Is this the end of the traditional company hierarchy?

Though it’s hard to imagine, the traditional idea of coming to work, sitting in your cubicle, and working on the projects you have with your dedicated team and manager are slowly coming to an end. Conventional hierarchies were once the foundation of the workforce. Now, they are making way for new models that encourage and enable higher levels of innovation.

The growth of technology is also causing radical reinvention of the way businesses are designed, built, and run. Imagine a large enterprise, but with almost no organisational chart. It’s hard to fathom – but this is where technology is taking the workforce.

The number of on-demand labour platforms and online work-management solutions is surging. These platforms enable enterprises to tap into a broad pool of external talent to supplement their operations. This means that workers with advanced or specific skills that the company may not yet have amongst its employees, are now at their fingertips.

Replacing traditional hierarchies with talent marketplaces

As a result, leading companies are dissolving traditional hierarchies. By replacing them with talent marketplaces, they are driving the most profound economic transformation since the Industrial Revolution. Labour platforms like Upwork are enabling workers to become more liquid.

They support distributed teams that are quickly assembled to complete projects and then dispersed. With this flexibility, companies are moving toward models where they run their organisation less like a hierarchy of static business processes, and more like an open talent marketplace.

Businesses gain the power to quickly look internally or to the external labour market to meet demand for skills. Take Proctor & Gamble (P&G). The 180-year-old company is creating new workplace models by experimenting with larger external talent marketplaces.

P&G is embracing on-demand talent by augmenting its current workforce with freelance workers. It recently completed a pilot program using Upwork’s freelance management system Upwork Enterprise. The results speak for themselves:  the pilot program delivered products faster and at a lower cost than conventional methods 60% of the time. The company is now looking to expand their efforts in this area. P&G is committing millions of dollars in funding over the next 2 fiscal years.

Without the legacy hierarchies that organisations have relied on since the industrial era, digital leaders can easily use these technologies to quickly fill talent needs, jump-start new projects, and respond to market changes. In doing so, the digital leaders are setting a path other organisations can follow to begin their own workforce innovations.

Organisations looking to implement a workforce marketplace strategy need to:

• Identify a top executive as the talent marketplace transformation sponsor.

  Task the sponsor to define a top-down, company-wide talent marketplace strategy; and to establish clear, measurable goals for improving agility and workforce opportunities.

• With a dedicated budget and executive-level stakeholders, launch a cross-functional team

  To define governance and HR policy, identify the relevant and allowable technology tools, and manage legal issues for a corporate blended workforce strategy.

• Start identifying pilot opportunities

  By interviewing business leaders within your organisation to determine which 2 or 3 groups, projects, or products are most in need of gaining agility in their workforce and skills in order to compete in the digital economy.

• Engage with freelance labour platform providers

  as your potential partners for pilots. Start understanding their know-how, offerings, and enterprise customer success stories.

Organisations will ultimately use the lessons learned from incorporating on-demand labour to drive larger transformations, establishing the corporate marketplace. Freelancers can continue to augment the workforce, but key parts of the internal workforce will also transform.

Instead of a traditional structure where individuals are hired for a single position and engaged in fixed business functions, a marketplace-like approach will support people being dynamically teamed together on-demand from project to project, based on skills, knowledge, and staffing needs.