Creating Talent Diaspora – Is this the new Resourcing Paradigm!

This is not an article about recruitment.  It is about how to use people more effectively in a business – particularly in unique business conditions. Many see radical changes ahead for the workplace and those in it! Some see it as a new Industrial Revolution – the Revolution of the Individual.

1          Introduction

2          The Office of National Statistics  – the best place to go for the information.

3          Are we all now Gigworkers?

4          Organisational Design and Development and Talent Management

5          The Major Stakeholders – Government, Businesses, Individuals, Resourcing Consultancies, Unions, HMRC,

6          Foot Note

7          A Suggested Solution to the IR35 issue

8          Summing Up

“A social revolution has been set in motion, and business must join in”

This is what Jean-Marc Ollagnier, European Head of Accenture had to say at a recent FT online Conversation. www.ft.com/partnercontent/accenture/a-social-revolution-has-been-set-in-motion-and-business-must-join-in.html

Introduction

What we’ve got is a unique confluence of rising unemployment – furloughed employees coming back to work – others drifting back to the office amidst much debate and mixed emotions.  All this needs to be seen against the background of unquantified and tighter business conditions.  There will be a mix of changed and changing business models, triggered by changing markets, distorted business volumes, corporate shortages of money – and orders – with nearly all businesses – and all  compounded by new – some invasive –  technologies and new and strengthening ESG sentiments.

This new business climate will drive new thinking about people and approaches to changing employment and engagement models.

Creating your own Talent Diaspora can be seen as a strong development of what Talent Management Teams have been doing for years but, ideally – now – on a collaborative base. Present and imminent business conditions mean that there will now be mismatches – could be temporary – between the people you’ve got and the people you need – issues around immediacy, professional fit, accountability and value for money arise.

The Office of National Statistics  – the best place to go for the information.

At the heart of this are the latest ONS Employment statistics –  See section 2.  Yes – the stats referred to here in this article are technically accurate – but not quite what they seem.

But when you are running a business in a radically changed and changing business landscape, it has to be good practice to seek to use ALL the talents available – whoever they are; whatever they are; wherever they come from and when you want/need them – and, maybe, in much changed and different practical ways and within radically changed contractual arrangements than hitherto.

These will be triggering reorganisations and redundancies. Reconstructions and turnarounds also call for hard decisions.  But there are options – such as making half a person redundant! Organisational Design and Development professionals need to find balanced solutions involving these new options. Not far behind are Talent Management teams waiting to find out what their new remits are.

The aim is to separate out purely Full-time Employees and treat everyone else as something different.  In this exercise this FTE figure comes out as 57%.

Understanding this 43% is one of the difficulties – difficulties in understanding the size, the terminology, the definitions and the constant change and variability in virtually all aspects of this phenomenon.  In fact, they are Atypical workers, Part-timers, Self-employed, Contractors, Freelancers, Interim Managers, Temps, Consultants (Independent or nearly so), Management Consultants, Semi-retired people, Portfolio Workers, Off-payroll workers, those who work through PSCs (Personal Service Companies), full-time workers increasingly doing jobs on the side category.  Some see themselves as (working) Consultants and some see themselves as unemployed and this might vary from month to month. Additionally, many move around within these categories and on and off permanent payrolls. Faced with this, it seems sensible to refer to them as Gigworkers.  Why not? What else would work better? The feature they all have in common is that they are NOT dependent on one employer for all their time.  They need to fall back on their own efforts and energies.

NOTES

• The ONS collect these monthly figures from a Panel of about 30k to 40k households and returns are self-certified and based on responders’ interpretations.
• Additionally, the ONS have explained the Covid-driven difficulties in achieving representative samples on this basis.
• The figures for part-time workers – particularly permanent – call for special consideration as to interpretation, content and positioning.
• ONS issue these figures as soon as they deem practicable after the reporting date but frequently revise their figures as and when new information becomes available. These amends mean that, when referring back, you often don’t find the exact figure.  However, the differences have been rarely material.

This is an area of great change; full of paradox, complexity, definition issues, semantics and all constantly variable and interacting continuously.  Now, Covid, ESG and Brexit in the UK have added significantly to this process of change.

Information from Office of National Statistics.

Go to their section called EMP01 – the monthly employment statistics – and this is what you’ll find – November 2020 being the latest available figures at the time of writing – 8.2.21.

Are we all now Gigworkers?

What probably started as a sideways plug for atypical working seems to have morphed into an invitation to consider the emerging and broad sweep of people-centric workplace arrangements.

But, it’s a great question! It depends on what you mean by Gigworkers, what you mean by ALL and what you mean by NOW!

How people now spend their working lives is a mix of what they want to do or choose to do but, more often, as a matter of what others want them to do – failing which they do whatever they can – or do nothing.  In the coming months, opting for independent working will emerge, for many as a last resort option.  But, handled effectively, it could also emerge as a successful career move and an excellent solution to clients’ challenges.

Organisational Design and Development and Talent Management

OD and Talent Management is and has been a long-term hot topic with HR Directors and progressive Boards – and is now moving centre stage in a hurry. What is seen by some as a new Industrial Revolution – the Revolution of the Individual – is arriving any minute now.  This is a confluence of rising unemployment – furloughed employees coming back to work – lots of others drifting back to the office and all against the background of tighter business conditions – reflecting corporate shortage of money and orders – due mainly to their customers’ shortage of money and orders. Alongside this, changing employment and engagement models and technology are all interacting to add to the complexities of running businesses.

Up to now, Organisational Design and Development has been driven by the needs of the business.  From now on, this process is likely to be highly influenced by people.

The Major Stakeholders – probably in this order

Businesses – Government – Individuals – Resourcing Consultancies – Unions – HMRC.

Businesses

Business is the prime driver of new working models. For those who see this market in a holistic way, serious benefits exist.  Being able to match specific needs with specific resourcing solutions when needed is the ideal – a sort of just-in-time management philosophy. This is vital for today’s 24/7 working, flexibility and efficiency.  But it must be crucial to have a balance. Not always achieved, particularly in periods of major change.  There is, of course, nothing new in this.  But it does seem to be top priority in the business climate we are now accelerating into.

In this new Resourcing Paradigm, these are some of the things that businesses should be looking for:-

• Redundancy does not have to be seen as an In/Out single Event – unless the total role has gone and the employee cannot reasonably be deployed elsewhere on equal terms. Those leaving under restructuring programmes don’t all want to find roles mirroring the one they’ve just left. Some want to do their own thing. Few know how.
• If there is some partial need, deals can be done which turn the employee into a conditional part-timer or even an independent contractor.  Legal and tax implications need to be taken into account. Re-engaging former employees on a freelance basis is a small but resident feature within many organisational resourcing programmes. Getting it right and doing more of it is good for business. It also enables the executive in question to develop work from other sources – on the basis that the former employees see themselves as wanting to do this as opposed to looking for another permanent job.
• Many senior people adopting an independent working lifestyle discover a new career– and are grateful for the opportunity.
• In many cases, local – and wider communities are beneficiaries of newly fledged independent workers. A worthy inclusion in corporate CSR programmes
• Endowing your own senior people with many of these entrepreneurial characteristics is good for them – good for the organisation and good for the community. It should also be good for those still with you – those who run businesses are increasingly looking for results-driven mentalities in their people.
• Employees with an employer mindset and strong Independent Enterprise behaviours are valuable – and often thought of as new thinking. If you expect your senior people to behave like this, they will respond positively – knowing how to is important.
• Good leavers are worth keeping in touch with– whatever they are doing – it’s a variation on the Alumni concept – successfully adopted by many professional organisations.
• Modern thinking includes collaborative working. This includes organisations of all shapes and sizes and individuals.

Those retiring under normal conditions don’t all want to go on lots of holidays and look after the grandchildren. Their skills and energies and some aspirations are still there – but their salaries are gone. Their pensions may not be enough. Their ambitions will not have disappeared entirely.

Government

Like the EU, Government seems to want every worker to be on the permanent payroll – measured, controlled, taxed and protected. Classic definition of “a job”.  Observing their sometimes uncertain handling of “the self-employed” community in this pandemic, Government seems to regard the handling of this 43% more as an irritation as opposed to a key part of the UK’s flexible and entrepreneurial workforce. They should recognise just how extensive atypical working actually is.

Individuals

For some time, Individuals have been moving centre-stage in the workplace, driven by what they want to do, are entitled to do – indeed, need to do in the light of new pressures and challenges.  But there are also opportunities.  Whatever their employment status, we are beginning to see the growing importance of the individual.  Covid has accelerated this thinking process for many. Working from home all the time was the favourite option for the future for many in the early months of Covid but recognising the need to personal interactions and, particularly for the more senior executives, anxious NOT to be forgotten about or side-lined in the internal politics has modified many views!

Resourcing Consultancies

Internal Talent Management Teams do – and have always – worked with external Search and Recruitment firms. What can emerge as a difficulty is where the Search firms conclude that what is, in fact, happening is that their client is simply sourcing names for their own database.  What needs to happen is that a formal joint operation with greater transparency should be established with sensible protections, ownership and fee structure rules.  Opportunities for genuine collaborative work exist here.

Unions

After a few years of decreasing membership, the last three years have seen Union membership increase.  What is important Is that their traditional mission of preventing abuse is clearly needed more now than ever. There will be abuse.  Unions need to play a leading role in helping their members acquire new skills and recognise the importance of adapting to new working models.

HMRC

The Statutory task of HMRC is to collect tax due as and when due. Those who complain are those who finish up paying tax!  HMRC do a good job and under challenging circumstances. But many still think that HMRC and the Government see Gigworkers  as tax dodgers. Again, a complex area.

The Government plans to introduce much discussed legislation this Spring relating to the taxation at source of independent contract workers by their client business.  (IR35 legislation). The logic is that many independent workers are, in fact, disguised employees. The employing company would decide on their tax status under this proposed legislation. In short. They are perceived as tax dodgers.

This is, of course, quite right – unless these workers are genuinely independent businesses – and most are. Over the coming months there will be a lot more of them as availability of work falls short of the growing number of available workers – whether they are genuine independent workers looking for work or anyone looking for a job.

Government should understand this area much better and recognise that this is a large, growing and legitimate part of the business landscape.

A Suggested Solution to the IR35 issue

One viable and, maybe, timely answer to this tax and worker status is for the government to create a new type of limited company. Any independent worker may set one up.  Additional rules would apply to these companies – namely – they are forbidden to pay dividends; they file quarterly reports – similar to the VAT system – and making payments on account of fee income charged and with a settling up made at their year-end. If and when wound up, any surplus would be deemed to be income of the Directors at the time of winding up – and subjected to tax deduction as part of the winding up.

IR35 was set up to prevent tax abuse. No-one can really say if it has done that.  But it has caused much waste of time, effort and some money.  Needlessly.

Summing Up

The promotion of independent working, in its broader sense, calls for the dissemination of more information, more ambition, more excitement.  Expose abuse – but celebrate successes.  More noise is needed – particularly as many people in the UK workforce will be finding themselves needing more options to consider as part of personal transition processes over the coming months.

“A social revolution has been set in motion, and business must join in”

This is what Jean-Marc Ollagnier, European Head of Accenture had to say at a recent FT online Conversation.

www.ft.com/partnercontent/accenture/a-social-revolution-has-been-set-in-motion-and-business-must-join-in.html

Views like this don’t come any more succinct, progressive and, it should be said, useful from anywhere else!  Reacting to this – for many businesses – will call for collaborative action in creating their own Talent Diaspora to support their growth in a changing world.

About Working Free

Working Free is a specialist career advisory business supporting senior Director-level executives coming off the permanent payroll into an independent working lifestyle. Working primarily with people-centric businesses, Working Free offers an additional, a supplementary and an enlightened support to traditional outplacement services.