The world of work is changing. The new face of the American workforce and an increasing portion of the international workforce is more independent, engaged and better able to deliver results, services, and products than the traditional monolithic corporation.
To get a better understanding of this shift, Field Nation conducted a comprehensive analysis of the three areas that have combined to form the nexus of this new reality of work: the shift away from traditional employment and towards contract expertise, the disruption of work as we used to know it, and the new engaged workforce.
Last week, we discussed the “Outsourcing Appetizer” as the first shift that contributed to the changing workforce dynamic by whetting the appetite of the enterprise for expertise at market rates.
- Read Part 1: The Outsourcing Appetizer
Chapter One: The Shift
The Second Shift: the Organization – Individual Inversion
The second shift we identified was the evolution of engaging with an external organization that was trusted to have access to the desired expertise, to engaging directly with that expertise and using the organization only as a means of facilitating those transactions.
Although subtle, this shift proved to have profound significance in that it represented an inversion of the organization-individual hierarchy. As was traditionally the case, enterprises used to contact and contract organizations that had good reputations for service, execution and expertise; now, the desire to engage directly with those individuals with whom they had an established relationship took precedent. As a result, organizations increasingly took on the role of agents that provided access to highly effective experts.
The inversion of this relationship turned out to be the proverbial writing on the wall for these organizations whose only value-add was a database and talent. Early pioneers in the space became adept at finding individual expertise and assembling ad-hoc teams that were needed for specific projects. With the business practice and process structure emplaced by the PMOs, as well as the increasing ability to engage the specific individuals, enterprises were able to drive out the costs associated with fee margins that overseas talent shops were adding to their cost structures and rate cards.
Similarly, as enterprises became more adept at assembling and managing bespoke talent teams, they were able to easily scale their bid and RFP frameworks down to individuals rather than just big companies. This empowered organizations to further engage with individual experts and bypass larger consulting organizations.
The outsourcing experiments that of the late 1990s and early 2000s were largely successful from a cost and convenience standpoint: despite some public PR disasters that shed light on the challenges associated with managing offshore talent and contracting, the savings were substantial. More businesses across the world traded the higher cost (and, admittedly, the simplicity) of the Master Service Agreements (MSA) for the lower cost and better results of an “elastic expertise” model. If organizations proved willing and able to take on a more active role in managing bespoke teams of project experts, then there was substantial cost savings and quality boosts to be had.
Coming Up: We discuss the third factor that has contributed to the shift in the American workforce by addressing how the evolution of communication and collaboration technology brought the offshore outsourcing model home.