by Brianna Crandall — December 26, 2014—Organizations around the world are rapidly reshaping their workforces with a complex mix of internal teams and external talent, outpacing their ability in many cases to effectively manage costs, performance and decision-making, according to new research from the American Institute of CPAs (AICPA) and the Chartered Institute of Management Accountants (CIMA).
Organizations are increasingly relying on consultants, contractors, freelancers and outsourced providers as they seek greater operational flexibility and agility in developing new ideas, according to a survey of more than 1,100 senior executives across 35 countries by Longitude Research on behalf of AICPA and CIMA. This shift to the “open workforce” is expected to accelerate in the next five years, with more than a third of those surveyed expecting at least half their workforce to be made up of such external talent by 2020.
Many organizations are encountering significant challenges as they adapt. Only about two in five executives surveyed said that their organizations have high levels of oversight on the cost, performance and productivity of the external resources they use. They face risks of data breaches and disclosure of competitive information, and struggle to maintain consistent quality decision-making at all levels. It is also particularly difficult to strike the right balance between control and empowerment. Nearly two-thirds, 62 percent, said they are struggling to get the mix right or feel that they have it wrong.
Charles Tilley, FCMA, CGMA, chief executive of CIMA, commented, “The converging forces of globalization, digitization and market flux have given rise to a powerful new force — the open workforce. This trend holds the potential for new levels of agility, creativity and cost savings, but most organizations aren’t yet equipped with the controls and practices necessary to maximize opportunities and offset risks. Management accountants must play a critical role in creating the frameworks and discipline required to unite today’s disparate organizations and their more fluid workforces.”
The global survey showed strong interest in deeper engagement with the finance team. Nearly nine in 10 executives said that a closer partnership with finance in the decision-making process would help them better manage their organizations in the coming years. The same majority also want a better process to pull insight from financial and non-financial information and a way to model value creation to make the benefits and risks of opportunities clearer.
While all organizations are struggling to find the right balance, executives who said their organizations are outperforming their peers also showed higher propensity for leveraging the open workforce. Among other factors, high-performing organizations are better at balancing control and autonomy and are more likely to have the tools, strategies and frameworks in place to manage these complex structures.
The report, New Ways of Working: Managing the Open Workforce, is available from the Chartered Global Management Accountant (CGMA) Web site, the joint venture of AICPA and CIMA.
