Orchestrating Workforce Ecosystems

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As the nature of work and the workforce continues to evolve rapidly, organizations must adapt their management practices to effectively orchestrate a complex ecosystem of internal and external contributors. A recent report by MIT Sloan Management Review and Deloitte offers practical strategies for managing this multifaceted effort, highlighting the importance of aligning workforce approach with business strategy and closely coordinating cross-functional management of internal and external workers.

The COVID-19 pandemic has brought about unprecedented changes in the workforce, from shifting worker preferences to the changing nature of work. In light of these shifts, many organizations are grappling with the challenges of managing a workforce ecosystem that extends beyond organizational boundaries. A recent report by MIT Sloan Management Review, explores the concept of orchestrating workforce ecosystems and outlines strategies for effectively managing this complex and multifaceted effort.

At the heart of this report is the notion that managing a workforce ecosystem involves more than just hiring and retaining full-time employees. Today’s workforce is made up of a broad range of interdependent workers, including freelancers, gig workers, long-term contractors, third parties, and professional services organizations. As such, effectively managing a workforce ecosystem requires integration among many business functions and a new way of thinking about the workforce.

One of the key challenges of managing a workforce ecosystem is the need to closely coordinate the cross-functional management of internal and external workers. This requires a fundamental shift in basic management practices around how organizations access, engage, and develop workers.

Swiss global healthcare company Novartis is beginning to take a more deliberate approach to managing external workers as it increases its dependence on them. “In the last 12 to 18 months, we’ve focused on managing the external workforce more intentionally,” says Markus Graf, the company’s vice president, HR, and global head of talent. “If you ask me how I see things evolving, we will manage our external workforce even more actively, not only to attract labor but also for access to skills that we may not have enough of internally. It’s becoming even more important in tech-related work, where skilled talent is less inclined to join a traditional workforce.”

For mature legacy organizations, like Novartis, this may involve changing deeply entrenched management practices and adapting to a changing workforce where there is less control over contributors.

Another challenge is the need to align the workforce approach with business strategy. Organizations must ensure that their workforce strategy aligns with their overall business goals and objectives. This involves understanding how to allocate work for internal and external contributors and supporting managers seeking to hire external workers.

The report also highlights the importance of leadership in effectively transforming a workforce ecosystem. Leaders must understand how to allocate work for internal and external contributors, and they must be able to adapt to cultural issues around diversity, equity, and inclusion. Furthermore, leaders must be able to effectively communicate the importance of workforce ecosystem management to their teams and ensure that everyone is aligned with the organization’s goals.

Organizations that are most successful in rebuilding and managing their workforce ecosystems tend to have five common characteristics. These organizations closely coordinate cross-functional management of internal and external workers, hire and engage the talent they need, support managers seeking to hire external workers, have leadership that understands how to allocate work for internal and external contributors and align their workforce approach with their business strategy.

As the workforce continues to evolve, managing a workforce ecosystem will become increasingly important for organizations. The key to success will be the ability to adapt to changing workforce dynamics and effectively manage a diverse range of contributors. Organizations that are able to do so will be well-positioned to thrive in the years ahead.