How Applying an Ecosystem Approach Can Spur Contingent Workforce Innovation

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There are numerous factors — time crunches, budget restrictions, fewer candidates, serious competition for talent, among others — that have led many procurement professionals to view non-employee workers as just another resource delivered through a supply chain. Both buyers and suppliers of work contract with each other for specified outputs, with projects and cash moving in a transactional manner.

While this can keep work on track and costs contained, such an approach leaves little room for innovation — a competitive necessity in today’s digital economy. Today’s contingent labor marketplace requires the incorporation of new technologies and strategies to find top talent. If companies are participating from yesterday’s perspective, they quickly find themselves separated from a larger pool of candidates, trailing behind their competitors. The answer to this disconnect is to reconceive contingent workforce programs as contingent workforce ecosystems.

Defining Digital Ecosystems

“An ecosystem is a network of companies, individual contributors, institutions and customers that interact to create mutual value,” according to the Boston Consulting Group. The ecosystem concept suggests a system of interacting subsystems that, when subject to varying conditions, can reorganize and evolve into a newer version of the ecosystem that has successfully adapted to change. This facilitates conditions where communication and innovation are paired.

Most people encounter digital ecosystems through the platforms they use in their daily lives. Whether through a smartphone or other internet-connected devices, consumers, whether of information or goods and services, interact with digital ecosystems through platform owners. Prominent platform owners today include Apple, Google, and Amazon.

What has made each of these firms ubiquitous is that they’ve become keystones in ecosystems of complementary products and services. While these platform owners provide the technical infrastructure — whether operating systems, devices or digital exchanges — they also form mutually beneficial economic relationships with their complementors in the broader ecosystem that add to the value impact, thereby increasing user relationship value (see the first blog in this series for more detail). This increases the potential for innovation and new value-creation network effects.

Innovation rarely springs up in a vacuum — it happens when conditions support it. Creating an environment that has the potential to foster innovation is exactly what an ecosystem does.

The Contingent Workforce Ecosystem

Just as these platform owners and their surrounding ecosystems have radically changed the consumer world, the rapidly changing world of non-employee labor is giving contingent workforce managers the ability to establish contingent workforce ecosystems.

In the consumer-oriented digital ecosystem, platform owners such as Apple and Google serve as the orchestrator of the ecosystem. They offer the technical infrastructure of the platform from which other complementary providers can expand. Beyond the orchestrator, there are also multiple subsystems of complementary actors, such as supplier, customer and partner ecosystems.

Now consider the parallels in a contingent workforce ecosystem. Here, the available channels for talent — the supporting subsystems — have changed significantly in recent years. The rising prevalence of statement of work (SOW) engagements and the explosive growth of the gig economy, for example, are creating new talent sourcing challenges for contingent workforce managers — and offering innovation opportunities. Finding effective ways to use this complex and growing contingent workforce supply chain requires contingent workforce managers to engage talent through multiple channels.

Executing a multichannel approach, however, is challenging. Because of technological and broader economic forces, talent channels are continuously evolving. Contingent workforce managers often struggle to keep up through no fault of their own.

Within the ecosystem paradigm, it is not the manager’s role to be the source of innovation in the labor and services supply chains. Rather, they must establish and nurture the conditions that allow innovation to happen.

Finding an Orchestrator

To catalyze innovation within a contingent workforce ecosystem, there must be an ecosystem keystone and orchestrator.

Many parties can fill this role. One to consider is a forward-looking, innovative managed service provider (MSP) that has embraced this approach and demonstrated success. Such an MSP could potentially orchestrate access to the many sources and channels of work, from traditional staffing suppliers to project-focused SOW engagements and specialized gig economy talent.

As new worker types and suppliers continue to emerge, engaging an MSP that is an expert in the workforce management field can help contingent workforce managers access a dynamic contingent workforce ecosystem.These MSPs have established strategic systems to integrate their client needs, relationships with traditional and digital suppliers, and overall knowledge of the market so they can adjust client programs as needs change.

So how exactly can contingent workforce managers tap an MSP to facilitate innovation with a multichannel approach? Stay tuned for Part 3 of this series to find out.

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Voices (2)

  1. Terri Gallagher:

    We have been using this approach and model (trademarked) for the past year to support our clients. Execution is key and many of the bigger MSP providers will need to revise legacy operational models to adapt and actually execute on this approach. Fluidity is key and that is a challenge for some of the bigger providers.

  2. Raz Brar:

    How to bring the theory to reality ? I mean how to get accurate and reliable reports ?

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