Three compelling reasons to deploy a blended workforce: The “why” of on-demand labor

By Shawn Fields

This article is the first in a three-part series about blended workforces. This series will cover why blended workforces make sense for many businesses, what a blended workforce looks like for field service, and how to deploy a blended workforce. Our approach is inspired by the principle of The Golden Circle developed by management expert and author Simon Sinek.

Blended workforces—with a mix of automation, full-time staff, subcontractors, and on-demand workers—are not a new concept. But the trend toward blended (or hybrid) workforces has dramatically accelerated in the field service industry. What’s driving this massive change?

Let’s dive into the top three reasons companies are shifting toward a blended workforce.

Current market conditions require flexible staffing models

The U.S. labor market remains tight, with job openings and worker turnover hovering near the highest levels on record. According to the U.S. Labor Department, there are currently almost 11 million job openings. 

Similarly, the “Great Resignation” has been in the news for over a year. Workers continue to quit in record numbers, and employers struggle to fill open positions. Additionally, we’re now seeing the effects of the “Silver Tsunami,” a deluge of skilled Baby Boomers leaving the workforce. According to the TSIA, 46 percent of field service employees in North America are over 50 years old. On the other end of the workforce, the Service Council reports that 60% of field service engineers aged 26 to 40 aren’t sure they’re going to remain in the profession. 

What’s more, inflation is now at a 40-year high, leading to increased wages and labor costs. Combined, these shifts in labor trends and accompanying economic indicators mean that service delivery leaders face enormous challenges meeting their current staffing needs. 

Thanks to automation, you’re already using a blended workforce 

Finding the most efficient, effective, and least expensive source of labor isn’t a new concept. Even if you don’t realize it, you’re already evaluating which labor source to use when assigning work.

Most businesses have increased their reliance on automation to run units of work previously assigned to humans. That’s because automation works 24/7, doesn’t make mistakes, deploys faster, and is much less expensive than a full-time resource.

For that reason, technologies like artificial intelligence, machine learning, and robotic process automation are becoming increasingly prevalent. Industry analysts have predicted that these technologies will allow 50 to 60 percent of typical service calls to be solved without human intervention by the end of 2022. 

You can apply the same principle to other component parts of a blended workforce, i.e. work that cannot be automated. If work can’t be automated, evaluate the best remaining labor source based on the parameters of the work—whether that means using full-time employees, subcontractors, or on-demand workers. In other words, let the work determine the workforce.

A blended approach can help you build a competitive advantage

Blended workforces are essential to optimizing service delivery. Companies can reduce labor costs by adding on-demand workers to the labor mix, typically by 30 to 40 percent over full-time workers. Also, moving work from subcontractors to on-demand labor has shown savings in the 15 to 20 percent range.

In addition to improving profitability, a blended workforce can enhance the output of your employees. By augmenting your in-house team with on-demand resources, you can allocate employees to higher-value projects with greater client impact. This type of work also increases the “revenue per tech per day” metric, which we’ll discuss in greater detail in the next article.

Not only can a blended workforce help you control costs, it can also boost revenues. That’s because companies that use blended workforces are better positioned to respond to spikes in demand, particularly in a tight labor market. Very simply, you can deploy resources more quickly using blended resources than the longer timelines needed for the recruitment, training, and deployment of full-time resources.

In contrast, companies that don’t adopt a blended workforce will likely find themselves at a competitive disadvantage. Due to staffing shortages, businesses will likely be unable to meet client demand if they rely solely on full-time employees. What’s more, they will be at a cost disadvantage as the rising cost of salaries, benefits, insurance, equipment, training, office space, travel, and administration eat into profits.

Want to discover the right labor mix for your business? Contact our team for more insights into aligning your workforce with current market trends.