HR and the Challenge of Agile Talent

In our new book Agile Talent, we describe the strategic and organizational consequences of what we call the rise of Agile Talent. There is no doubt that the dependence of organizations on external expertise is growing.

Deloitte estimates that that 30-40% of FTE’s are what we term agile talent (contractors, gigsters, consultants, and other externals sought for their particular expertise).

Our data suggests an even higher percentage in the future: over 50% of global companies surveyed plan to increase their use of agile talent. As the chart below points out, cost and staffing levels are not the driving factors, although they are certainly key elements. Expertise, innovation, and speed are also of great importance.

 

Why Organizations are Increasing Agile Talent: Top 5 Reasons

  1. Leverage the increased availability of expertise

  2. Reduce cost

  3. Avoid adding permanent headcount

  4. Increase speed of getting things done

  5. Challenge our thinking and assumptions with outside ideas

 

But while organizations depend more on external talent, and more freelancers to assist, not all organizations are evolving in the same way. Our research, suggests three distinct strategies:

 

Three Agile Talent Strategies

1. Traditional

In this approach, leaders of traditionally structured and managed organizations choose to take greater advantage of freelancers and other external talent on an exception basis where their skills are strategically important — a significant majority of work will continue to be performed by full-time permanent employees.

2. Transformational

In this approach, the largest segment of the workforce is contingent, coming together on a project basis and disbanding when the project is completed.

Organizations that depend on virtual organization structures are uncommon but there are a few. Industries such as entertainment, financial services and motion pictures offer a glimpse of the possibilities of how companies will work with the agile talent in the future.

3. Surgical

This third category describes organizations that have chosen to take a more selective approach and focuses its agile talent on complementing and augmenting areas of strategic capability.

Agile talent is applied in this case as a methodology to accelerate capability development or change.

To remain competitive, firms rely on agile talent and other resourcing arrangements to quickly grow capability.

At a recent workshop for the Hong Kong Institute of HR Management we met with over 20 HR executives. These leaders consistently described agile talent as an important trend in organizations generally in Hong Kong and mainland China, and an issue that their organizational leaders have yet to fully explore.

When asked about their organization’s approach to agile talent, we learned something particularly interesting. While 90% described their current staffing strategy as traditional, approximately half believed that their organization was likely to move to a surgical model.

We then asked how ready their organizations were for this shift. Through our survey research and interviewing hundreds of external experts and internal organizational leaders, we’ve found four key factors at the heart of building productive and mutually satisfying agile talent relationships. They are:

Strategic alignment.

Is the organization disciplined and rigorous in identifying areas where agile talent is required or potentially beneficial?

Are external experts used well?

Are they doing work that matters and is important to the organization; moreover, do they feel the work is meaningful?

Is the organization effective at defining the role, relationship and scope of initiatives addressed by agile talent so that both goals and roles are clear? Does the work have the right level of sponsorship?

Are timing, budget and resourcing consistent with what is required for a successful outcome?

And, when scope changes occur, is the work plan and budget revised appropriately so that externals don’t feel taken advantage of or exploited.

Performance alignment.

How well does the organization convert a plan or initiative into well-defined, S.M.A.R.T. objectives and timelines?

Are performance expectations clearly defined, established and communicated so that the accountabilities are clear to both agile talent and the internal colleagues they depend on?

How often is performance assessed and feedback provided? Is the feedback balanced or focused primarily on problems and mistakes?

Does the organization take responsibility for its part, or tend to “dump” on the external. What metrics are used, and are they reasonable?

When performance problems arise, how promptly and effectively does the organization take the required action?

Relationship alignment.

Does the organization consider cultural fit as well as technical expertise in the choice of external talent? Are agile talent thrown into the task or given a solid orientation to the organization and the people with whom they will work?

How promptly and effectively are conflicts resolved? Are externals engaged and involved, kept informed appropriately, and treated with the consideration and respect that any professional would expect?

Or, as the expression goes, are they treated like mushrooms, and kept in the dark?

Administrative alignment.

Is the organization set up to work well with agile talent, or are they treated with suspicion, as a necessary evil?

Does the organization respond bureaucratically in dealing with externals’ concerns, for example is the contractual process benign or difficult and excessively time consuming?

Are pertinent rules and policies communicated appropriately and early? Are externals paid promptly? Is the orientation of the organization one that views external talent as interlopers or as welcome colleagues?

Readiness for Greater Use of Agile Talent

The question of readiness produced an interesting response. The chart below indicates what the HR executives believed to be the factor of greatest readiness, and the factor they believed was most weak. As the answers suggest, the area of most confidence in readiness was administrative alignment, followed closely by strategic alignment.

By contrast, the area of greatest concern was performance alignment. Interestingly, this is consistent with a recent study of agile talent in the logistics industry, where we asked sales and service leaders to describe their client organization effectiveness in working with agile talent.

Based on these alignment drivers, we recommend a four step process we call Agile Talent EQ for converting strategic intent into accomplishment:

  1. Clarify strategic direction. Leadership needs to take a hard look at the expertise requirements of their strategy and clearly define their approach to agile talent. In the current pilot study, HR executives were asked to anticipate the likely evolution of their organization’s agile talent approach. While indicative of the trend, its important for organization executives – together with their HR leaders – to identify their path on a more considered and examined basis.
  2. Assess the current state of alignment. Using the Agile Talent EQ survey, establish how well the organization is organized and performing against the four alignment factors. We recommend not only internal leadership points of view; where possible, key external relationships should also be invited to provide a perspective on strengths and needs for change or improvement. For example, early findings from the Agile Talent EQ survey indicate that leaders are far more confident about the quality of their performance alignment than are external experts.
  3. Identify needs, prioritize, and implement the plan. Having identified areas of strength and misalignment, leaders need to establish the game plan for improvement: what, who, how and by when. Communication is a critical part of the plan: internal employees need to understand the role and importance of agile talent, and the quality of collaboration between internals and externals that the organization needs. Poor communication, and inadequate leadership modeling, will lead to obvious problems down the road.
  4. Build reputation through communication. Organizations who adopt a surgical or transformational approach to agile talent must do more than ensure the alignment changes needed to ensure success; they must send the message to the agile talent communities that they depend on. An excellent example is Facebook’s CEO Mark Zuckerberg’s comment, “Facebook is also great for entrepreneurs/hackers. If people want to come for a few years and move on and build something great, that’s something we’re proud of.” Combining organizational change with encouraging leader communication is a logical recipe for attracting and retaining top external talent.

 

Alignment is the driver.

When top external experts, or gigsters, or advisors, or consultants choose from among the opportunities available to them, they want to make a difference (strategic alignment), make a significant and measurable contribution for which they are recognized and appreciated (performance alignment), be treated as a valued colleague (relationship alignment), and work with an organization that is easy to work with (administrative alignment).

Not surprisingly, agile talent wants to be treated as important talent, a contributor rather than a “necessary evil.” Isn’t that what we’re all looking for?

Agile Talent Co-Author Norm Smallwood also contributed to this post. 

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