2023 HR and Talent Predictions: What About the “Other” Half of the Workforce

As a turbulent 2022 ends, the business world receives an annual procession of predictions about what will shape the human resources (HR) and talent landscape in the coming year. These predictions provide a valuable service for those of us on the people side of business. That said, we are leaving out a significant segment – up to 50% – of those people if we don’t include the extended workforce in our 2023 planning.

As we have previously shared, the extended workforce comprises up to half of an average company’s workforce. In the U.S. alone, one in five, or 33 million, workers contribute their skills and expertise to businesses as members of the extended workforce.

While contingent workers come with varying requirements in terms of cost, compliance and engagement relative to the full-time employee (FTE) workforce, the sheer size of spend on this segment warrants steps that ensure businesses are optimizing their return on investment (ROI) and taking care of the human aspects of the extended workforce. 

 

Six Predictions and Their Applications in the Extended Workforce

 

To illustrate how businesses like yours can incorporate extended workforces into next year’s predictions and trends, let’s look at “meta-trends” curated by Brian Heger in his useful 2023 Talent Trends Cheat Sheet:

  • Employee Experience – Deloitte’s broad definition of workforce experience is useful in this category; it allows considerations beyond FTE-only experiences at work: “the sum of a human’s lived experiences at work and how they feel about their organization.” As we have identified in our recent contingent workforce pulse report, the gap in expectations and experience between non-employee and FTE regarding working conditions is closing. 
  • Diversity, Equity and Inclusion – Despite an increased focus on diversity, equity, inclusion and belonging (DEI&B) over the past few years, there is still much to be done to improve the lived experiences of people from all backgrounds in all workforce segments. Businesses need to ensure that their investments in DEI&B go beyond the numbers and FTEs to create space for, draw upon and reward the valuable contributions from diverse populations in all workforce segments.  
  • Remote and Hybrid Work – Much of the extended workforce makes their contributions remotely or with infrequent in-office activities. As businesses continue to struggle with their remote or hybrid strategies, the extended workforce offers many valuable lessons regarding new directions in connection, engagement, productivity and accountability. 
  • Health and Wellbeing – In addition to the human impact, there is a growing body of evidence that suggests wellbeing and mental health issues create serious drags on productivity and financial results. While your business may not offer health and wellbeing programs to extended workers, the way in which managers engage your non-employees and how they interact with your teams can have a tremendous impact on their state of being and their ability to contribute to your business.   
  • Compensation and Pay – As reported in our contingent workforce pulse report, organizations that focus on non-pay factors such as meaningful work, DEI&B, schedule flexibility and more will remain competitive in pursuit of highly sought-after skills and talent among non-employee workers. Pay rate will always be top-of-mind for this segment of the workforce, but in the current economic environment, organizations have an opportunity to influence non-employee worker engagement further by focusing on other factors as well.  
  • Upskilling, Reskilling and Skills – Skills gaps and skills-based organizations have dominated a lot of the trends in workforce planning and organizational development over the past few years. These are set to continue. The steady growth of the non-employee workforces and the faster-cycle, “fractionalized” work architecture associated with extended workforce programs, make them a promising catalyst for the transition to skills-based organizations. 

 

The size and contributions of the extended workforce can be a differentiator for your business as customers and workforce experiences converge to dramatically shape your company’s brand. Once relegated to second-class or “contingent” status, the extended workforce will continue to be an growing pillar of enterprise talent strategies in 2023. 

What steps are your organization taking to ensure you optimize the investment in the extended workforce and provide a truly compelling human experience for all workers?  

For more information on how you can optimize your investments in the extended workforce, contact us.

Jeff Mike

Jeff Mike

Head of Insights and Impact, Flextrack

Jeff Mike works closely with HR, Procurement and IT leaders to design extended workforce ecosystems that fuel and future-proof enterprise talent strategies. Jeff brings over 15 years of experience leading HR functions, along with five years leading global HR- and workforce-related research, to combine the best thought leadership, business practices, and platform technology into purpose-built solutions.

Jeff Mike
Jeff.Mike@flextrackservices.com