By Kalwant Gill, Founder of PatchworkQuilt
The Subscription Economy grew revenue nine times faster than S&P 500 company revenues over the last few years. And a recent YouGov study showed that 40 million Brits (78% of the adult population) are now subscribing to at least one product or service. It’s clear that there has been an irreversible shift in how we pay and, more importantly, how we chose to consume.
The Subscription Economy and the world of “on-demand” is therefore here to stay. Companies that know this and are gearing up for the change are the ones that will survive in the next 5 years.
It is not sufficient, however, to only tackle changes in consumer behavior through technological investments. Organizations need to fundamentally rethink how they resource in an “on-demand” world. As consumption rises and falls, resources need to scale up and down quickly. Geo-political uncertainty, fluctuating currencies, global uncertainty and rapid shifts in consumer trends mean that the “right” resources need to be in place at the right time, in the right countries.
On the employee side, more and more of us also want to work flexibly. When asked, 72% of all millennial said they ranked flexibility above remuneration when choosing where to work and 46% of us want to work flexibly (source: Office of National Stats). Here, the term “flexible” has a wider definition than remote working. It encompasses portfolio, contracting, remote, global and “Borrowed Brains™”.
Flexible employment methods are therefore key in a subscription world. Organizations that offer flexible working, attract the cream from the talent pool, have lower fixed costs and an agile workforce is better equipped to rapidly penetrate new markets.
The same goes with diversity. An increasingly diverse, networked global marketplace needs an equally diverse, global, internal workforce to match. Pre-empting customer demand is achieved by having deep customer empathy. Having access to a diverse employee base with a good mix of age, gender, socio-economic background, thinking style, ethnicity, etc will help stabilize revenue, reduce churn and accurately predict global market trends.
Diversity, therefore, is no longer a subjective, nice to have, compliance issue. It is a key competitive advantage.
So what are the challenges companies face when moving to this new way of working? My work has led me to summarize the issues into three broad categories:
- Changing “stubborn” internal mindsets: Many managers still believe employee commitment is reflected by working a traditional “9-5”. This worked when commutes were different, the cost of living was different and the way of life was different. To illustrate the point, Vodafone carried out a global survey last year involving 8000 employers. They found that 22% of managers believed employees would not work as hard if they weren’t full-time. 61%, however, reported an increase in profits and productivity when introducing flexible working arrangements.
- Managing with Diversity: Part of the “sticky” mindset issue stems from a lack of training on how to integrate and manage a diverse/ blended, workforce. Managers hire homogenous teams to create team cohesion. They have an idea of what a “perfect employee” looks like and strive for members to meet this hypothetical benchmark. Getting access to good training that acknowledges difference can help alleviate such issues.
- Access to the right talent at the right time: Ensuring companies have access to an abundant pool of top talent is a tricky business. Here companies need access to a large pool of diverse talent to ensure their needs are met at any one time. Having specialists to help to navigate the complexities around flexible employment is, therefore, crucial.
In summary, diversity and flexibility are key ingredients in a subscription world. Getting this right, not only provides resource agility and lower costs but helps accurately predict the buying patterns of your customers, ensuring business continuity and market differentiation.
Read about Kalwant Gill’s session at Subscribed London –“The Diversity Equation: Solutions for Positive Change” and join us for a diversity-focused breakfast at Subscribed, San Francisco in June – register now!