The rise and rise of the supplier workforce

Feb 17 2009 by Nic Paton Print This Article

All recessions change the workplace irrevocably, and this downturn is unlikely to be any different. In fact, as more and more people lose comfortable jobs and lifestyles and have to move to being self-employed or working on a contract basis to make ends meet, the very future of permanent "employment" is being questioned.

For those of us working in skilled or knowledge-based jobs, outsourcing is still something mostly synonymous with call centres in India or the Far East and, moreover, something that happens to other people.

But increasingly, as recession deepens across the globe firms are being forced to re-evaluate their costs and, once they have cut costs to bone, go back and cut a bit more still.

In this climate organisations are beginning to question whether, in the modern, wired working age where a lot of what we do does not require us physically to be under the noses of our managers, it makes financial sense to be maintaining an expensive, permanent workforce.

Organisations such as UK think-tank Career Innovation have for some time now been promoting the idea of workplace "agility", suggesting that growing numbers of us will over time be rejecting traditional careers in favour of becoming free agents.

Similarly the notion of an individuals' "NetRep" is becoming much more important, and not just in terms of ensuring those embarrassing Facebook photographs don't end up scuppering your chances of landing a dream job.

In the future, an individual's reputation, performance and reliability will be developed, promoted and possibly even judged online.

What we are moving towards, British entrepreneur Penny Power, founder of the social business network Ecademy, has argued, is organisations having a "supplier workforce" rather than one that is directly employed.

"Many companies are traditionally task-orientated and so are looking to outsource as a way to trim costs and bring in resources," she told Wayne Turmel on last week's Working Week Podcast here on Management-Issues.

"In the current climate, organisations have got to make the business lean whilst keeping valuable resources accessible to the business. And they know they can't afford the high costs of employing more people in the foreseeable future either," she added.

The notion of being able to use a workforce that does not require fixed overheads such as a regular wage, desks, chairs and computers, a pension and so on, is becoming increasingly attractive.

Within this, more organisations are realising that the cost of, and responsibility of, maintaining a permanent workforce is beyond their financial capabilities.

Therefore using a supplier workforce, rather than an employee workforce, will be the way to adapt into the 21st Century, Power forecast.

"One positive effect of the crunch is that people are being forced to take more responsibility for their own lives, their reputation and their work life balance. Many are finding they need to cut costs such as childcare and so working flexible hours becomes a more attractive option," she argued.

And for those who argue that such a lifestyle is inherently more precarious than being permanently employed, the almost daily announcements of redundancies and forced layoffs should be enough to provide pause for thought.

In fact, in the future, and even now, it is probably much more preferable to be a supplier of six companies than an employee of just one, Power has contended.

"With companies needing to acquire additional skills and resources without committing to high wage bills, the supplier-market is likely to boom in the coming months," she predicted.