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Freelance independent consultant marketplaces allow SMEs to compete asymmetrically.

In this article Dr Dorel Iosif, discusses the structural changes associated with the rise of the remote work and hybrid workforce.

The marketplace is changing, for both business owners and those seeking employment. The rise of high velocity markets and an increase in global mobility has led to a unique set of challenges.

Small and medium enterprises are, of course, most impacted by these challenges. Despite making up an estimated 95% of global business (and 80% of global employment), they often struggle to carve out a market share and reach their proverbial “escape velocity.” A blended workforce strategy can be an efficient tool when it comes to managing flexibility, multiple strategic initiatives, specialized work packages and costs.

Talent Migration and the Rise of On-Demand Marketplaces

Traditionally speaking, businesses seeking employees with a specific set of skills would simply advertise the position in local forums and hire the best applicant to fill the role. As it has become more common to travel for employment and education, both employment opportunities and the individuals with the skills to capitalize on them have started to gather in specific locations.

Silicon Valley is a perfect example of the results of the talent migration and the geographical pooling of certain industries, which Ed Glaeser discussed in his 2009 research titled “The complementarity between cities and skills”. This unique situation has left SMEs in asymmetrical competition with larger businesses for limited and often remote talent and made it harder for them to hit ‘escape velocity’.

This term, which generally refers to the speed at which a craft must travel to break away from the gravitational pull of a celestial body (around 25,000mph in the case of earth), has become a buzzword in business media meaning the point at which a business reaches the point of sustainable, profitable growth. Thanks to start-up costs, overheads, and labor costs, reaching this point is hard for any business, but SMEs, in particular, can struggle to meet the demands of modern, high-velocity markets.

Recent changes in the world have made remote working more common, and indeed more necessary, than ever before. As a result, those on-demand freelance labor marketplaces that have previously been on the fringes, or outside of the bounds, of traditional recruitment practices are experiencing a renaissance. By offering localized and regional SMEs access to global talent pools on an ‘as-needed’ basis, platforms like Cognisium, Upwork and Kaggle have made deploying an effective blended workforce strategy far more attainable for small and medium sized enterprises across the world.

The focus of the average business has changed considerably over the last few decades. Hyper connectivity and the exponentially increasing speed at which every aspect of culture is changing and being shared. That has made flexibility a necessity for most businesses. As the consumer has come to expect services and products ‘on-demand’, entire industrial ecosystems have had to adapt to the change of pace. This is no longer a ‘front of house’ issue focused on the retail sector.

The result has been a wholesale shift in mentality and focus for the majority of industries. Long-term views surrounding enterprises and the half-life of skills have become shorter as businesses have become forced to look beyond legacy projects and consider their adaptability and capacity to move swiftly with the pace of innovation, technology, and the opening and closing of delivery channels. The key drivers of the ‘on-demand’ or blended model for businesses of all sizes can be categorized as:

  • The need to remain competitive in high velocity markets

  • The need for labour flexibility

  • Competition for premium talent at a global level

  • Marketplace volatility and the changing demands of global consumers and service end-users

The increased volatility of many markets has led to a large-scale shift away from traditional employment and growth models. The World Economic Forum’s report titled “Future of Jobs 2020” found that 43% of the businesses surveyed intended to reduce their permanent workforce as a result of technology integration. Meanwhile, 41% intended to reduce their core staff and increase their use of freelance contractors in order to gain access to specialist skills.

This is not an isolated finding.

A further report by Harvard Business School that was titled “Building the On-Demand Workforce” reported that 90% of the C-Suite participants viewed marketplaces for premium, on-demand talent as important or very important to their future and ability to compete within the wider market.

This shift away from a traditional employment roster towards a ‘core’ staff that is supplemented by freelance and fixed-term talent within larger businesses is having an impact on SMEs, of course.

SMEs whose main advantage, in previous years, was their ability to ‘think on their feet’ and react quickly are now finding that larger businesses are emulating this model and must react in order to survive and thrive.

This is where an effective blended workforce strategy becomes essential to SMEs seeking to reach or maintain their “escape velocity”.

What a Blended Workforce Can Mean for SMEs

At the simplest level, an effectively blended workforce could provide SMEs with the edge that they need to stay afloat in the modern market. The ability to grow and shrink with the demands of business, while supplying a consistent level of quality to the consumers or end-users as a result of a skilled core team cannot be underestimated, especially for SMEs who are fighting an asymmetrical battle against large businesses, corporations, and conglomerates.

Beyond this, however, tapping into the ‘on-demand’ labour market has a unique set of benefits that are tied to the nature of freelance work as much as the level of expertise that an ‘on-demand’ expert can bring to the table. Freelance independent executives and specialists must cultivate a number of skills that include, but are not limited to:

  • The ability to meet short deadlines

  • The ability to extract key information quickly

  • Robust problem solving skills

  • Adaptability to varied positions and focusses

  • The ability to reinvent the materials, information, and systems to hand effectively

Thinking clearly on the move, so to speak, is a key feature of successful freelance work, and any freelance specialist or executive who is brought into an existing team will be unburdened by the knowledge of how things are usually done. This fresh perspective and the pragmatic, can-do attitude that ‘on-demand’ work fosters can be incredibly beneficial for any business that is facing new challenges and seeking growth.

What’s more, with an estimated 1.1 Billion freelance workers in the world today and the sector growing by 25% in the April to June quarter of 2020, on-demand workers now represent a sizable chunk of the talent pool.

A blended workforce strategy is no longer a matter of financial flexibility alone. SMEs looking to compete within their markets and larger ecosystems need to engage with the on-demand marketplaces in order to have access to premium talent on a large scale.

Therefore, the implementation of an effective blended workforce strategy could be the difference between reaching and maintaining ‘escape velocity,’ and struggling to survive in increasingly volatile and saturated marketplaces.

Creating a Successful Blended Workforce Strategy

Creating a successful and sustainable blended workforce strategy in both an individual and wider, cultural sense is no small undertaking. While both supply and demand are currently high in terms of freelance work, the talent pool leans heavily towards the creative and technological industries.

While a staggering 36% of the workforce in the U.S. alone completed some form of freelance work in 2020, this work was mostly carried out in specialist, complex, or technology-led initiatives (primarily by highly educated female workers seeking to find working arrangements that accommodate their familial situation). The COVID-19 pandemic has accelerated the supply of freelance workers available through digital and premium marketplaces, while encouraging remote and blended workforces within businesses of all sizes and natures.

Of course, the demand for specialist talent on an as needed basis has been growing within many businesses. Over the last decade, the full force of what Schumpeter dubbed “creative destruction” (or the point at which innovation and manufacturing increases productivity to the point that it destroys and revolutionizes the economic structures of the world from within) has been felt in every sector. While SMEs have long been at the mercy of volatile markets and consumer biases, larger companies have also started to feel the effects of this volatility as a result of habitual and exponential innovation in manufacturing, technological, and delivery processes.

As such, a new approach is needed: a corporate-led re-envisioning of the business world as a whole to close the huge and pressing skill gap in a way that allows supply and demand to meet in all areas of business. A good example of this is the partnership between and NASA in 2015. This partnership has crowd-sourced solutions to a number of issues and needs from 3D tools for robotic astronauts to mobile applications of all natures. In fact, currently aids NASA in crowdsourcing talent, tools, and technologies. This enables them to meet the demands of their on-going projects and the market.

This blended approach to problem solving has become more common at the highest levels of business. AstraZeneca used on-demand platform InnoCentive to solve delivery issues associated with the RNA and DNA molecules they use in research, while Enel used the same platform to enable them to overcome challenges to their ability to meet the UN’s 2030 Sustainable Development goals. SMEs, too, can utilize ‘on-demand’ marketplaces to overcome their challenges and meet sustainable growth and development goals in a way that allows them to reach a sustained and profitable status quo.

The Future of “Talent On-Demand”

The writing is on the wall, so to speak: it is unlikely that the role of the modern employee will return to pre-pandemic parameters. Instead, it is likely that the future of the full-time employee will change more toward the undertaking of routine, baseline tasks within the core of a business or corporations remit, while specialized tasks will be increasingly outsourced to the freelance market.

Cognisium believes that an effectively blended workforce will be the norm by 2025 and that core workers will be those who are experts in collaboration, effective communication, and collective intelligence management. As such, it is imperative that SMEs begin to shift their focus now to avoid being left out in the cold as the C-suite makes increasingly explicit, intentional, and systemic changes within larger corporations.

SMEs should therefore consider what their core tasks and needs are, what specialized talent they are likely to need in the immediate, near, and far future. Furthermore, SME owners should consider their current ability to communicate and delegate. Blended workforces pose many challenges because of the likelihood of time-zone differences and other barriers to immediate and effective communication.

Finally, a cultural shift will be needed to maintain the integrity and cohesion of a blended workforce.

Incoming, on-demand experts, executives, and specialists must not be seen to be a threat to the existing workforce, but should instead be a part of the wider company culture, so that all members of a blended workforce can contribute in an optimal manner. Likewise, the position of freelance experts as workers ‘outside the box’ must be respected. Ernesto Ciorra, Enel’s Chief Innovability Officer, encourages businesses to be humble and remember that the best solutions to in-house issues often come from those outside the company. This is, in part, due to the fact that such team members are not shackled by the knowledge of what has been done before.

Of course, if the future of blended workforces and ‘on-demand’ talent pools is to be bright, all of these changes must be made confidently and with clear and concise changes to policy and procedure. This is key to ensuring that all enterprises have the capability to maximize the expertise of these workers, while offering stable and sustainable environments for the continuation and growth of the remote and on-demand talent marketplaces that will be increasingly entering the fringes of the traditional workplace.

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