17 Nov 2020

High skills freelance economy surges as digital talent platforms help build new on-demand workforce.

Researchers at Harvard Business School’s Project on Managing the Future of Work and BCG’s Henderson Institute find that 90% of companies surveyed see a future competitive advantage in shifting their talent model to a blend of full-time and freelance employees. With a surge taking place in remote work due to Covid-19, the move to an on-demand workforce is expected to accelerate.
ShareBar

BOSTON, November 17, 2020—Researchers from Harvard Business School’s Managing the Future of Work Project and Boston Consulting Group’s Henderson Institute today released “Building the On-Demand Workforce,” which explores the recent rise of digital talent platforms and how they are creating a new marketplace for high-skill freelance work. Companies who are early adopters of these platforms see a competitive advantage in shifting their workforce model to a blend of full-time and freelance employees, while at the same time, millions of highly skilled professionals, who seek flexible and remote work, are using these platforms to connect with employers.

Researchers from BCG and HBS’ Project on Managing the Future of Work surveyed nearly 700 senior business leaders at US companies. The goal of the survey was to better understand the pervasiveness and patterns in use of new talent platforms. The report is based on information from this groundbreaking survey as well as in-depth interviews with representatives from the talent platforms themselves and the companies that use them.

“Our research showed that many leadership teams have not yet fully grasped the strategic significance of these talent platforms. They are more than a stopgap, they are a means for resolving the chronic problems companies face while filling their talent needs. Business leaders cannot risk missing a critical opportunity to build a more flexible, resilient organization,” said Joseph Fuller, professor of management practice and a cochair of the Project on Managing the Future of Work at Harvard Business School.

Transforming the Workforce Transforms the Work

Due to rapid automation, digital transformation, and demographic change, companies are increasingly struggling to find people with the skills they need when they need them. A growing ecosystem of more than 300 talent platforms has emerged that offer companies on-demand access to highly skilled workers. These high skill platforms -- companies like Catalant, InnoCentive, Kaggle, Toptal, and Upwork -- can be grouped roughly into three categories: marketplaces for premium talent, digital freelancing marketplaces, and crowdsourcing innovation platforms.

The COVID-19 crisis has underscored the need for companies to be more nimble in reacting to changes, managing fixed costs, and managing the work itself, lending even more importance to the fact that users of platforms report increased speed to market, productivity, and ability to innovate.

Now Is the Time to Get Strategic

The survey shows that an increasing number of managers have been experimenting with these new talent platforms, but to bring about change on the scale needed to innovate new business models, the study underlines that companies will have to get strategic and appoint a C-suite leader to explore how talent platforms can unlock new sources of value.

“New models should not simply be used to outsource what was previously done in house; instead, they should prompt companies to fundamentally reconsider what their core business model can look like in a talent-fluid future,” said Allison Bailey, a managing director and senior partner at BCG.

The report, along with an executive summary with key findings can be downloaded here.

Contacts

Harvard Business School:
Kate Brannen
Kate.Brannen@edelman.com
+1 202 766 5672

Boston Consulting Group:
Eric Gregoire
Gregoire.Eric@bcg.com
+1 617 850 3783

ABOUT THE HBS MANAGING THE FUTURE OF WORK PROJECT
Harvard Business School’s Project on Managing the Future of Work pursues research that business and policy leaders can put into action to navigate the complex, fast-changing nature of work. The Project’s current research areas focus on the manyforces that are redefining the nature of work in the United States as well as in many other advanced and emerging economies: Technology trends like automation and artificial intelligence; Contingent workforces and the gig economy; Workforce demographics and the “care economy”; The middle-skills gap and worker investments; Global talent access and utilization; Spatial tensions between leading urban centers and rural areas.

ABOUT THE BCG HENDERSON INSTITUTE:
The BCG Henderson Institute is Boston Consulting Group’s strategy think tank, dedicated to exploring and developing valuable new insights from business, technology and science by embracing the powerful technology of ideas. The Institute engages leaders in provocative discussion and experimentation to expand the boundaries of business theory and practice and to translate innovative ideas from within and beyond business. For more ideas and inspiration from the Institute, please visit bcghendersoninstitute.com.

ABOUT HARVARD BUSINESS SCHOOL
Founded in 1908 as part of Harvard University, Harvard Business School is located on a 40-acre campus in Boston. Its faculty of more than 200 offers full-time programs leading to the MBA and doctoral degrees, as well as more than 70 open enrollment Executive Education programs and 55 custom programs, and Harvard Business School Online, the School’s digital learning platform. For more than a century, HBS faculty have drawn on their research, their experience in working with organizations worldwide, and their passion for teaching to educate leaders who make a difference in the world, shaping the practice of business and entrepreneurship around the globe.