Open Talent Economy

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= "What the open source model did for software development, the open talent economy is doing for work".


Description

Jeff Schwartz, Andrew Liakopoulos et al. :

"The classical employment model—vertically integrated companies hiring full-time employees to work eight- to nine-hour shifts—has given way to a new approach: the open talent economy—a collaborative, transparent, technology-enabled, rapid-cycle way of doing business through networks and ecosystems. The problem for many business, talent, and HR leaders is that they are operating as if the classical “balance sheet” model of talent is still dominant and relevant. It’s not.

Today’s evolving workforce is a portfolio of full-time employees, contract and freelance talent, and, increasingly, talent with no formal ties to a company at all. People move from role to role and across organizational boundaries more freely than ever. Global markets and products are driven by accelerating innovation and growing scale, and they demand talent pools and systems that can be rapidly assembled and reconfigured. Business leaders and customers expect agility, scale, and the right skills on demand. These new business and talent models look less like integrated factories and companies and more like highly orchestrated networks and ecosystems with a multitude of approaches to mobilizing, orchestrating, and engaging talent, skills, leaders, and ideas.

What the open source model did for software development, the open talent economy is doing for work. Today’s younger, connected, globally mobile people are managing their careers on their own terms. Where their parents may have sought job security, they prize engagement and meaning. This means that organizations must reinvent their sense of what they have to offer talent and even what it means to “have” talent in the first place.

In “Reframing the Talent Agenda,” we concluded by saying, “The new [talent] agenda will recognize that corporate boundaries are not the end of the talent management challenge. They are a departure point for influencing, enticing, and integrating talents of freelance, third-party, and open source talent ecosystems from almost anywhere by building new networks and ways of working.”1 This article outlines a new way of thinking about talent that looks at talent strategies across organizational boundaries: in the company, the extended enterprise, and beyond the enterprise.

We recognize that we are in the early years of the open talent economy. Some parts of the landscape are clear; others are still being defined. Like early mapmakers, we recognize that we are creating an early version of a new reality, and we hope to provide a useful and engaging view of the next phase of talent strategy and management."

Typology

Jeff Schwartz, Andrew Liakopoulos et al. :

"The open talent economy includes a growing number of categories of talent that are being integrated to produce goods and services:

  • Balance sheet talent: Balance sheet talent is talent employed directly by a company, typically full-time, and often with the expectation that career opportunities will be available that keep employees substantially within the company. This is the traditional view of corporate and organizational work. Because balance sheet talent is the most traditional talent category, it is expected to represent the fastest-declining proportion of all talent arrangements in the future. Most HR and talent executives and teams are focused almost exclusively on balance sheet talent.
  • Partnership talent: When companies collaborate, venture, and license to increase their business reach and capabilities, employees often find themselves effectively employed by two or more companies that operate as part of joint ventures or as entities with multiple investors. This creates a category of talent that finds itself straddling the talent cultures, programs, and strategies of collaborating companies. This is an important category of talent in emerging and growth markets due to the combination of statutory and regulatory requirements limiting foreign ownership and the attractiveness of joint ventures for accessing local markets, factories, capabilities, and talent. Many HR and talent organizations have historically had an arm’s-length relationship with talent in joint ventures, leaving these employees in a no-man’s land that lacks clear linkages to any one joint venture partner’s talent programs, employer brand, and culture.
  • Borrowed talent: Borrowed talent is talent contracted through another organization, often through an outsourcing or contracting arrangement (either locally or globally, as in an offshore outsourcing contract). These contracted or “borrowed” services can range in scope from support (for example, cleaning and maintenance) to outsourced functions such as finance, HR, customer support call centers, and contract manufacturing. Generally, these relationships are managed by procurement and operations teams with low levels of input and support from HR and talent teams.
  • Freelance talent: One of the fastest-growing segments of the talent economy consists of individuals who work independently but substantially as part of larger company networks and teams. Freelance talent is typically role- and position-based and involves individuals providing capabilities and skills to augment or complete teams on an independent, ad hoc, or adjunct basis. Often, this can entail providing temporary assistance to fill a position or role or to complement a project team. Freelance talent is also used to manage variable demand for roles or positions: for example, when adding a section of a course at a university or staffing additional temporary shifts at retail stores during holiday shopping seasons. Freelance talent often works on site and on project teams alongside balance sheet talent."

(http://dupress.com/articles/the-open-talent-economy/)


Discussion

What is Open Source Talent ?

Jeff Schwartz, Andrew Liakopoulos et al. :

"In recent years, a totally new way of working has become possible. This can be seen in the advent of a range of new business models with a new set of players and a new language. There are three emerging models of open source talent that are central to understanding this evolving landscape:

Volunteer-based models: Examples of volunteer-based open source talent models include Wikipedia, an online encyclopedia written and updated by 100,000 volunteer contributors. It currently includes 26 million articles in 286 languages.

Crowdsourcing idea marketplaces: Among the best known of the crowdsourcing idea marketplaces is InnoCentive, a site that posts challenges for researchers, inventors, and problem solvers around the world. Crowd work and project marketplaces: Crowd work and project marketplaces are composed of a growing set of business models and websites that distribute and manage small components of projects (and sometime entire projects or subprojects) to be done remotely. Work can be done by the piece, project, or hour. One example is Mechanical Turk." (http://dupress.com/articles/the-open-talent-economy/)


FROM THE EMPLOYEE LIFE CYCLE TO THE Open Talent Ecosystem

Jeff Schwartz, Andrew Liakopoulos et al. :

"Traditionally, HR, talent, and business executives think of talent and employee processes as a supply chain with an on ramp for new employees and an off ramp for retirees. In between, they work for a company in its own offices, campuses, or factories. The process starts with “acquisition” and continues through deployment, learning and development, performance management, rewards, and career planning.

All this is different in the open talent economy, where the life cycle—supply chain—view of talent is giving way to an ecosystem view that requires a fresh perspective on the foundation or scaffolding on which to build and manage talent networks. The starting point is to reimagine both what work needs to be done and who can do it; in essence, the process begins with an expansive view of work design and workforce planning. While the concept of the employee life cycle may continue as the underpinning for balance sheet talent, for other categories of talent, business and HR leaders may need a new set of principles directed more toward navigating and managing talent ecosystems.


Consider the evolution of five core processes from the old “life cycle” to the new “ecosystem” model, and how they are changing in the open talent economy:

From “plan and acquire” to “design, brand, attract, and access.”

In the open talent economy, the central question is how to use all forms of talent, work, and business models to access and attract the talent you need to do the work you need done. This way of thinking goes beyond the concept of the “extended enterprise” to a view that reimagines the business and function, what and how work gets done, and who can possibly do it. Whether it’s the Apple app store or the P&G Connect and Develop strategy, talent models in the open talent economy consciously reach across corporate boundaries to create ecosystems and ways of doing business that rely on and partner with talent almost anywhere.

A crucial first step for managing talent in the open talent economy is to connect talent leaders with the business executives designing businesses and business models so that they can develop new ways of working that take advantage of the range of current talent models. A second step is to brand and position the business and talent ecosystem in ways that can attract the best talent and engage them to participate, whether that talent resides within or outside the enterprise. While companies will continue to focus on acquisition for the portion of critical talent that remains on their balance sheet, the new approach to talent, as the examples discussed above suggest, moves beyond ways to acquire to ways to attract and access different pools of talent.

The open source economy presents new challenges to workforce planning as well. The historical model was focused on filling capability requirements by hiring people, full- or part-time, to work for the company as employees, with the accompanying expectations of an organizational livelihood and career. In contrast, the future challenge is focused on workforces (yes, plural). The emerging challenge is to plan and design work around, and to access, workforces of all types—on the balance sheet, in joint ventures, borrowed, freelance, and open source.


From “training and deployment” to “participation, learning, and leadership networks.”

In a business environment evolving as quickly as it is today, companies are recognizing the value of moving from command-and-control training and deployment approaches to new models built around projects and networks. Project-based companies are an increasing feature of the business landscape, and projects—as opposed to processes and assembly lines—play the central role in many types of work. In a world of continually changing project portfolios, the demand moves from outfitting and deploying employees to creating learning, leadership, and work networks that become the backbone of work structure and employee development.

As an increasing percentage of talent and work moves off the balance sheet, one can see the growing relevance of new learning models. In a world where half of US employees might be independent workers and half of the R&D at leading companies is done outside corporate labs, individuals will have a growing need and incentive to be up to date on leading ideas, approaches, and tools. Lifelong skill development will increasingly be the responsibility of the individual; off-balance-sheet employees will need an off-balance-sheet corporate university. In this connection, an important development is the advent of massive open online courses (MOOCs) from consortia such as EDx and Coursera, as well as new learning models like the instruction offered by the Khan Academy. The value of a certificate of completion from the Stanford MOOC on artificial intelligence or machine learning becomes clearer in an environment where individuals need to both keep their skills up to date and find new ways of communicating their capabilities and credentials. (http://dupress.com/articles/the-open-talent-economy/)


From “performance management” to “performance engagement.”

How to measure and gauge how well employees are doing when they might work for you, near you, for someone else, or on their own will challenge the current thinking and approaches to performance management. Companies will need new measures, new processes, and new expectations for what success looks like on all sides of the employer-worker relationship. Performance management is a battle between two models: competitive assessment (sorting and ranking) and coaching and development. Companies are still struggling to understand performance for balance sheet employees and find the appropriate mix of assessment and coaching. As the workforce extends to third-party organizations, individuals, and the human cloud of ideas and effort, performance management will face the challenge of evolving to measure engagement, development, quality, interest, access, and output. This will likely involve a combination of the familiar focus on worker assessment and coaching with new measures of network characteristics such as influence, attraction, and engagement. Perhaps the future of performance management will look more like reviews of books on Amazon.com—with professionals and workers sharing their “ratings” (how many “stars” are on your online profile)—than like the closed, linear performance management systems we are familiar with today.

From “compensation and benefits” to “experience and rewards.”

The historical focus of total rewards programs has been on grading and sorting employees and managers into bands while designing compensation structures and benefits schemes that generally prioritize health and retirement benefits. Again, the near-exclusive focus has been on compensation, benefits, and rewards for a company’s own employees—those on its balance sheet. There are at least two emerging challenges for total rewards programs in the open talent economy. The first is to keep pace with the rapidly changing expectations of full-time employees across all the generations in the workforce, from veterans and boomers to millennials. The people companies keep on their balance sheets are looking for an unprecedented level of flexibility.30 This is often most true for the critical skill sets companies are most interested in hiring and retaining. At the same time, employees are looking for community involvement, social responsibility, and a higher level of meaning and engagement in their work.

The second challenge for total rewards is to begin the complex process of creating rewards, meaning, and careers for employees who are not on a company’s balance sheet. One of the areas in which new approaches and innovation are needed is how companies can compensate, reward, and create career options for workers in all segments of their talent portfolio. This might involve creating tiers or categories of freelance employees with different levels of access to projects, work opportunities, and corporate learning and development programs (both online and in person). Additionally, as is already done by network marketing organizations, compensation for off-balance-sheet workers might involve different levels of rewards for different levels and types of participation. (http://dupress.com/articles/the-open-talent-economy/)


From “company employee value proposition” to “ecosystem talent brand.”

As companies deliberately design and build talent networks that incorporate on- and off-balance-sheet workers, freelance workers, and open source talent, the corporate brand and employee value proposition will need to be reengineered with an eye to attracting and engaging multiple sources of talent. Similar to the dynamics of the leading media producers and directors who attract the top entertainment talent, talent ecosystems will compete on their brands as well as on their talent platforms. How a company’s talent ecosystem reaches out to different pools of talent, and what the company offers in terms of work, collaborative environments, engagement, and rewards, will become part of its “beyond the balance sheet” talent strategy.


These five core reimagined talent life cycle processes are the start of a new framework for planning and managing talent across the open talent economy. There are other issues as well, including how to measure, anticipate, and manage risks; there have been some highly publicized cases in recent years where employees working for third-party companies to make and assemble products have created reputational risks and related expectations and liabilities. Managing talent risk in the open talent economy will require proactively considering risks associated with all types of talent, including off-balance-sheet talent. In addition, new challenges will arise with respect to systems and reporting, both for managing talent and employee processes and for maintaining collaborative platforms to support crowd work and network-based projects." (http://dupress.com/articles/the-open-talent-economy/)

More Information

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