The future belongs to businesses that can evolve with an adaptive workforce

May 11, 2022, 3:33 PM UTC
The transition to project-based work could help Western economies improve stagnant productivity growth.
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The way businesses work had been shifting for more than a decade when the COVID-19 pandemic upended it irreversibly in 2020.

Today, much of the talk about the “future of work” is really about the mixed experience of remote and hybrid work models, the ever-elusive return to the office, and whether working a nine-to-five job full time is even worth it at all.

With some 37.4 million Americans expected to call it quits in 2022 alone, according to consulting firm Gartner, and a majority of the workforce projected to work freelance by 2027 if recent growth rates hold constant, the answer for many seems to be a resounding “no.”

Although this revolution started with workers, the reckoning for business leaders has been severe: Almost 11 million job openings in the U.S. remain unfilled, and the labor and skills shortage was one of the top disruptions cited by CEOs across multiple surveys.

To attract and retain talent, employers must certainly have a strong culture and a well-developed corporate purpose. In my experience, freelancers, like full-time workers, will also increasingly be attracted to companies when there’s a strong alignment of values.

However, the new dynamics of the talent market are far bigger than these corporate buzzwords. It’s time for businesses to confront this reality by implementing a new operating system for work.

This new model must integrate, organize, and optimize independent talent at scale in more agile ways, enabling businesses to draw from a diverse set of workers who will increasingly seek to engage on their own terms.

This is already happening. Fiverr, the company I lead, matches buyers and sellers of freelance services worldwide. In the first quarter of 2022, the number of “Fiverr Business” accounts opened by companies with 50 or more employees nearly doubled year-over-year, suggesting that the trend is rapidly taking hold among ever-larger organizations.

Businesses have tremendous flexibility to engage independent talent as a supplement or complement to full-time employees who own core competencies. Research by consulting firm Bain has shown that only five percent of roles account for more than 95% of an organization’s ability to execute strategy and deliver results.

Companies face a tremendous skills gap. Across 7.5 million job postings in IT, finance, and sales studied by Gartner Group, for example, 29% of the skills listed in 2018 vacancies may no longer be needed this year, even as the average number of skills required in postings jumped from 17 to 21. In a dynamic economy, businesses need to fundamentally rethink how they acquire, maintain, and advance essential but fast-changing skills.

With near-flat productivity growth in Western economies, projects–not operations–are the engine of innovation and value creation. In 2017, the Project Management Institute forecast that project-related activity would be worth $20 trillion in 2027, up from $12 trillion at the time.

Fluid project-based “roles” could replace “jobs” as an organizing principle of work and a source of professional meaning, opening up new possibilities for the integration of independent talent.

We’ve seen this movie before–quite literally. In the early 1920s, vertically integrated Hollywood studios owned the entire filmmaking process, from employing the actors to controlling filming and distribution. That system began to decline in the late 1940s.

Over the last two decades, freelancers and the self-employed have filled an increasing number of roles in the filmed entertainment business.

These days, ad-hoc film crews, from make-up artists to writers and producers, are assembled on a project-by-project basis and then disbanded, a model that streamlines production and operations, focusing resources on delivering the best outcome. Iron Man 3 credits 3,310 crew members, although the average number of crew credits in top films is about 600.

In the coming years, a Hollywood-like talent cloud, powered by technology, will roll across the economy, enabling businesses to rapidly solve the limitations of a full-time, static workforce.

Unfortunately, many business leaders haven’t yet gotten the memo. In almost two-thirds of companies, freelance talent is not managed by HR but rather by the purchasing department, according to a 2019 survey.

In the new world of work, it’s no longer enough to simply overlay a hybrid model on an existing workforce strategy that was conceived for another era–nor is it sufficient to treat freelancers as an afterthought.

We are living in a dynamic, rapidly evolving business environment. Companies must rise to the challenge by marshaling talent in fundamentally novel and innovative ways.

Micha Kaufman is the founder and CEO of Fiverr.

The opinions expressed in Commentary pieces are solely the views of their authors, and do not reflect the opinions and beliefs of Fortune.

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