In the midst of an unprecedented talent market and rapid technological advancements, a unique opportunity unfolds – the rise of generative AI (gen AI). As industry experts anticipate gen AI’s significant impact on 80% of jobs across multiple categories of work, a fundamental shift in the anatomy of work is on the horizon. The intersection of talent and technology is expanding rapidly, raising questions about how this transformative force will reshape the already evolving workforce.
The evolving workforce and the impact of gen AI
We are witnessing an unprecedented labor market in the U.S. Unemployment rates remain low, resignations remain relatively high and job openings consistently surpass the number of unemployed workers. The overall labor force participation rate continues to decline—a trend persisting for the past two decades and expected to continue. Although the decline can be seen to be influenced by generational factors such as the retirement of older workers, there has been a consistent upward trajectory and an increased inclination toward independent work among all workers, especially younger ones.
A recent report by the Upwork Research Institute indicates that a staggering 38% of the U.S. workforce, or 64 million Americans, performed independent work in the past year, an increase of four million total professionals from the previous year. Additionally, the same report found that younger generations are embracing independent work: 52% of all Gen Z professionals and 44% of all Millennial professionals performed independent work in 2023. Given the high participation rate for independent work, the hiring landscape looks completely different from what leaders are used to seeing, and these trends will continue.
Enter: gen AI. According to research from McKinsey, gen AI has the potential to add between $2.6 trillion and $4.4 trillion in annual value to the global economy. Gen AI, grounded in natural language processing, has kicked off a frenzy of interest among organizations and workers as it harnesses the power of AI by submitting a request (prompt) into a simple interface. Tools like ChatGPT are unleashing the next wave of productivity, ushering in changes that are affecting various aspects of hiring, operations and more.
Today, leaders and workers are integrating gen AI across all facets of work. In organizations, leaders are pushing their teams to integrate gen AI into business plans, processes, products and services. As much as gen AI is disrupting traditional business models, it’s more importantly disrupting how they think about work and the talent needed to get the work done.
A strategic talent assessment: talent acquisition to “talent access”
In order to embrace disruptive innovations, leaders should strategically assess talent needs through a holistic workforce ecosystem approach. This includes everything from identifying skills gaps to investing in upskilling, but most importantly, taking a modern approach to workforce planning that incorporates a flexible workforce model, inclusive of full-time employees, independent talent, agencies, third-party partners and contingent workers.
To remain competitive and attract top-tier talent to meet business needs, organizations must adopt a “talent access” mindset that transcends conventional hiring methods. In today’s workforce, where the integration of gen AI is characterized by the need for speed, ingenuity, and adaptability, relying solely on traditional talent acquisition approaches often proves slow and costly, as it predominantly centers on filling roles with full-time employees.
In contrast, a “talent access” approach recognizes the pivotal role that other work arrangements like independent talent and contingent workers can play. This becomes especially critical in highly competitive talent markets where projects demand swift execution. Forward-thinking leaders have a unique opportunity today to embrace these shifts and construct comprehensive and flexible solutions that will allow them to stay competitive for years to come. Instead of thinking of talent as an “asset” that the company “owns” through acquisition, modern organizations think of talent more fluidly, including talent that is shared or borrowed to deliver a specific set of tasks.
Best practices for maximum impact
It is crucial that leaders continue to challenge conventional notions about talent as they continue to align with the evolving workforce and the speed of gen AI. This starts with crafting a holistic workforce strategy that recognizes and integrates the diverse elements of the entire workforce ecosystem.
Leaders can implement a holistic workforce strategy by shifting towards a “talent access” mindset – deconstructing jobs into tasks and aligning skills accordingly – to build agile talent pools to complete the tasks that need to get done. Leveraging technology, fostering collaboration across teams, and prioritizing continuous learning contribute to the strategy’s success. This mindset and deconstruction, when combined with the workforce ecosystem approach, enables organizations to leverage technology, especially AI, as a strong lever. This results in more collaboration and integration across the many elements of the ecosystem to get work done quickly, efficiently and with high quality, all in a scalable way.
A recent study by the Upwork Research Institute analyzes what sets high-performing companies and leaders apart. A critical attribute reveals that creating environments and cultures where flexible talent models thrive ultimately impacts confidence. They were 111% more likely to believe their teams have the right skills mix to meet goals effectively.
Effective communication, legal compliance, and securing leadership buy-in are also crucial elements in ensuring the strategy’s adaptability and positive impact on productivity and business outcomes. By adopting these practices, leaders can create and implement a holistic workforce strategy that maximizes the strengths of diverse workforce segments, fosters adaptability, and contributes to organizational success in an ever-evolving business landscape.
BIO
Tony Buffum is VP of HR Client Strategy at Upwork, where he helps businesses solve HR challenges related to finance, procurement and talent transformation. With more than two decades of experience leading global HR teams, he has held a series of leadership positions including chief human resources officer (CHRO) at FLIR Systems, VP of global human resources at STANLEY Security, VP of human resources at Stanley Black & Decker and others. Alongside his role at Upwork, he serves as Chairperson of PEI Human Capital Forum and is the HR Venture Advisor at SemperVirens, an early-stage venture capital fund investing in technology transforming healthcare work and financial wellness. Tony graduated from Cornell University with a B.S. in Industrial & Labor Relations.
