2022 State of Independence In America Deep Dive:
Why These Data Points Matter To Your Business
December 1, 2022, Thursday | 2:00 - 3:00 PM ET
Content
Featured Speakers
Moderator:
McLean Robbins, Vice President of Marketing, MBO Partners
Featured Speakers:
Miles Everson, CEO, MBO Partners
Audra Nichols, Chief Operating Officer, MBO Partners
Bob Lucas, Chief Revenue Officer, MBO Partners
In a recent panel discussion, MBO leaders discussed key data from the newly-released State of Independence in America, now in its 12th year, as well as why this data matters in the context of changing market forces and macro workforce trends.
Key insights were also shared from recent MBO primary research on the use of contingent labor by enterprise organizations, the growth of the independent workforce, and how these data points can prove impactful to your 2023 strategy and planning from a strategic, operational, and tactical perspective.
Everson, Nichols, Lucas, and Robbins discussed the following topics:
- Key data from the State of Independence in America 2022
- Macro workforce trends to consider and why they matter now more than ever
- Actionable insights and tools to prepare for 2023 success
[00:00:18] McLean Robbins: Looks like we are ticking up here. Hi, everybody, welcome to today's session. We are, I'm watching the numbers come in here, so we are live, and we will get started in. Let's just give it about a minute and a half for people to join today. Already we look like we are leveling off, so let's go ahead and get started. Bob? [00:00:48]
[00:00:49] Bob Lucas: Well, good morning, good afternoon, everyone. Thank you for joining. Welcome to joining the 2022 State of Independence in America: Why These Data Points Matter To Your Business. This is our 12th year of our research on independence in America, and what we thought we'd do instead of just starting with the data, we actually want to start with some of the broader macro trends in the workforce today. And I'm going to start with a bit of introductions, who's on our webinar today. So if we can move to the introductions, McLean? We have Miles Everson our Chief Executive Officer (CEO), McLean Robbins, who you just heard, our VP of Marketing, and she'll come back to you later on with some of the data points in our State of Independence report. Audra Nichols, our Chief Operating Officer. And I'm Bob Lucas, for most of you who don't know me, I'm our Chief Revenue Officer (CRO) at MBO Partners. I think what I'd like to do at this point is just for the folks who are new to MBO, give you a few brief bullets on who MBO is, and Emily, if you can advance the slides, please. MBO is nearly three decades old, and what we do is, we are a two-sided platform that provides access for enterprises and talent to work together compliant. Our mission is to give people the control to do the work they love, the way they want, which leads us into our State of Independence data. So we started nearly thirty years ago. As a business who supported the independent workforce, it's in our DNA. So understanding what makes those individuals tick, why they do what they do, and how satisfied they are, is going to be key to what we do every day here at MBO. So some of the numbers behind MBO partners, and how big we are, if you may Emily, please. We've helped over 700 enterprise organizations engage with their independence. As I said, nearly three decades we, at any one time we'll have over 5,500 independence actively, billing and currently, we're on track at a little under a billion dollars in annual spend on the platform. So before I kick it off to Miles Everson, CEO. Miles, you started noticing some of the macro trends that we're going to talk about a decade ago you were running a large global consulting firm, and some of these trends, as you identified a decade ago, have only increased through the decade, and we'll talk a little bit about that, and I guess I missed a little bit about today's webinar and my apologies. Mclean, if you'll give some of the housekeeping, and then i'll kick it officially over to Miles. [00:03:47]
[00:03:48] McLean Robbins: That's fine. I'll chime in whatever. You guys are all gonna ask, will I ever get a recording? It's our number 1 question, always. Yes, we will send it out, it probably will be ready on Wednesday of next week, but as soon as it's ready you'll get an email and you'll be able to view the video and a transcript of this call. You can certainly ask questions throughout the webinar and we encourage you to do so. Please use the Q&A feature and we will get to them. We have ample time for questions at the end, and then we'll pop some links into the chat, but if you'd like to learn more about any of the data referenced today in the researcher reports, we'll link to that. You can also visit our website, MBOPartners.com/insights for copies of all the research, and we encourage you to follow us on our Linkedin channel and our Linkedin weekly newsletter, The Great Realization. So no more further ado will pop into the meat of the presentation. [00:04:39]
[00:04:42] Bob Lucas: Now I'll kick it over to our CEO, Miles Everson. Miles? [00:04:46]
[00:04:46] Miles Everson: Excellent, thanks Bob. And good afternoon, good day to everybody that’s with us. We appreciate you taking time for us to join us. We’re quite excited about what we’re seeing, in terms of our primary research in the State of Independence. As Bob had mentioned, it was about a decade ago when I first started detecting some of the long term trends that I felt we are going to shape the future of business operating models, and frankly, but is now becoming societal norms. I'm going to touch on these briefly. I could talk for a long time on them, but I won't today. But the first is that everyone knows changes are happening, and that it's constant. But what's really important about this is that the rate of change is accelerating, and as change accelerates, you get more and more innovations at a faster rate, and where you see demonstrable change on society is when innovations converge. [00:05:41]
[00:05:42] Miles Everson: So AI by itself means very little, mobility by itself means very little, bandwidth on communication networks means very little on itself. But when you combine the three you get demonstrable change, you gotta put it in perspective. It was only 2008 when we had the introduction of a smartphone, and now today you can't operate your life basically without a smartphone in your pocket. So things have changed significantly, and the rate of change as you apply it directly to talent increasingly because of these innovations and a couple of other reasons, I'll get to in a moment. Remote work was becoming more common, but it was because of the innovations. But when COVID happened, COVID accelerated the adoption of the innovations, like virtual communications, asynchronous communications, so it accelerated remote work, which is now commonplace. Look, we all know that remote work, as we've known it through the COVID pandemic will likely be a bit different post, but it will never be the way it was before. There's clearly a change in the way people work, and there is a high correlation between remote work, and people being talented, choosing to work as independent professionals, instead of working for a single company, so that there's a high correlation there. So, as you think about going forward, I don't think it's a news bulletin to anybody on this call, but you will have a larger percentage of your workforce working as independence. We'll get into the data on that, as we go through this discussion. [00:07:20]
[00:07:21] Miles Everson: The second trend that has been around for some time is that knowledge flows are key to growth companies. What I mean by knowledge flows is in the industrial era, you could make money by having a knowledge stock protecting that very tightly and trading it in binary transactions. Today, the most demonstrable changes are being generated through the sharing of knowledge and getting more and more people to contribute to that. So think of open source technology, the innovations and the drug and the medical field, the pharmaceuticals. A lot of that is coming through many, many people contributing and building on it. So, the old one mind is not as good as two, and two is not as good as four, and ten it continues to build. This is particularly important in a world where we're operating today where talent is scarce. Despite all the automation AI, and everything else we've talked about. We have a talent scarcity issue on this planet, not in excess of talent. [00:08:20]
[00:08:21] Miles Everson: And so the third item is the fractionalization of everything, and it's changing markets. And when I say fractionalization of everything, every asset class is getting fractionalized, whether it's your home on an Airbnb, whether it's a car, whether it's your home and mortgage back securities, and what's happening with independence and companies like MBO is where we're helping to fractionalize every company's most valuable assets, which is it's people resources. So people can work for multiple companies, they can be experts deep in a field and operate the way they want. [00:08:58]
[00:08:58] Miles Everson: So let's talk about the human capital scarcity issue. There's two key points here, and so the first one is human growth in the United States. Our population growth is the lowest. It's been one hundred years. Direct your attention to the lower right hand side of this chart, so you can see, since 1990, it's been precipitously falling with a significant drop in new population growth occurring in about 2012. What all this is saying is that the top of the funnel for the American worker the size of that funnel is narrowing. So I got a narrowing population of new people coming into the workforce because we're now into this about twenty years. Okay. So new entrance coming in, and you combine that with another fact that's happened in the US workforce, which is in 1980, two-thirds of private companies workers had a defined benefit plan. Today, it's less than ten, which leads me to, you know, corporate America broke the promise that said, come and work for my company, and I'll take care of you forever. Well, what's happening is that's causes us to see a current staff that's here, which is for every open job in the United States, there's only one unemployed person. We have more job openings than we have people to fill in, and a lot of that is because people are choosing not to work as full time employees. [00:10:30]
[00:10:31] Miles Everson: So, having a strategy that allows you to access these people is really critical, which leads me back to the next point, which I just commented on about the pension plans. It's not just the theory that I just talked about. It's reality, because we're seeing that today that the job tenure of the American employee is as low as it's ever been. It's only 4.1 years and then, if you look at people under 35, it's only 2.7 years, I mean, who really has a full time permanent workforce anymore. When you look at that kind of turnover, that turnover is significant. And so this all ties to the point I was making a moment ago about the fractionalization of everything. [00:11:18]
[00:11:19] Miles Everson: One of the things that's being fractionalized is trust of central authorities. So that's a bigger societal change that's happening, which is people don't trust central authorities, which is why they're moving to be independent. So Audra, why don't you talk about the free agent data we're seeing here? [00:11:37]
[00:11:38] Audra Nichols: Yeah, I think this is some pretty interesting data, and it ties into what you just said. But if you look at the survey right, 47% of the workers are free agents or neutral, and that speaks to that point around loyalty, right? It's a whole different mindset. In terms of what we're thinking around the relationship between a corporate job and the worker, and then at the bottom, if you look at the number of co-workers who are considering quitting their jobs, that's 40%, the bottom may or may not. They probably will quit, and they definitely will go. So first of all, people are thinking ahead right, which I think is a trend if you were to ask years ago. Is somebody thinking about what they're gonna do for six months from now, But they know that they have options, right? They know that I might have an opportunity to be better on my own as we'll talk about through here, healthier, happy, or wealthier, all that kind of stuff. And so, it's no longer as scary of a proposition as it once was, and in many realms it's an expected thought process, and we're starting to see that in the data. [00:12:42]
[00:12:45] McLean Robbins: I think this is from our State of Independence, by the way, in case people are asking, and we surveyed in July, for those wondering how current this data is. Obviously the economy has gotten increasingly uncertain, but this is fresh as of this summer. [00:12:59]
[00:13:01] Miles Everson: Yeah, thanks. So if we looked at other data, and this is data that's coming from the U.S. Census Bureau, what you can see here, on the right hand side, that kind of great piece of a chart is new business applications by people that are indicating they are going to be solo entrepreneurs, i.e. people that are independents, that want to start their own business and run it. And if you go back to like 2018-2019, pre pandemic. Those new business applications have increased to 2X every quarter, so it's demonstrably higher. And this is why I believe what we're seeing in America is a mind shift about people choosing to be more of an independent mindset, not just as temporary work it's where they find their trust. It's where they find their friendships. They're independent thinking, and they're doing it because they can. You can do research. You have all the access you want, and if you look on the left hand side here, i'm not going to read all these bullets, but the rise of independent work relative to the traditional full time employment is just symptomatic of this bigger trend that I'm talking about about the independent thinking of people in America. [00:14:15]
[00:14:17] Audra Nichols: Yeah Miles, I’ll just add to that. When you look at the rise of independent work, and what we just saw on the prior side, like I personally know a number of folks, who have got very successful careers in corporate, so to speak, who have made the decision to go independent, and you know the three things that that they consistently share with me? Are - I want control over my time in my life. I need the flexibility. I've given a lot of my time, and I know the skills that I have, and how marketable they are, and I want some level of diversity in terms of the type of work that I'm doing, because i'm capable of doing that, and I know the reward will then be mine, based on that. [00:14:56]
[00:14:57] Miles Everson: Right, and look, the barriers to entry to going into business for yourself have never been lower. It's very easy to go into business for yourself now. So let's go ahead and take a look at the FTE composition here. [00:15:11]
[00:15:15] Bob Lucas: Yeah, Miles. This information is from a contingent labor report, and for those of you on the phone who are part of your contingent label program or adjacent to it. These numbers aren't shocking. For those of you who may not be part of your contingent labor program. Today in the enterprises, in the U.S., nearly one in three workers at an enterprise is contingent and growing in the next five years. That's anticipated to grow to 36%. So as we talked about these trends, this isn't something new, where enterprises are now looking to leverage contingent workers because of flexibility because of costs, things of that nature. This has been going on for the past few decades, actually, and we're at a point now where five years from now, we're going to be almost reaching. 40% of workers are not going to be full time in the enterprise. [00:16:11]
[00:16:13] Miles Everson: And that’s when you look at where the growth is coming from, the total work size of the workforce is not growing. Okay, so that this change is double digit growth of the workforce that the total population of the workforce is not growing nearly as fast. [00:16:29]
[00:16:32] McLean Robbins: So let's dive into the state of independence data here. So we are so excited on this report came out yesterday. It is our 12th annual look at the independent workforce. So we are the longest running deepest dive into the American independent workforce. I know this is hotly anticipated data from our clients, but also media and the Government use us as the source of truth for what's happening with independence in America, and the number one thing I'm really excited to share today is that we have passed a milestone that we thought we wouldn't hit until 2025. So today, 50% of the American workforce is, or has been independent at some point in their careers. And so, you know, I would love to know by way of a quick question, comment, or chat. You know how many of you guys, even if you're on the Enterprise side, or you're somebody in the media who's here today. You know, has tried independent work, and maybe just say yes, and then what you have done. We'd be very interested just by show of a little engagement here to know what you're doing. We are at 64.6 million Americans, which is the largest of any year of the study, and up nearly 27% year over year. Emily, you want to move to the next one. [00:17:47]
[00:17:49] McLean Robbins: Let's take a little bit of a look into this population, and why this population matters? As I said, 64.6 million people, that's a huge number, but what's really even more exciting to me is that this number has really accelerated greatly post pandemic, and since 2019. So up 57% since 2019. What that's really showing is that a lot of those forces Miles was talking about, those Macro forces, really are contributing to people saying it's easier than ever to be independent. Maybe I was laid off during the pandemic, and I want that financial control of spreading my risk across multiple clients. Or maybe I took some time out of the workforce to care for an aging parent or care for somebody who needed it, and I realized I could have better work, life, balance, and maybe even make more money as an independent professional. [00:18:41]
[00:18:42] McLean Robbins: So our full time, independence. Some things that are unique this year is that our full time independence are up 27%, and these are people who work regularly every week, more than twenty hours a week. And so what does that mean for the enterprises on the call today? It means your population of available talent has gone up rapidly in the past year, and we'll talk a little bit about what that talent looks like in a minute. But that's huge. The other population that's grown in a really noticeable way is what we call the occasional independent. And while we don't measure the kind of work that these occasional independents do, that number is up 34% year over year to 31.9 million. And this is consistently since we began tracking this type of work: people who work regularly, but not a set number of hours per week, and maybe not even every week. These are your side hustlers, so to speak. This numbers up hugely as well, and we largely see these people taking independent work on, because it's fulfilling a passion, but increasingly in this economy, it's because these people need extra money, and many of these people are, you know. Yeah, they can drive for Uber or Lyft, or they could do a DoorDash delivery, but there's a lot of high skilled people in this population, too, who are willing to take on a project they're just not committing to do it full time. So that's really exciting and, you know, I'm hopeful that by show up of chat, we see some people here who are doing independent work as well. But what's the crux of this year's data? These people are happier. They're healthier. They are more financially secure than ever before. And so what this shows us, and what really just gets me super excited about this is that these people, they really want to be independent, and they want to stay this way. Because, hey, if you felt healthier, happier and you were making more money doing something, why wouldn't you do it too? It's like going to be a commercial for us all to quit our jobs by the end of this, sorry Miles. And so you know the the other thing that's really great is that even in a down economy, 66% of these people say they feel more secure than working a traditional job, and with all the layoffs that we've seen coming in recently, we can certainly say that this is true, but the interesting stat that's not on the screen here is that about little bit more than 30% of full time employees actually think that independence is more secure as well, and that's really interesting, because that's ticking up. So we're seeing both sides of the equation recognize independence, and we're also seeing the number that plan to build a bigger business. So not just stay independent, but maybe get other independence on their team or hire them as employees go up to. Unless, there's anything else on this that you guys want to chime in on, I'm gonna move right along. [00:21:21]
[00:21:22] McLean Robbins: And just say that, as we said, 57% increase since 2019. But the pandemic, broadly, is the forcing function for this massive acceleration in independent work interest. So we see this year 60% of people saying that COVID made it more likely that they were going to go independent. We also see that there are some reasons why they had economic concerns. That security is up post COVID, and then there is still a need for schedule flexibility. But on the left hand side of the screen. What's really quite unique here is that we'd always seen people say, Oh, I'm gonna go independent in a couple of years. It's the same population of people. I'm joking, but the population of people said they're going to lose weight at New Years. We know these people are going to try to do it, and some people really do succeed in that health and wellness journey, but many just aspirationally go for it. But that number, since COVID has really ticked up, so we go from like 12% to 14% to about 17% here, and that is really, really exciting, because we see that more people are interested and based on the numbers of people joining. We see that more people than ever before are actually doing it. So again, bigger pool of people. [00:22:33]
[00:22:34] McLean Robbins: So who are these people? This to me, is one of the most exciting things that we're seeing, the mature, so those people who are in their, you know, late 80s-90s they've left the workforce. They left it a little while ago. But this year, for the first time, we see the millennials and the gen Zs have really taken over. They're a full 49% of the independent workforce, and given the size and entrepreneurial nature of this generation of people, they are more likely than any generation before to be independent, and if you meet, or maybe have a Gen Z as a child, definitely, you know these people, really they have no interest in being full time employees, and if they are full time employees, they don't want to do it for the rest of their career. So we know we're gonna see explosive growth here amongst this generation, and that brings up a lot of questions. How do you manage these people? How do you train them? How are their motivations different from other people, but by and large something to keep an eye on. The other thing to really note. Here is this 23% of boomers. Well, they are aging out of the workforce. They're not aging out quite as quickly as you might anticipate, and we were discussing before this call started. You know, with the economy, the way it is. We do think a lot of these people are going to continue to work independently, or pick up part time or occasional work for that income, supplementing for the next couple of years. So what you want to do is certainly not ignore your older workers on the enterprise side. But you want to make sure that you're actively targeting and and considering the fact that a lot of your independent workers may be younger and then, of course, you have the Gen X your core kind of consultant age employees, too. And we still have a large population of those. [00:24:17]
[00:24:19] McLean Robbins: And one of the other things that's really interesting in the data is the amount of people who are providing services to businesses. And so these are people who provide services to enterprise. So the core market of you guys for on the phone today, and that number has ticked up significantly as well, and continued to trend upward year over a year. We're now at fully 8.5 million, largely full time people who were doing this type of work. But as we talked about a little bit earlier, the trend is shifting for people to earn more money than ever before. We've talked about the balance of power shifting to the talent. And Bob, Audra, I'd love for you to comment on what you're seeing, even in rates, but 4.4 million people earning over a hundred thousand dollars a year. That's one in five full time independence. So what this is saying to me is inflation is real. These people can command higher rates, and not only are they doing it, they're getting a lot of money. So, Bob, Audra, are we seeing this amongst our client populations? I think the answer is, yes. [00:25:19]
[00:25:20] Bob Lucas: Yeah, and I think sometimes McLean folks will look at no, they'll hear freelancer, or or you know gig worker, and they might think lower end of the spectrum right? We all know that Uber drivers are considered independent workers. But most folks in the enterprise aren't going to use Uber drivers in the course of their day-to-day business. So if you think of the folks that are actually working for clients of MBO. These are the high pay professionals. These are the folks that are making over one hundred thousand dollars a year, and this is exactly the same growth that we're seeing within our clients. That's making up that 4.4 million folks today, now we're getting thousand dollars or more. Audra, anything? [00:26:03]
[00:26:03] Audra Nichols: Yeah, I want to add to that. I mean, I would just say that I agree. I mean, I think you know, I think that there's more, more awareness around what we're talking about when we talk about independent workers. But in general people think of freelancers, if you think years back and you were running a corporation, you were running an organization, it was kind of like bad work. Why would I do that? I want employees who are loyal, and, as Miles said, corporate America broke that promise, and I think that more and more those high end earners are going to comprise this population because they know what they can. They know what they can do as an independent. [00:26:35]
[00:26:37] McLean Robbins: Absolutely. And let's take a little bit of a look here, pop to the next slide on how these people find their work. So you know, as we said, we're just selling some myths, you know previously. Why would you go independent when you are highly skilled, and you might rather have a full time job. The reality by the data shows that these people today buy at large today, might actually prefer independence. Although, we do see these people cycle in and out of traditional employment. There’s lots of reasons, in particularly a strong economy, why somebody wants to take a full time job, and certainly you know full time employment isn't going anywhere anytime soon. But one of the things that's been extremely interesting in recent years is how these people find work at the high low in all areas of the spectrum. Online talent marketplaces have exploded in growth. You gotta be living under a rock these days to not see them springing up everywhere. But one of the things that's particularly interesting is that this year 41% have talent, have actually used an online marketplace to find work in the past twelve months and about one in three use it as their full or primary way that they find work. So if you're not utilizing an online talent marketplace to find your talent or to manage your talent. A direct, sourcing platform. As we'd like to refer to it. You're missing the boat here, because that's how people are looking for positions. So if you're not out there building a pool of qualified talent and trying to engage them and posting your projects and actively advertising yourself as a client of choice. You're really at risk of not being where the talent are. Bob and Audra, I’m sure you guys want to chime in here. [00:28:12]
[00:25:20] Bob Lucas: Yeah, actually goes back to the first slide where Myles talked about where, you know, he talked about, you know our smartphone now being in our pocket. And you know, years ago that was a super computer. That was billions of dollars. Well, technology is done the same thing relative independent work. It's accelerated the ability for people to actually now become free agents and become their own business, because now it isn't just having to dial eight of your friends to see if they've got any referrals to, you know, for a job. You can simply go on line one of the marketplaces and have a new job this afternoon if you want to. So this is really where we're seeing technology sort of, you know, urging the independent community onto. [00:35:37]
[00:35:38] Audra: Yeah. When I look at it, what's most meaningful to me in this is if you just go 2020 to 2022, right? And you look at the number of folks that use the platform from 27%, 41%, that's a 52% increase in two short years. Right. And just think about it. Think about the way we all work today. Right. We're always multitasking. When was the last time you got a phone call from a doctor? And they're like, Oh, call us back and we'll schedule it. Nobody wants to be picking up the phone and doing it. We're all doing things that we can control by ourselves and we can actually get an end result. And then the other thing that I think about is that cycle time, right, Bob? I mean, years ago you remember like my parents taught me, you get jobs through relationships. So you need to build relationships so that you can get the work that you want. [00:36:19]
[00:36:20] Bob: And promise you wouldn't bring my age up Audra. [00:36:22]
[00:36:22] Audra: I know it's a relationship and now it's like, you know, no, I'm just going to go on here. And in 24 that cycle time, if you're an independent worker in terms of how it affects you in your paycheck as well as if you're an enterprise or anyone who is looking for somebody skilled to work for them that cycle time, I don't know exactly what that number is, but has to be reduced like exponentially in order for you to go from I want to I am. [00:36:48]
[00:36:50] Mclean: Yeah, absolutely. And we are still seeing relationships matter. I mean word of mouth, former employer those things definitely factor in but the most meteoric rise here was the platform. Let's take a look at another trend that's equally interesting here and that's teaming. This is something that we certainly highlight in the report. But for the people here, you know, Miles, when you talk about this a lot, how independent workers are teaming up to deliver larger projects. And Bob, I know you're observing this, the market so less a data slide, although the data is interesting. Can you guys comment on the trend here that you're seeing and how this is actually playing out in real life for our clients? [00:37:25]
[00:37:28] Miles: Yeah. I mean, I'm happy to chime in first, but then you can pick it up. I think that this largely emanated out of teaming squads of people in the technology space. So that's where you can have a defined project with expected outcomes, and you need resources that have specific skills that you may not carry in your full-time workforce, at least not at the level that you need them. And so you form teams and therefore make teams and saying, look, we bring experts together in complementary skills and capabilities and we can deliver a team that's becoming much more frequent in terms of what we're seeing both independents want to do, but also companies need to do because it's human capital scarcity issue that's going on. And this is now compounded, I'll say, with the uncertainty around the recession, are we going to have a recession in 23? If so, how long is it going to be? How bad is it going to be moving towards a variable? More agile workforce is in favor right now. And so what we're saying is the market is right because you can do it. The independents are ready to do it and we can help companies figure out how to form those teams. [00:38:34]
[00:38:36] Bob: Yeah. I go back to statistics that, Miles, we’ve used many times in the past, but this is information that we've gotten from staffing industry analysts that says today there's about $250 billion spent on consulting in the US. There's another $250 billion spent on staffing companies in the US and there's $250 billion spent on SOWs. So if you think about it, these aren't the large consulting firms doing big consulting projects. These are small SOWs that might be two, three, four or five people. It's actually one-third of the entire contingent work that's being done in the U.S. today. Yeah, big number. [00:39:17]
[00:39:19] Mclean: Absolutely. Let's take a move over to the, wrapping this all together. So, you know, we've presented the data. Obviously, if you guys have read the report, please add your questions and we'll happily answer them. But I want to put a little bow on this one and start talking about how does this matter in real life to your enterprise? [00:39:36]
[00:39:38] Bob: Well, I'll jump out and I'll jump on, you know, problem number three, right. You know, I personally have been in the space for a few years and I've seen MSPs actually start back in the late eighties. But what we haven't seen is that the MSPs or the staffing companies advance beyond being a tactical administrative delivery operation for the enterprises. And what our clients are trying to do is reduce that friction and go directly to the talent. Right. Because the MSPs and or the staffing companies no longer have a monopoly on those relationships with the independent workers. So you know what? What we're seeing now is more and more enterprises saying, I'm looking for a new model when it comes to engaging with independents. [00:40:31]
[00:40:34] Miles: Yeah. Look, I'll jump on that first one, which is the talent shortage. There's a human capital scarcity issue, not just in America, but throughout the world. And I think one of the challenges for companies and many are recognizing this, but the workforce is too often viewed too narrowly. And if viewed as, well, my workforce is my full-time employee base, where in fact, you really have to view the workforce as the available workers that can come and produce for me and create enterprise value for the company. And you know, in many respects procurement was responsible for the contingent third-party labor for a long time. Some cultures still really are responsible. But increasingly you're seeing that procurement, H.R., heads of transformation are coming together to say We really need to think of a workforce strategy that allows us to maximize the use of full-time and the use of independence. And so this talent shortage issue is a real problem, and we see an opportunity here to help fill that gap. [00:41:37]
[00:41:39] Audra: Yeah. I'll just add the problem statement. Number two, this is where I spent the majority of my life in terms of growing a business and a large enterprise. And we can't underestimate, kind of like the senior-level view on a variable cost structure. Certainly, when you have a down economy, that's helpful. But whatever the ebbs and flows of the market are, when you have a mix that allows you to bring on the skills that you need at the point you need them for the projects or not. If you're carrying all full-time equivalents as your headcount, you don't have a variable cost structure and you're not. You can't be nearly as nimble. So if you look at it as the talent is the asset here, how this actually affects your PNL and your overall profitability and the flexibility that you have to still deliver to your clients? Well, you have, you find what I'll call it mix, the right mix of your full-time equivalents, your contingent workforce and many businesses. It's what work am I doing offshore in centers. There's actually a type of work that fits into each of those and being able to manage that mix to drive what you need to do from an overall business performance perspective is a very strategic way to look at it. And we tend to if you don't plan for it in advance, right, you're behind the eight ball when you do hit some type of economic downturn. [00:43:03]
[00:43:06] Bob: Yeah. I'll just chime for that last problem statement, Audra. And you talked about transparency. I think what we're seeing today is Miles talked about earlier, where the contingent labor and programs are separate from an overall talent strategy. For the most part, that's being driven by talent acquisition or H.R. And because of that, you've got disparate data sets. So there really is no advanced analytics that says how am I best utilizing all of my talent across my enterprise to drive productivity, to drive the curation of that talent, etc.? So, you know, one of the things that we think we're going to see in 23 is the merging of some of those systems, or at least the integration with some of those systems so that the sea level at the big enterprises can get an overall view of what their skill sets look like from both a contingent and a full-time perspective. [00:44:08]
[00:44:11] Mclean: So let's pop over to some predictions here. I love some good prognostication, don't you? [00:44:16]
[00:44:17] Miles: Absolutely. So I'll go first. This first one is a passion of mine in terms of the way I see the world, which is the balance of power will continue to accelerate towards the worker away from the enterprise. We've been seeing that develop over the last few years. And so any organization that is looking at their workforce strategy really needs to realize that. That's shifting. Who has the power in the relationship between the Independent and the full-time employee in the company? The power shifted to the worker. They have a lot more opportunities, the mobility is much greater. And so companies that realize that and really strive to be the employer of choice, whether it's for full-time or for independence, it's who's going to win. And they need a workforce strategy that optimizes that independent complement to their full-time workforce. [00:45:07]
[00:45:09] Mclean: I'm going to take the second one here, which is a pretty easy one, given what we just talked about, independents continuing to grow. So if we take that 17%, so we go not at the 19% level, but the 17% level, that's another 33 million people who are going to become independent in the next 2 to 3 years. So that's nearly a 100 million people, by my count, that are going to be independent. And that's a huge number. Realistically, we think it's going to be about 60% of Americans who are or have been independent. And that's massive. We can't ignore this amount of people. So enterprises really do need to articulate a strategy that will capture and become a client of choice, not just an enterprise of choice. [00:45:54]
[00:45:56] Audra: Awesome. I'll take the third one and just talk briefly about it. But if you think about the first two things, like Miles and the claim, what you just said, I think the C-suite is beginning to and will more actively drive a defined mix of talent for the business, for agility, reasons, for profitability reasons, for control purposes. And by that mix, I mean there will be, in any business, a number a mix of the number of people that I should have that are FTE full-time equivalents. I know I'm carrying their costs, I've got fully loaded costs, but then where I want to see that with my independent workers, what type of work it is, what type of skills I need, how long they last, how long those projects last. And don't forget, there's a component to like your offshore mix, your centers. When you put those things together, you're driving the financials of the business. And I predict that the C-suite will get far more active in defining that and partner with H.R. and talent acquisition because it's a very strategic equation. [00:46:57]
[00:47:00] Bob: I'll wrap it up just like we saw in the early 2000s. With the advent of mass technology where there were at one point over 60 VMS companies all trying to grab market share. I think we're going to continue to see more and more technology platforms that are engaging the independent with projects across the enterprise. There will be niche players that, you know, special skill sets. So we'll see more of that technology. But I also think that you're going to see some consolidation. So some of the larger players in the market will eat up some of the smaller startups, and this cycle will go on for a few more years. [00:47:42]
[00:47:45] Mclean: Absolutely. Let's move on to our two questions. You know, what do you guys want to know about the data, about the trends? What are you thinking, how it's going to impact your business in 2023? So this is your chance here. [00:47:59]
[00:48:02] Miles: We must. [00:48:03]
[00:48:04] Mclean: Well, we know a lot of quieter people, but I do have a good one for Bob to get started, which is, you know, what are the three things that you think an enterprise leader needs to know from this today? They need to take away and come back to help build their 2023 strategy. [00:48:19]
[00:48:21] Bob: Yeah. I think the last word that you mentioned is strategy. So if you're a leader in your organization, what is your strategy around overall talent in your organization and that, you know, moving forward, you can't treat contingent or look at contingent as something different than your full-time workers because it's almost half the American workforce. So as a strategy, how do you incorporate those individuals into what you need to do over the next 12 months to help your business grow, etc.? So that would be, you know, something that I would impart on folks that are on this call is that you should have an overall talent strategy. [00:49:05]
[00:49:09] Mclean: So where are we? Audra, we got one for you. As an enterprise leader who has done this, who has implemented a program like this at your organization, United Lacks, what are a couple of lessons you learned in your first few years of implementing a talent strategy that you might suggest that people say, okay, I did this so you don't have to. Any lessons learned you want to share? [00:49:30]
[00:49:31] Audra: Yeah, good. Good question. I would say there is a couple, I would say when you're dealing with when you have a vision of what this can do to your business, from like a Chief Operating Officer perspective, that doesn't always translate all the way down to the hiring managers. And don't underestimate the level of change and adoption it is for if you're a hiring manager in a business, they innately if they aren't used to this, they will think of it as very hands-off and like it. It's a competition like these independent workers are choosing where they want to work. And if you don't act and communicate in the right way, you're not going to be the ones to get those skills that you need. So it really did at times feel like a competition and you have to drive adoption in your business and your hiring managers won't innately understand what they mean. That means they see it as a transaction versus a component of shifting your business model in terms of your ability to serve your clients. I would say that that's the biggest. It was actually harder than I thought, right? The amount of effort I had to put into adoption in order to get your folks who are like doing their jobs all day long, every day, and already have enough to do or used to it being a recruiting transaction, that's a big shift. [00:50:46]
[00:50:50] Bob: Miles. I've got one for you if you don't mind. [00:50:51]
[00:50:52] Miles: Fire away. [00:50:52]
[00:50:53] Bob: Yeah. Back when you were building your strategy and you came up with a very distinctive. Here's what we're going to do in the organization. How did you get, you know, the folks under you at that business level to actually buy into that strategy and help become agents of change within your organization? [00:51:15]
[00:51:16] Miles: Yeah. So the first thing I'd say is not everybody will be an agent of change. So you got to pick your teammates pretty carefully. Right. So people that are willing to change and drive a change. But we drove it into how you measure the economics of the performance of their business and their goals. So you got to drive it into what's the resource mix. And for me, I was more focused on what's the mix of the dollars you're spending on human capital and how much of that is spent on independence versus full-time workforce. And are we moving towards having a more agile workforce? Because in the short run, it's kind of easier to go with what I know how to do. I'll just hire another full-time employee. But in the long run, those department set jumped on it fastest. And we're also the ones that were able to grow and adjust the fastest, both in markets and down markets. So it's an agility factor and it's you've got to help the business unit that wants to do it. You got to help them build the muscle memory to be able to use independence better because it's a change management undertaking. [00:52:24]
[00:52:29] Mclean: Excellent. I'm not seeing any more questions trickling in here and but if you guys have them, feel free to pop them in just now. Otherwise, as we noted, we will get this recording out to you early next week. Please do take a look at the state of independents and some of the great, insightful content we have around it. And then we will be back early next year with a brand new report in this series that's going to be about how independents and traditional employees are equally good or which one's better at achieving life goals. So we're really excited to bring you that in January. So thank you so much for your time today. And thanks everybody here on the call for joining. Appreciate it. [00:53:09]
[00:53:09] Audra: Thank you so much, everyone. [00:53:10]
[00:53:11] Bob: Happy holidays. [00:53:11]
[00:53:11] Miles: Thanks, folks. Feedback. Feel free to send it along. So thank you. [00:53:14]
[00:53:15] Mclean: Absolutely. [00:53:15]
RECENT POSTS
CATEGORIES
FOLLOW US
SUBSCRIBE