‘Service Provider’ community. Employed temporary workers
Intermediaries driving alternative resourcing models. Agency sourced but directly engaged temps
Online work platforms Crowd working
Around a quarter of employers Flexible hours working
Where from and where to for managed programmes?
Managed Services (MSPs/RPOs)
Regional GlobalVaried Skill categories All categories
Fundamental technology Advanced VMS
Selected industries All industries
Outsourced Workforce Solutions
IC & SOW – deliverables management
Inclusion within RPO / RPO
Alternative contingent labour resourcing
modelsComplete enterprise-
wide workforce visibility
Major Milestones
Creation of first contingent labour programme
1990s
Technology Expansion
2004 Globalisation
Vendor Neutral
2008
Today
Extended Scope Flexible sourcing models
Source: SIA presentation – Ciett Global Workforce Conference 2012
Current and next steps focus
Source: Staffing Industry Analysts European Contingent Buyers Survey 2013
Which of the following are in place in your organisation?
Another pressing need - the application process is broken..
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40% had an existing relationship with the
company prior to applying, either as a
customer, advocate or with family/friends
already at the company
20% admit to being an actual customers of
the organisation
they applied to
74% say they would share a
positive with their inner circle - 61%
would share a negative one
27% say they would share a positive CE on
social channels – 16% would share a negative one Source: UK CandEs 2012 –
www.thecandes.org.
one third of those surveyed admitted
to receiving no response at all to an
application
Talent pooling begins to treats candidates in a similar fashion to customers
Time is being invested in drawing candidates into talent pools & puddles, and in nurturing them for potential future opportunities.
Growth of talent pools being fuelled by internal referral mechanisms.
Theory: as a candidate, once within the talent pools of your target organisations, you should never have to apply (or be put forward) for a job again.
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The Service Provider community Companies who provide payroll, accountancy and
administrative support and advice for the professional freelance workforce.
A number of have also embraced the potential of providing employed temporary workers – know as Umbrella workers: Concept accelerated with the implementation of the Agency
Worker Regulations (AWR) in 2011. Estimated number of ‘umbrella’ workers – c.150,000 -200,000.
An industry/opportunity to watch – precedent set in the US for it to morph into a professional service of high esteem: US has an established and highly regarded Payrolling and
Independent Contractor Evaluation / Compliance industry. UK has a dedicated trade association determined to set a
benchmark to enable the industry to evolve in a similar fashion. A service that, increasingly, both workers and hirers
appear to need.
Intermediaries promoting alternative resourcing models Barclays – PAYE temps sourced by agencies but directly
engaged since 2009.
PWC’s STAFFflow scheme:
Running for around 18 months
Used by around 30 NHS Trusts
Removes the requirement to pay the 20% VAT that would have been payable on the salaries of temporary agency staff by allowing trusts to employ them directly.
STAFFlow margin achieved out of saving (Source: Recruiter Magazine)
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On-line working
“We’ve passed into a new economic era, presenting businesses and individuals with mounting challenges. Work marketplaces based on social platforms – ‘placeforms’ – fill a new societal need.”
Stowe Boyd
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The potential for on-line working in the UK has many drivers
Underemployment: “People in work wanting more work increased by 1million since
2008” - ONS Over 3 million people - 1 in 10 workers - want/need more work
One of the key drivers for the introduction for Real Time Information (RTI) is to capture multiple income streams
2000
2002
2004
2006
2008
2010
2012
024
Number of under-employed workers
in Britain (m)
Want more hours in current job (2.33m)Want re-plcement job with more hours (0.46m)Want an addi-tional job (0.27m)
76%
9%
15%
Interest in crowd labour / on-line work is rising
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Crowd workers Nearly 60% of all crowd workers live in North America and Europe. Almost 50% have a bachelor degree. The number of crowd workers is growing in excess of 100% a year. Crowd members work at least once a month; about half work as
often as once a day. Nearly 77% of all workers have a primary job.
Crowd Providers $1bn industry in 2012 (Staffing Industry Analysts)
Forecast to be $1.6bn in 2013 Projected to be a $5bn industry by 2018
Elance – UK is #2 in volume of task posted and #5 in number of crowd workers
Source: Massolution 2012
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UK – a top 10 country for both hiring and working
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oDesk started in technology but is rapidly branching out
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The top 10 on-line jobs UK businesses hire for Q2 2013 Top Categories (by dollars spent):
1. Web programming 2. Web design 3. SEO (search engine optimization) 4. Mobile apps 5. Desktop applications 6. Graphic design 7. Blog & article writing 8. Ecommerce 9. Web research 10. Data Entry
UK businesses have posted 344K+ jobs
to date
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What skills are driving growth of online hiring by UK clients? Fastest-Growing Categories (based on 2-yr CAGR of
gross services)
1. Technical support 2. Accounting 3. Email response handling 4. Game development 5. PR - Public relations 6. Advertising 7. Presentations 8. Copywriting 9. Web research 10. Illustration
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Top skills of UK freelancers
Q2 2013 Top Categories: (by dollars earned)
1. Web programming 2. Website content 3. Blog & article writing 4. Translation 5. Technical support 6. Mobile apps 7. Web design 8. Copywriting 9. Graphic design 10. Software Project
Management
Fastest-Growing Categories: (2yr CGGR of Gross Services)
1. Sales & lead generation 2. Copywriting 3. Software QA 4. Mobile apps 5. SEM - Search engine
marketing 6. Translation 7. Technical writing 8. DBA - Database
administration 9. Business plans &
marketing strategy 10. Website content
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Rising volumes of flexible hours engagement models
Means of Engagement specified
2011 2012 Increase 2011/201
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H1 2013 (to end June)
Pro-rata increase 2012/201
3Flexible Working 128,881 190,013 47% 112,628 19%
Flexible Hours 43,892 105,784 141% 72,628 37%
Hours to Suit 10,952 20,491 87% 13,848 35%
Hours as Required
3,804 5,996 58% 3,732 24%
Variable Hours 953 2,361 148% 954 (17%)
Zero Hours contract
942 1,691 80% 1,017 20%
Total number of opportunities offering flexible working patterns
189,424
326,336
72%
204,807
26%
Set into context of all the job vacancy types advertised, as captured by the ONS, (Av. 519k during H1 2013), opportunities offering flexible working hours patterns constitute 6.6% of the work currently being offered in the UK.
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Back to the Starting Place – Charles Handy’s Shamrock Implications for the organisation.
Implications for the individual.
Implications for policy makers:
“This rethinking of organisations will force the rethinking of retirement, unemployment insurance, healthcare, employment taxes and social security, to name but a few. Organisations will step out of the role of providing these benefits to permanent employees and something needs to step into the void.
“..how we might need to adapt in order to not just survive, but thrive.”
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The implications of further workforce fragmentation for the recruitment industry
The use of intermediaries will rise: To help realise the potential of such fragmentation. To manage compliance.
The range of commercial models will diversify: Introductory fee models for temporary labour –
rather than on-going margin. Payment upon outcomes – shift towards ‘Statement
of Work’, apprenticeships, on-line working, etc.. Compliance has an increasing and, potentially,
standalone value
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The implications of further workforce fragmentation for the recruitment industry Legacy processes will need to be modified to enable
engagement – throughout the entire lifecycle - with a diversifying range of worker types:
How/where you raise awareness How you address the levels of transparency
demanded by each group How you hold a seamless dialogue across their
chosen range of media The levels of personal contact versus automated
communications that suit the profile of each worker community
How you business accommodates a shift towards payment upon outcomes
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The implications of further workforce fragmentation for the recruitment industry
The opportunities – beyond transactional temporary, contract, interim and permanent recruitment – are considerable. They could also, potentially, be more lucrative.
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Contacts
Belinda Johnsonowner - worklab
e: [email protected]: @worklabinsightsm: 07771 534365
www.work-lab.co.uk