GBS Talent Crisis: Why Embracing an Outcome-Based Gig Model is the Only Way Out

The Need for a Workforce Revolution

For over two decades, the GBS / Shared Services model has been enterprises’ competitive advantage with people as the driving force. GBS of the future is a tech-first force that minimizes costs and enables topline growth. Based on the optimal match between business-savvy humans and technology, GBS will be the enterprise’s backbone that orchestrates cross-functional processes and delivers business outcomes. 

GBS has faced talent challenges such as hiring roadblocks, high attrition, and poor workforce engagement. The current workforce model and hiring methods need to be changed. In other words, we need a workforce model revolution.

Talent challenges have two dimensions: 

• The management angle – What do GBS organizations need to succeed?
• The workforce perspective – What Talent wants to be happy and engaged?

The management angle – What do GBS organizations need to succeed?

According to a 2023 SSON report, 41% of GBS Leaders highlighted talent issues as their most significant risk. From the management perspective, GBS organizations must upskill the existing workforce, infuse tech-savvy talent, attract talent with a business and revenue mindset, and onboard next-generation leaders. It is all required to increase the probability of success. Management must also address the problem of retention and low engagement by finally responding to what people want. Upgrading EVP with new slides or winning another award as a “Great place to be” will not do the job. 

The workforce perspective – What Talent wants to be happy and engaged?

From the talent perspective, a Gallup Survey highlights the following key engagement factors: better work-life balance, the ability to do what Talents do best, better job security, and diversity plus inclusivity. As a Career Mentor, I observe the younger generation wants to operate in an outcome-based and transparent model where input correlates well with the output. People want to choose when and how they work and earn more money. They are eager to learn new skills and enjoy opportunities to demonstrate their prowess. Do any of those needs sound crazy? I don’t think so. So if it is all reasonable, why are we not responding?

The Outcome-Based Model and Embracing the Alternative Workforce

At the May 2023 SSON conference in Lisbon, we discussed talent challenges, and the typical responses were: as leaders, we need to act with empathy, care more, listen more, and work with integrity. As GBS Leaders, we’ve heard it for years. The future of GBS needs a new workforce model. GBS organizations must engage an alternative workforce, tapping into the gig economy, including part-time and outcome-oriented workers. The gig economy allows the corporate world to get optimal quality at optimal cost and enables gig workers to monetize their capabilities. Many roles in GBS today are temporary or part-time, but we still tend to hire full-time employees for those roles. Check out the chart below(refer to Figure 1).

Figure 1 – GBS activities suitable for gig workers

Source: Future of the Gig Economy and the Shared Services Delivery Model | Deloitte US

Additionally, a Deloitte report shows that in 2022, an alternative workforce already represented 36% of the US workforce. By 2027, this alternative workforce will become most of the US workforce. Whether you like it or not, this revolution is coming, so you better prepare for it.

Gig workforce Example

Unilever’s U-Work model engages with gig workers by offering a flexible approach to work, allowing them to pursue other interests and design their work patterns. Workers receive a monthly retainer and benefits, with pay for each assignment. This approach benefits people who want to reduce working hours as they age, working parents, and those who wish to travel or study without sacrificing their jobs. U-Work also benefits Unilever by avoiding the additional costs of finding freelancers with the most relevant skills for each assignment. It’s a win-win solution for both the company and the employee.

The Housing Analogy

To visualize the benefits of the Alternative Workforce model, let us take an analogy from the housing market. Buying a house means taking a negative Free Cash Flow hit. Plus, from day one, you are responsible for maintenance, repairs, taxes, etc. In five years, the design will become outdated and need upgrades. Your needs might change in ten years, and you’ll want to sell the house, but selling an asset of $1 million is difficult. Eventually, there is a high likelihood you’ll sell the house at a discounted price. With buying option, you will surely meet your essential human needs, i.e., the desire to own. That is why we are often comfortable accepting the long list of disadvantages that goes with it—and letting emotions and desires be the king, not data or facts.

Renting, on the other hand, has no negative impact on Free Cash Flow. One can invest the saved money into a more flexible and promising investment product. You don’t need to worry about anything, but you can enjoy the house; its newest design perfectly matches your requirements. In case of unmet expectations such as quality, reasonable cost, and great experience, you can change it easily. The latter is the gig model. The first one is your permanent employee. 

Get ready for tomorrow

This revolution requires a significant mindset change, trusting employees more than we do today and opening our corporate doors to the new ways of hiring. It is time to step away from owning to renting, from liability to asset to optimize the Return On Investment for both parties, i.e., employees earning more money, employers paying less per deliverable, employees growing the area of their strengths, and employers getting the best skills available on the market. Collectively, these will result in a financial and capabilities win for both parties. Once instituted, other essential elements such as HR or Compliance policies, enhanced capacity planning models, and other factors will be managed swiftly. 

In conclusion, the GBS/Shared Services model has been a critical driver of business success for over two decades and will continue to be so. However, to succeed in this rapidly changing landscape, companies must be willing to embrace new models of working and tap into the gig economy. They must focus on upskilling their existing workforce in particular, attracting top line experienced and tech savvy talent, and creating a work environment that fosters people growth and development. GBS should do what the IT industry has done in the past. Doing so will build a force capable of driving innovation, growth, and success in the future. The gig economy including outcome based models seems to be the only way out to the success. 

Maciej “Magic” Piwowarczyk

Global GBS Executive | Career Coach & Mentor | Shared Services Senior Advisor

www.transformwithmagic.com

Thanks to Abhinav Shrivastava and Raj Basotia for their efforts in putting together this article.