HR Beyond Employment: Work Engineering

HR is steeped in a language of employment. HR systems focus on how people move into, through, and out of the organization, primarily as employees. HR maps that movement with a set of jobs that are stable collections of tasks. HR leaders define their work in terms like “employment” brand, “employee” engagement, “employee” turnover, and the “employment” deal. HR creates reward systems that are designed to apply to a collective set of employees, and work best when those employees stay for the long term. When HR considers the labor market, it is through comparisons between the organization's jobs and employees, with the jobs and employees of others. Training and capability development are couched in terms of what can be delivered inside the organization and in terms of gaining experience by moving through a series of jobs. Employment relations is framed as the relationship with a union that represents employees, or employees gathered into collective bodies like works councils or even affinity groups.

Can HR apply to the world beyond employment that we have described? It's a world where the concept of a job is irrelevant or inadequate for describing how work can be deconstructed and dispersed. It's a world where a reward system based on traditional elements carefully constructed and monitored for equity and motivation of the people inside the organization boundary is inadequate. That reward system doesn't reflect a world where rewards are often nonmonetary and where the most relevant workforce exists outside the organization boundary on a talent platform. It's a world where work and workers are expected to move seamlessly back and forth over the organization boundary, or never even join the organization, making concepts like “employee turnover” and “employee careers” too confining to capture the reality of the options available to workers and those receiving the work.

To be sure, we see today's HR systems incorporating ideas from a world beyond employment. Today's HR systems can count work that will be done by contractors or freelancers in the currency of full-time-equivalent (FTE) employees. The costs of such workers can be reflected in HR budgets. It may also be that for some organizations, nonemployment work arrangements will be exceptions, so it is adequate for HR to focus on systems designed to manage regular full-time employees.

Yet, as we have seen, even for organizations that get work done through employees, the drumbeat of change in the work is getting louder. Every day, employees look more like free agents. Every day, some new area of work becomes feasible to do on a platform. Leaders can't escape the evolution of work simply by avoiding nonemployment work arrangements. Even their regular full-time employees are affected. More important, leaders must have systems that help them optimize how they use different work arrangements. The employment relationship itself is evolving to a beyond employment reality. Organizations and workers face increasing uncertainty and shorter time frames in which they can predict what the work will be and who will do it. Workers demand rewards that are more differentiated and imaginative than can be offered by a typical employment system. Talent platforms can increasingly gather up a far larger and more diverse global population of workers, and allocate work in a more precise way than any one organization could expect to do. Even if a large and sophisticated organization chooses to provide the sort of arrangements that a talent platform can, it will find itself creating an internal talent platform that resembles the one that already exists outside.

As an organization leader, can you really afford to assume that the HR systems you have built to handle “employment” will be sufficient to navigate a world beyond employment? Are you willing to relegate your HR systems to what may be a smaller and smaller set of workers who have traditional employment arrangements? To whom will you turn for expertise and insights to navigate this new world? Today, your procurement or finance function may be the default location for these decisions. Leaders should demand that their HR organization step up to these challenges.

As an HR leader, can you foresee a robust and strategic contribution for you and your colleagues if your focus continues to be on honing systems that presume employment is the way work gets done? Is it not the opportunity and even the obligation of HR professionals to become the experts at navigating this new world beyond employment, or risk that other disciplines with less of the vital expertise will take up the mantle by default? HR professionals and others in the HR discipline have an exciting and momentous opportunity to embrace the challenge of bringing all of their expertise to bear on this new world.

There is much to be learned from the wisdom and knowledge that the HR profession has amassed over decades of research and practical experience. However, that knowledge and those important HR insights and systems are at risk of becoming irrelevant if the rigid assumptions about employment are not questioned and refined to fit the new world.

Our Lead the Work framework is not only a guide for leading the work but a way to navigate the new world of HR as well. For HR leaders, it's both a challenge and an invitation. For leaders outside of HR, it offers a mandate to ask and expect more from your HR leaders and their profession. As we shall see, the resulting vision of the future of HR is optimistic, has high impact, and is deeply pivotal to organization success. The vision works, whether applied to employees, those outside the employment relationship, or the hybrid workers who will shift between the two roles. Not only does it offer ways to incorporate nonemployment work arrangements into the HR domain, it offers insights about how HR's approach to employment itself can be more creative, optimized, and mutually beneficial to workers and organizations.

In sum, when the focus shifts to leading the work, then even the name Human Resources seems inadequate. A consortium of top HR executives mapping the future of the profession has suggested the new name should be “Work and Workplace Engineering” to reflect the new focus and a new mandate to create an optimally designed ecosystem of workers and workplaces to achieve the organization's mission.

Let's take a tour of this new world, through the lens of the Lead the Work framework, to see the evolving profession that leaders must demand and HR professionals must prepare to deliver. The questions we pose along the way are designed to offer an outline for the vital dialogue that must occur between organization constituents (CEOs, Boards, officers, and investors) and HR leaders (CHROs, professional associations, and thought leaders).

The Talent Lifecycle

The effects of the world beyond employment on the HR discipline and HR functions is complex, so it's helpful to frame it within a familiar metaphor; the “talent lifecycle” (Figure 10.1). Organizations often have their own version, and we encourage leaders to apply the ideas in this chapter using their own depiction of HR, as the principles we discuss generally apply to any variation of this concept.

The talent lifecycle describes HR as a series of employment life stages beginning when a person enters the organization, capturing their experiences as they encounter its rewards and development opportunities, and finally the lifecycle ends when the person separates from the organization.

A typical list of the stages of the talent lifecycle is shown in the outer circle. The cycle starts with planning, through which the current and future supply of workers and demands for work are estimated, while strategies and tactics are developed to match projected demand to projected supply. Attracting and sourcing identifies the sources from which workers are drawn and the activities to attract workers to engage with the work. Selecting chooses which of the willing workers will be matched with what work. Deploying moves workers among different work experiences, locations, and assignments over time. Developing builds the capacity of workers through experiences, such as training, experiential learning, and challenges. Rewarding conveys an array of benefits to workers through explicit exchange or through implicit experiences via the work itself. Finally, separating ends a relationship between a worker and a particular work assignment or experience.

Traditionally, the lifecycle is expressed in terms of entry, movement within, and movement out of a particular organization, and it's shown in terms of a series of jobs contained within that organization. It's often called the “employment lifecycle,” which begins when you join and ends when you leave a particular organization. We have been careful here to avoid referring to a single organization and its jobs. As we shall see, if we use the words “work” and “worker” instead of “organization,” “job,” or “employee,” this familiar model can become a powerful organizing metaphor for a world beyond employment. The idea is that all of these lifecycle stages still occur, but not necessarily within the boundary of a single employer and not necessarily through work experiences organized as jobs.

In the middle of the circle are a set of broad outcomes of the employment lifecycle. Here, we have included engagement, leadership, diversity, performance, and culture. We will take them up in the next chapter.

Surrounding the traditional employee lifecycle in the diagram are the familiar three dimensions of the Lead the Work framework: assignment, reward, and organization. In the sections that follow, we will take each lifecycle element in turn and show how the Lead the Work framework helps leaders fashion a future HR approach that optimizes success in a world beyond employment.

Planning

In a world beyond employment, planning is transformed from employee supply and demand and gap analysis to work and worker engineering and optimization. The unit of analysis becomes the work, not employee head counts or FTEs. The domain becomes the full array of work and workers—not only what is contained within the organization boundary. The scenarios and options that are considered now include not only supply, demand, and deployment but how to dial the dimensions of the assignments, the organization, and the rewards.

When assignments can be dialed up or down on deconstruction, dispersal, and detachment, planning must now ask questions such as, “Could we alleviate a planning constraint or dilemma by breaking up the job into its parts?” and, “What tasks should be kept together and which ones separated?” Sometimes it will simplify planning, because once you deconstruct, disperse, and detach the work of coding to Topcoder or logo design to Upwork, your plan is simply to tap those platforms for a ready inventory of qualified workers on demand. When assignments can be dispersed to workers who are employed by other organizations, then planning systems must extend beyond “counting” work only when it's paid for through an employment agreement. Simply translating outsourced or contracted work into full-time equivalents (FTEs) misses the point. Planning systems must design and consider options that include reaching into other organizations, or considering which individuals would be willing to do the work as free agents. The entire notion of the “supply” of workers changes.

That draws in dialing up and down the organization dimensions. A permeable, interlinked, or collaborative organization boundary means that fundamental planning concepts such as head count, worker availability, movement between jobs, and worker separation must take on very different meanings. The key planning issue may be where to allow the boundary to open and where to keep it closed. When “employment” planning shifts to “work” planning, plans include a connected network of work sources, including platforms, outsourcers, individual freelancers, and contractors. No longer can planning simply define work as “in” the organization when done by employees and “out” when it is not. Contractors, freelancers, and crowdsourced workers don't fit either category. Leading the work means forecasting the number of available freelancers from Topcoder, consultants from Towers Watson, and crowdsourcers available on Tongal, as much as forecasting the number of candidates for jobs.

A collaborative organization means planning must include looking inside competitor or partner organizations for talent. Instead of, “How do we beat them or prevent them from taking our employees?” the question may be, “Where could we form a useful alliance, or trade talent in a way that would advance our mutual goals?” Recall the example of Siemens partnering with Disney marketers to sell the Siemens hearing aid for children. For the Siemens planning system, the question, “How many Siemens marketers are available?” would miss the point. Siemens must include Disney in their talent supply. Indeed, a work planning system must track the available supply of marketers who are employed by others, ready to freelance from a platform, available through consulting firms, and self-employed as contractors for hire. The same thing applies to talent demand. If Siemens partners with Disney to borrow their marketers, then should they consider Disney as a destination for their engineers, perhaps on a project to design Disney roller coasters? Should your planning system include destinations for your workers that are other organizations, platforms, consulting firms, and self-employment? That offers many new options to alleviate worker surpluses beyond layoffs.

That brings us to how rewards could change work planning when the work relationship can be short term (even momentary), individualized, and imaginative. Some things will be simpler. Workers with a contract carrying an expiration date don't require forecasting how long they will stay. When the rewards become more imaginative and individualized, planning only for work done by paid employees will miss the true workforce. Many paid workers will not be counted in the human resource system, but as payments through the procurement system, or contracts with consulting firms or talent platforms. When rewards do not include money at all, how does a planning system “count” talent that is engaged through voluntary crowdsourcing or games? Future planning systems must explicitly incorporate the quantity, quality, and cost of such workers. Indeed, future workforce planning may draw as much on procurement experts as it does on traditional HR experts.

Attracting/Sourcing

Today, attracting, sourcing, and recruiting typically focuses on employment, and companies look for job seekers who want to work for the organization and who fit its requirements. The idea is to attract a pool of individuals for jobs. Leading the work requires a process of seamlessly engaging multiple systems (procurement, contracting, partnering, recruiting) to attract workers for engagements that may not be jobs at all.

When you can dial up the dimensions of the assignment, organization, and reward, you must attract workers for specific tasks, projects, or microtasks, or their combinations. This may simplify things for commoditized work that is not pivotal to the organization's success, such as tagging pictures on MTurk. “Sourcing” is simply putting the job on the MTurk site, far simpler than attracting candidates for full or part-time jobs. Yet, once you let the organization boundary become permeable, and begin to interlink and collaborate, the issue becomes more complex and richer. Do you want the top designers at Tongal or Upwork to work on your projects? What's your “engagement brand” with those employees?

It's unlikely that any company could afford to have a “job” that involved developing advertisements to run on YouTube only during the Super Bowl. However, once you deconstruct that project and disconnect it from the “jobs” of the organization, you can imagine sourcing it with crowdsourcing or freelance platforms, and rewarding it with a huge payoff or fame that could not fit into a traditional recruitment offer. When Colgate or Ford run a contest for an ad to be broadcast on network television, they have the freedom to craft the project and its payoff in ways that might not be possible with employees. A one-off relationship specific to that project allows for appealing to a very specific pool of talent, and with a message and rewards that you might not want to replicate for other employees. The “product brand” of Colgate or Ford may be the key to attracting free agents, not your “employment” brand.

Dial the dimensions to include volunteers, and attracting/sourcing morphs even more. Unilever created a global campaign to encourage improved body image among women and how products such as Dove soap contribute to that image. With missions like these, organizations can tap a vast source of workers who are eager to help, but don't show up as job applicants. This is even true for paid freelancers. If you attend the Tongie awards ceremony, you can see the pride of the freelancers that worked on campaigns funded by the Bill & Melinda Gates Foundation. The Tongalers choose what projects to work on and your “brand” with them may make the difference in whether the best choose yours.

Dial the dimensions to include borrowing and lending employees from other organizations, as we showed with the insurance industry example in Chapter 8, and attracting/sourcing looks even more radically different. In Beyond HR, John Boudreau and Pete Ramstad described how supplier relationships became even more pivotal when Boeing decided to construct the 787 out of composite plastics instead of aluminium.³ The expertise in composites often resided with suppliers, not with Boeing engineers. In essence, when Boeing worked with suppliers, it was borrowing those supplier employees. Boeing's internal magazine featured front-page pictures and stories of supplier employees working side-by-side with Boeing engineers. It was key for Boeing to attract the best of the suppliers' employees to work with them. Think how much more attractive Siemens is for marketers if it can point to opportunities for them to work with Disney marketers on special projects.

Will your future head of recruitment be someone as adept at attracting freelancers, volunteers, and borrowed employees as they are at attracting eager candidates for your regular full-time jobs? Will you need an entirely new sourcing function for workers who are not employees? Will you leave the sourcing of nonemployee workers to procurement? The answer depends on how you dial-up the dimensions of the Lead the Work framework, and getting the answers right may make the difference between attracting the best and the worst workers.

Selecting

Who gets chosen? Today's selection systems largely focus on choosing candidates to become regular full-time employees, often assessing things like cultural fit, to make sure the employees have the potential for a career beyond their first job. When you consider dialing the dimensions of the assignment, the organization, and the reward toward a world beyond employment, the concept of choosing and selecting workers changes. You can choose workers for deconstructed tasks that can be done anywhere and paid instantly. Sometimes, that means leaving the entire selection process to the talent platform. If you interlink with platforms for tasks like coding or logo development, with easily observed results, does that render irrelevant the standard selection qualifications such as education, quality of university, past employment, and test scores? Coders routinely publish examples of their computer code online. Why not just analyse the person's past work? Do you trust Topcoder's evaluation of its talent? Topcoder has gone to great lengths to design contests and even training programs to develop and rate coder capability. MTurk has less sophisticated systems of assessment. Future selection systems will require a way to decide how much vetting is enough when another party is handling it.

If you collaborate with another organization to borrow their employees, will they share what they know about their workers to help you select the right ones to work on your project? Would you share what you know about your employees with them? When rewards become impermanent, individualized, and less monetary, workers may not need to be selected so much for “fit” with an employer, because the reward elements can be fitted to the worker, rather than fitting the worker into the organization. If American Express awards an advertising project to a Tongaler, that person may amass a group of freelance colleagues to do the work. Do they need to “fit” with American Express? Perhaps not, but on the other hand they might create a more appropriate advertisement if they had something in common with the culture and values of American Express.

In a world where you lead the work, what are you really selecting for? It's no longer as easy as saying, “We select for this job,” because the work can be deconstructed and reconfigured. What is the common language of work that you can use to communicate with workers that arrive as individual contractors, are provided by a platform, or are borrowed? In Transformative HR,⁴ we described how IBM's Global Workforce Initiative created a global supply chain of talent, where talent moved freely across global units. That required getting IBM's global leaders to adopt a common language to describe the work, so that one region wasn't defining a job like “project manager” differently from another. IBM ended up requiring all their units to adopt the same common language based on about 100 “roles.” IBM then required all of its external talent suppliers to adopt the same language so that IBM could better choose among the external workers and better connect the external supply to IBM's internal supply. Can the language you use to describe the work when you choose your candidates for regular full-time jobs also serve you when you're choosing candidates from talent platforms or borrowing them from other organizations?

If you can turn the reward dial to make individualized deals, then you can do individualized selection. We see this already in industries where reputation and performance are very public, such as entertainment, sports, and investment analysis. A movie studio doesn't just select a really great film director, they select James Cameron. A basketball team doesn't just select a really good player, they select Kobe Bryant. An investment firm doesn't just select a really good technology-sector fund manager, they select the one person who got the highest rating last year. In every case, the deal required to get the talent will likely be highly individualized and often very lucrative for them, compared to others they will work with. Such pinpointed selection will be possible in many more areas of work. Already, you can select the very best computer coder in a certain language on the Topcoder site, as long as you are willing to make him or her a deal commensurate with their reputation. Tongal and Upwork are creating a similar marketplace for top designers.

These examples pose a fundamental question for the role of the selection process in a world where you lead the work, not just the employees: When should your organization's selection systems choose your workers, and when should they be chosen by someone else? Will your head of “employee selection” soon become a head of “worker quality assurance” who is as adept at analyzing the selection methods of platforms, contractors, and partner organizations, as they are at selecting candidates for regular jobs? Increasingly the function that used to be concerned with choosing candidates for jobs must now go beyond just choosing, and seamlessly integrate with how you dial the assignment-organization-rewards dimensions.

Deploying and Developing

Deploying moves workers among different work experiences, locations, and assignments over time. Developing builds the capacity of workers through experiences such as training, experiential learning, and challenges. Development includes other key experiences, such as classroom training and mentoring. Deployment and development are so closely aligned that we treat them together.

When you focus on leading the employees, then deployment and development focus on moving employees laterally and vertically within your organization to fill open positions, give employees jobs they want, and/or develop employees. Leading the work in a world beyond employment means that work and workers move across a network of tasks, microtasks, companies, platforms, and alliances. Development and deployment today focuses on ideas such as promotions, demotions, and transfers. When you lead the work, these ideas give way to concepts like tours of duty, sabbaticals, special projects, and talent trades. Deployment and development systems have always had to balance competing goals such as cost-efficiency, high job performance, and strong employee development. Even today's deployment systems focused only on moving employees are clunky. Often, different units of the organization don't know what sort of talent resides in other units, and moving people from one unit to another is too often the result of fortuitous meetings of managers who happen to each know a good candidate or have an open position. Ignorance of talent needs and availability across organization units can cause leaders to do things like hoard their best talent rather than contributing them to the larger system.

If today's systems struggle even to optimize regular full-time employee deployment and development, they may be dangerously inadequate in the world beyond employment, which will require that they take account of a massively expanded set of options. The limitations will be played out on a much larger stage. Yes, the option to deploy work and workers across a vastly larger ecosystem than just your own organization offers you advantages, but that ecosystem also offers your workers vastly more options to chart their own learning and development paths to best meet their needs. A world beyond employment makes many of those development options available to workers whether their employer provides them or not! So, mastering development and deployment in a world beyond employment is most likely to be a requirement, not a choice. The smart organization of the future will consider embracing them before they are forced upon it.

Systems built on the idea of deployment through jobs and hierarchical levels must give way to be rebuilt on deployment to tasks, microtasks, and projects. The idea of a “career” now may mean not a progression through positions, but accumulation of project and task credits. What does it mean to get “promoted” in such a system? Will workers self-define the value of the work elements and bargain for valuable assignments?

Detaching work from an employment agreement means that the authority to “deploy” talent shifts from an employment contract to a more arms-length relationship with a talent platform, outsourcer, or free agent. Today, this is often handled by service-level agreements focused on specific tasks or projects. However, if the future promises a more fluid and ever-changing configuration, can nonemployee talent be efficiently moved and reassigned by constantly creating new contracts? Does your talent deployment system need to incorporate long-term collaborations that allow for planned projects with a freelance platform or vendor, not only to accomplish the task at hand but to ensure the worker develops to be ready for your next task?

The lines blur between what is meant by worker “selection” and worker “deployment” in the world beyond employment. Deployment can now mean repeatedly crossing the organization boundary, and thus, each return to the organization can be seen as selection, or simply the continuation of career without boundaries. When that happens, the same issues about the language of work come into play. If the arrangement is viewed as outsourcing, then the precision and compatibility of the common language used by the provider of the worker and the user of the worker will become key. Do you trust Topcoder's evaluation of its talent? Would you trust MTurk? As we saw earlier, IBM developed its own common language for work and required its external providers to use it. Can you do that?

For the learning function of organizations, this creates an opportunity and a paradox. Learning functions in today's organizations have adopted an array of virtual and online approaches, well beyond traditional classroom learning. Some have extended their learning mandate to include potential workers at early stages of the talent pipeline, such as providing math and science learning to school children in hopes some will grow up to be candidates for future technical jobs. Yet, the focus of such functions largely remains on preparing individuals for current and future jobs within the organization. In a world beyond employment, workers won't wait for the employer to provide development and education on the new skill, if they can get it more quickly and effectively on a platform like Topcoder. This is a problem if the employer feels they must prevent workers from moonlighting on Topcoder, or that they must match Topcoder's ability to quickly identify and provide training in hot new skills. Yet, if learning organizations can embrace the idea of leading the work, not just the employees, a world beyond employment can alleviate many of the nagging problems plaguing in-house learning organizations for decades. If employers explicitly include and encourage online platforms as an alternative vehicle for employee development, that can free them from trying to compete with the platform and instead embrace it.

This is not without risks. It's quite possible that the best workers, once they experience life on a talent platform like Topcoder, may be tempted to moonlight permanently, augmenting their income and working on Topcoder as a consistent part of their work life. For a traditional employer, this can feel like a loss of the exclusive relationship with that employee. The employee is now closer to a market that may tempt her away. Yet, such platforms exist whether an employer admits it or not, and such moonlighting is now difficult to prevent. Perhaps the better option is to embrace it. Recall our story about the small company that was lucky enough to find a very talented computer coder locally, but, realizing the coder was unlikely to be satisfied with the small salary that the firm could provide, encouraged him to join Topcoder, while continuing to work with the firm. After he built a reputation on the platform, the coder received offers from Silicon Valley firms, but he turned them down. He liked the open spirit of his boss, and letting him learn, develop, and earn money on Topcoder was pivotal in the coder's decision to stay with the small firm.

The same dilemma and the same solution applies to learning organizations when it comes to alliances formed with other employers that allow talent trading.

Peter Voser, the CEO of Royal Dutch Shell beginning July 2009, retired in May 2013. Voser had more than 25 years of experience at Shell, having joined Shell in 1982. Historically, Shell's top leaders spent their careers at the company. But unlike many Shell leaders, Voser's career at the company was not continuous. He spent two years as the CFO of power and automation company ABB, from 2002 to 2004, before returning to Shell as CFO. In an interview in 2009, when he became the CEO at Shell, Voser said, “I left Shell for a short period to go to work for ABB. The main driver for me was to be CFO of a quoted company. I wanted that experience. I was ready and impatient with myself, and I couldn't see that happening fast enough at Shell… [At ABB] it was about survival, and we restructured the company, while sustaining sharp operational performance. Had we not done that, we would have gone under. I learned that it's better to drive change yourself first than to be forced by external events to do it. So my time at ABB was truly a formative experience.”⁶

In a world beyond employment, workers will more frequently take “tours of duty” that move them between your organization and others. What should be the reaction to a world where some employers form alliances with Google or a top technical consulting firm that allows them to have their employees tap the training and experiences of those firms as a tour of duty? A traditional organization might see this as competition and try to prevent employees from leaving by offering in-house training, or creating in-house versions of a Google-like environment in the hopes of competing with Google for those workers. However, perhaps the more savvy approach in the future would be to accept that the most effective skill development will occur within the organizations that do it best, such as Google, and rather than try to compete with that, companies should try to incorporate it into their learning strategy instead.

In the Lead the Work framework, such interlinkages can evolve to collaborations. The connections become symbiotic, and the organizations build mutual relationships based on common goals, trust, or economic necessity. Developing your leaders is now a collaborative effort with partners, so your learning agenda must take into account your partners' as well. Moving your people where they are most needed or where they can learn the most is important, but so is accounting for the needs of your partners. Today, learning and development systems focus mostly on what's best for the employer and employees within a relatively closed system. In the future beyond employment, lasting collaborative relationships that span a permeable and interlinked organizational boundary will require asking, “How can we help out a partner or talent provider by giving them some of our talent now so that they're more willing to give us theirs, or provide us a favorable deal on talent in the future?”

Indeed, the potential for collaboration has not been lost on the talent platforms. For a fee, Topcoder will help an employer use Topcoder's expertise in running contests that motivate and evaluate the skills of that organization's own employees relative to each other and the best in the market. Similar collaborative development opportunities occur when an employer hires employees of consulting firms as executives. The consulting firm may heartily encourage this because those executives become great clients for the firm. Time at a consulting firm is a way to have your people experience many more cycles of a skill or project than they ever could within your company. Today's learning and career systems often treat such situations as special cases, but evidence suggests that talent platforms and consulting firms are already creating an infrastructure that will make it easy to incorporate a more permeable, interlinked, and collaborative organizational approach. Chapter 6 described how IBM has developed an internal system to optimize just this sort of talent trading.

Imagine a learning strategy at a financial services firm like American Express that included using Topcoder as the learning platform for new software skills and a tour of duty at Google as the platform for learning the culture and technology of the web. A learning strategy built upon combining the best of what's outside with what's inside requires very different competencies and vision from chief learning officers (CLOs) but is likely to define their role in the future. We see harbingers of this today. At GE's John F. Welch Leadership Center at Crotonville in Ossining, New York, it's not unusual to encounter employees from other organizations that are market partners to GE. Those employees attend classes there to benefit from unique GE learning and experience. That benefits GE's partners as well as providing another way that GE can consolidate its relationships with those partners. This is an analog version of a boundaryless learning philosophy, and it requires that the CLO and learning organization at GE specifically embrace the role of its partners in its learning agenda. It's a small step from that world to one in which CLOs are called upon to embrace and incorporate talent platforms, tours of duty, and talent-trading alliances with competitors or consulting firms as the most effective way to create the learning they need.

Rewarding

The Lead the Work framework already includes a dimension on the Reward that we have discussed in earlier chapters. Here, let's focus on the concerns directly related to how HR will craft a total rewards approach. How should the perspective of leaders in areas of compensation and benefits change with the advent of a world beyond employment? As with the other elements of HR, this offers a challenge to HR professionals with systems that today focus primarily on employment, but it also offers opportunities to better optimize the contribution of total rewards to the organization's strategy and mission.

At one extreme, rewards might become mostly piecework, because all work will have been broken down into tasks and microtasks, where output is easily observed and rewarded. It's tempting to think that platforms like Topcoder and MTurk are basically just virtualized versions of traditional piecework systems that have been around for hundreds of years. Does that mean simply shifting to a piecework perspective can offer sufficient insights into how to optimize rewards for deconstructed work? Probably not. Even traditional piecework systems implemented by organizations that have a long history of success with them, can fail in new regions or countries. In the book Redefining Global Strategy, author Pankaj Ghemawat writes, “[As Lincoln Electric] has expanded abroad, it has done much better in countries that resemble the United States in allowing unrestricted use of piecework…. Where piecework isn't allowed [the company] is thinking hard about mixing and matching policies in a way that strikes the best balance possible between internal consistency and fit with the external environment—rather than naively emphasizing one or the other.”⁸

Dispersed work means that even when there are tangible outputs, they are often created in one place and then transported through intermediaries. This creates dilemmas for rewards that require personal contact to deliver. It also creates difficulties if you don't see the work until it is completed, so you can't reward effort, time, and/or motivation.

When you're not the employer, some elements of what you can offer as part of the deal will evaporate, such as employer-based benefits, and perhaps career paths and an affiliation with your organization. Yet, talent platforms, lending employees to iconic partners, and embracing career paths that welcome workers who leave and then return may allow you to entice workers with perks or offers that could not be made if they were employees. This requires new skills. How do you explain to your employed computer coders why their “deal” is different from what they would get if you hired them through Topcoder? How will your reward system allocate highly desirable career opportunities to do a tour of duty with an iconic partner such as Google, Disney, or others?

The fundamental definition of rewards will change more often. New rewards, such as reputation, will enter. Old rewards, such as traditional internal education, will exit. The notion of rewards slotted into an array of “jobs” arranged by hierarchy and market position becomes irrelevant when work is constantly being deconstructed and reconstructed, and when the boundary is constantly changing. For example, if your work system includes getting work done on a talent platform, using consultants, and by allowing trades and tours of duty with other employers, then what is the right “market” for setting pay levels and deciding what array of rewards is competitive? In today's world, these arenas seldom intersect, so perhaps even when an organization uses all of them, it's sufficient to say, “You are an employee, so your deal is different. Those Topcoder folks, the consultants we hire, and the people who work at the organizations where we trade workers are not our employees, so we can't incorporate them into our reward structure.” Even today, such a position is rather tenuous, considering that Topcoder pay levels are fully visible, and the emergence of sites like Glassdoor.com, where employees anonymously review their company's management and policies, make it surprisingly easy for your employees to find out what others receive at other organizations. Indeed, Edward Lawler at the Center for Effective Organizations has argued in his pieces on the Huffington Post that the idea of pay secrecy is an outdated concept, and that organizations should just make their pay decisions public to their employees.⁹ In the world beyond employment, your organization may actually move workers between their role as employees today, consultants tomorrow, platform-based talent the next day, and talent on sabbatical at another organization on another day. In such a world, it seems reasonable that workers will expect some fidelity in the level and type of rewards offered across these different roles. Yet, most reward systems today operate as if they can be walled off.

Today, organizations apply techniques such as focus groups and zip code analysis to their employees. Soon, they may be applied to scan the vast array of potential workers you might engage. If an organization is your “trading partner” for talent, then their reward array becomes as relevant to your workers as the one in your organization. If you routinely draw on talent platforms, then your employees will justifiably want your reward system to recognize their work alongside the population of freelancers. When you disperse work in time and space, like the JetBlue call-center operators who work from home, regional analysis of different employee needs and labor markets becomes paramount so that you don't risk losing employees by trying too hard to fit every region into the same system, or overpay through ignorance that in some regions nonpay rewards are much more valuable.

The world beyond employment offers the chance to break work down into its smaller components and often to see performance of that work in real-time detail. As we saw in Chapter 9, that means reward systems will need to have a much deeper idea about the return on improved work performance, the costs of motivating that performance, and the distribution of performance among workers. For example, if you don't need the best programmer, then you need to individualize the rewards to attract and motivate one that is “good enough.” When mitigating risk is enough, you want to put most of your resources into that, rather than pushing workers to excel beyond the point where risk is minimized. On the other hand, when breakthrough performance creates a large payoff, you want to provide very high incentives for breakthroughs, and perhaps less incentives for average performance. Platforms like Upwork, Tongal, and Topcoder generate vast amounts of data that can allow this kind of reward optimization, across a wide array of reward elements and thousands of free-agent workers. The data are there. Can it be long before such analysis becomes commonplace? It seems inevitable that tomorrow's reward systems will need to seamlessly incorporate the information and insights being generated in the talent platforms and other interlinked sources of work and workers.

When work and workers can move across the boundary, a reward in the future may never happen. It can be seen as a recipe for extreme employment-at-will with little long-run exchange. This is the classic danger being described by those who see the emergence of freelance platforms as little more than worker exploitation schemes. Or, organizations may make permeability a central part of their reward structure by creating rewards that entice and welcome workers to move out and in. Why not an offer of a big cash bonus upon returning to the organization after a worker goes outside to get valuable skills? It ushers in a world of “tours of duty” where rewards need to be portable and visible for things like documented skills and public achievements. Interlinking organizations and collaborative structures take this even further. When explicit connections exist between one organization and others, it makes the cross-organization pattern more predictable, so you can afford to create advanced rewards that actually capitalize on the permeable boundary. That's because if you create strong linkages with external platforms, contractors, or talent vendors that can offer unique rewards, you may be able to amplify your own reward structure through them. If you set up a collaborative relationship with an outsourcer, contractor, freelancer, or platform, you may be able to actually induce them to deliver rewards that are beyond your ability as a single employer, but also do it cooperatively with you.

You need not become an expert at using contests to motivate your workers to get new skills and then track which ones are best at those skills. Tongal or Upwork will run a contest for your employees, giving them internal or external recognition and prizes, perhaps based on your own projects or problems. The symbiosis goes in the other direction when you collaborate with you take on workers from a consulting firm, and that provides rewards to their employees that only you can offer (development or exposure to the latest technology), while having the option to move employees back to them when you don't need them.

In the world beyond employment, the very meaning of an organizational reward changes. The “deal” with your workers becomes boundaryless, more diverse; it can tap imaginative elements that were previously not available, and data that can optimize in ways hardly imagined today. The opportunities and the risks increase and accelerate. HR leaders and their constituents will be wise to begin considering those opportunities and risks now, in time to exploit them and shape them, and before they are surprised when the best talent demands them.

Separating

In the talent lifecycle, the stage of separating is typically seen as the end of the employment relationship. It's traditionally an easily measured event that is indicated by numerous administrative and accounting processes to terminate the employee. Indeed, employee turnover is one of the most widely and well-studied phenomena in organizations, in part because it is so easily measured. To be sure, there is much that the employee-turnover rate does not capture, including whether the departure is functional or harmful for the organization, the costs of the turnover processes, and whether the act of separating one employee to hire another reduces or increases the quality of the group in which the turnover took place.¹⁰ That said, turnover is historically and remains a central concept in human resource systems. Even today, organizations such as Google and Microsoft work hard to predict employee turnover using big data and sophisticated algorithms. It is one of the most frequent applications of big data and predictive analytics.

Is the whole notion of employee “separation” obsolete in a world beyond employment? The end of a project conducted by a contractor or freelancer is hardly a separation when that worker will be available in the future for more work. It is technically employee turnover when a “boomerang” employee departs to embark on a series of career stages in other employers, then returns to the original employer as a more qualified candidate. Seeing this merely as a separation and rehire hardly captures the potential value of such a boundaryless work relationship. An employee who leaves to join a consulting firm or alliance partner and remains closely connected to the work of their original organization, even though they are now employed by someone else, seems hardly equivalent to the traditional concept of employee separation.

Even today, the old model of employees going from “learning to doing to retiring” is certainly passé. Workers are already challenging the traditional notion of full-time employment followed by full-time retirement. The black-and-white boundary of employment followed by retirement is being replaced by phased retirement, where employees transition from full-time employment to part-time employment to semi-retirement to post-retirement employment to job sharing to temporary work. Organizations facing unprecedented uncertainty consider alternatives that involve talent on demand, where workers join at peak periods, then depart, often to work in other organizations, but are on call should future peaks emerge.

A future beyond employment will see organization leaders, planners, and HR professionals fashion the notion of employee separation into new concepts that encompass boundary crossing, outside intermediaries, innovative rewards that include “separating” and “rejoining,” and definitions of work beyond the “job.” This new approach to the idea of employee separation will make it less the end of a talent lifecycle and more an integral element of an ongoing series of engagements between work and workers.

When you deconstruct the work, the notion of “separation” has less meaning, particularly when it's done through a platform. But the idea of “keeping in touch” may be key. If the best designer on Elance has a falling-out with your organizationand won't work with you in the future, does that count as employee turnover? It may be at least as harmful as the separation of a more traditional employee in a less pivotal role.

However, if you can keep a good relationship with them, they are in a way “retained” as part of your available workforce. As long as the worker can be located and is willing to work, he may be counted as not “separated.” What might look like “serial turnover” or “job hopping” in the old world is now simply a series of engagements with a worker who is always available, even if he's working part-time for a competitor. The old notion of employee retention is replaced by a new notion of staying in touch for future accessibility.

Rewards that are individualized, short-term, and more imaginative also redefine what it means to join and separate. An individual contract for a screenwriter through an agent, for a consultant through a consulting firm, by its nature is a one-off relationship. Such arrangements naturally incorporate the expectation of separation followed by reengagement. The traditional idea of worker turnover doesn't apply.

In many ways, separation across the traditional organizational boundary starts to look more like “separation” across the boundary of one internal company unit to another. The more you can interlink with external organizations, the more options within this permeable network. The more collaborative you are with the external destinations of those that separate, the more options you have to optimize the separation and return pattern. Malleability creates a similar pattern. When IBM divested its PC division to Lenovo, long-term IBM employees technically separated from the organization, just as in a layoff, termination, or resignation. Yet, because they left as an intact group, the nature of their work, coworkers, and team relationships remained; they just moved outside the original IBM organization.

To illustrate the extremity of the changes, we have portrayed a workforce of people leaving and returning to the same company like so many bees around the hive. This may be well beyond the current experience, and even the future aspirations of most organizations. Perhaps the more fundamental message is that HR systems must rethink separation as a failure. When an organization creates the right ecosystem, the right people will join when it is best for them, and, yes, they will ultimately leave. This won't always be a good thing for the organization. Those workers may not return. That is the nature of the new world beyond employment. Yet, even if you can't count on getting them back, it makes sense to embrace a more boundaryless world. If you are the organization that “gets it,” the word will get around, and you will have a natural ecosystem of new talent, even if it's not the specific person that “separated” in the first place.

Leading the Work by “Rewiring” HR

Scott Pitasky, the Vice President of Partner Relations at Starbucks, coined the phrase “rewired” HR to capture the fundamental changes required for HR processes, infrastructure, and systems to meet future demands.¹¹ We have seen that a world beyond employment is a potent force demanding just such change. Like rewiring the systems of a building to bring it from the era of physical telephone lines to one of fiberoptics and wireless connectivity, the necessary rewiring of HR requires rethinking fundamental assumptions, not just modifying the existing systems and infrastructure.

To meet the future demands of leaders, and to live up to its vast potential contribution will require that HR leaders rethink the very foundations that support today's HR systems. While that observation has been made by many, with regard to developments such as big data and personal technology, there are few frameworks for mapping the specific changes needed and their ultimate purpose. The Lead the Work framework, and the world beyond employment that it embodies, provides one framework for not only envisioning the elements of that rewiring but actually providing the dimensions and principles to help optimize the new designs.

In order to fully appreciate the implications, however, we must complete the picture by examining the outcomes of HR. We take those up in the next chapter.