A Guide to Elastic Resourcing Models

A new elastic resourcing model offers a solution for enterprises and large organisations wanting to minimise risk as they push for growth.

Enterprises and large organisations all over the world face the same challenge. How to continue to satisfy their customers' requirements, produce great products and services, grow and maintain their margins - all at the same time?

In this guide:

  • Exploring the growth dilemma
  • A new elastic resourcing model
  • Challenging the in-house model

Exploring the growth dilemma organisations face every day

"I need you to create me a [insert some new, trendy, weird, yet wonderful thing here]" are requests enterprise organisations are receiving from their stakeholders with increasing regularity. Fuelled by the speed of innovation in technology, businesses are constantly looking to new and exciting ways to market their products and services.

Every new 'thing', whatever it may be, poses an interesting challenge for any organisation. Get it right and everyone's happy. Get it wrong and it exposes a gap for a competitor to take advantage from.

This make or break gap created by the 'thing' is usually a result of resourcing. Does the organisation have anyone on staff they can use to create/design/code/build it?

Organisations have traditionally had two choices:

1) Increase headcount to close the skills gap
An ambitious organisation would hire a new member of staff with the skills needed. The result usually sees the incumbent team face internal pressures to demonstrate utilisation or justify another hire. There is also the 'productivity gap' to manage and pay for.

2) Outsource to an external supplier, e.g., marketing agency
In order to remain agile, flexible and responsive, the second option an organisation has is to pay a premium to outsource the project or requirement to an external supplier. For example, meeting the majority of marketing challenges, means hiring a marketing agency. Of course, this puts pressure on already stretched budgets.

Organisations are making these choices everyday, but they are risky. Hire and risk being slow. Outsource and risk increased costs.

What if it didn't need to be that way? What if an organisation could be ambitious without having to take a such a large gamble.

A new elastic resourcing method that adapts, expands and contracts according to demand is growing in popularity and it could be the solution.

A new elastic resourcing model

The model has 3 key components:

  • Strategists
    Responsibile for setting project strategy and direction, defining goals and objectives.
  • Resourcers
    The resourcer turns the project strategy into resource requirements, project scope and statements of work. The resource is responsible for assembling the right team to deliver each project.
  • Freelance marketplace
    This is the pool of creatives, developers, and writers. You could think of it as TaaS, Talent as a Service - where workers provide on-demand access to an array of skills and industry experiences.

Benefits of the new elastic resourcing model

There a number of benefits to using the elastic resourcing model:

Manageable Growth
The use of 'on-demand' talent means that 100% of the team is utilised, elimating the cost of underloaded employees.

Hiring a full-time member of staff can take a long time, with senior hires often having 3 months notice to serve. The benefit of using on-demand freelancers is there is relatively no time lag between receiving a brief and work starting.

Hard to find talent
The freelance marketplace also opens up access to the freelance community. Being able to access a large number of professionals who freelance as a second job, or who are on maternity/paternity leave means it can be easier to reach hard to find talent.

Challenging the in-house model

Organisations have used in-house staff for decades, why change that?

Firstly, our culture and attitude to work is changing, powered by technology. By 2020, the majority of the workforce in most developed markets will be freelancing. To continue to attract the best people, organisation will need to change how they resource projects.

There are also two good reasons why an organisation would embrace the elastic model right now.

Access to better quality
An organisation that limits itself to hiring people in a commutable distance from their physical location severely restricts their access to talented people. The world is a big place, with an ambundance of talent who live more than a 90 minute commute from your offices.

Advances in cloud computing, file-sharing and video-conferencing have completely negated the need for a person to be in the same room as you to collaborate effectively.

And by using a freelancer management system that enables seamless vetting and onboarding, you remove some of the factors that might affect quality.

Cost savings
This is probably the most common reason for using freelancers - the chance to reduce operating expense.

Whilst it's normally true a freelancer's day rate will be more than a traditional PAYE employees, an arbitrary comparison of day rates doesn't reflect true cost.

Let's look at an example of a mid-weight designer:

Day rate: £350
Equipment cost: £0
NI contributions: £0
Downtime cost: £0

PAYE employee
Salary: £40,000
Equipment cost: £2,000
NI contributions: £4,000
Downtime cost: £8,000 (80% utilisation)

The freelancer offers the benefit of 100% utilisation, controllable costs and no hidden overheads such as equipment costs, holiday pay or sick leave. The PAYE employee may be cheaper day to day, but in this example, the permanent hire will cost £46,000 whether they are working on a project or not.

Getting started

Getting started with a freelancer management system is a four step process:

  1. Conduct a thorough audit into your use of freelancers
  2. Enable your teams
  3. Create a pilot to solve the issue you've identified in a small, managed scenario
  4. Review, adjust and roll-out in stages

Conduct a thorough audit into your use of freelancers
The audit should help you to understand your pain points. Build up a picture of how and where your organisation is using freelancers. What roles are they fulfilling? How much are they costing? How are they engaged? What problems are you seeing?

Enable your teams
Selecting a suitable FMS partner is only the first step. In addition, you should empower and incentivise internal teams and stakeholders to make a change.

Create a pilot to solve the issue you've identified in a small, managed scenario
With the right FMS technology and an empowered team, you should create a small, managed scenario to deploy an FMS. If you are a global organisation, this could be a particular country, market or region.

Review, adjust and roll-out in stages
The pilot process will create both new challenges and learnings. What went better than planned? Did anything not go as predicted? What feedback did you encounter?

As you plan for a staged roll-out, incorporate as much of your pilot experience and feedback as possible.

Useful resources

Understanding your Applicant Funnel

As extended, off-payroll talent becomes a more and more important part of an organisations total talent strategy, understanding the Applicant Funnel is key to ensuring you make the right resourcing decisions.

The Rise of the Liquid Workforce

Gone are the days of the rigid organisational structure, today's forward thinking organisations are adopting a resourcing model that's much better at flexing and scaling.

What is a freelancer management system?

Discover what a freelancer management system is and how you can use it to effectively manage the freelancers engaged by your organisation.