An agile workforce is a team of employees who can quickly adapt to changes in business needs, market conditions, and technological advancements.
The key characteristics of an agile workforce include flexible work arrangements (remote, hybrid, and contract-based), cross-functional teams that shift based on project needs, continuous learning and upskilling to meet evolving demands, and technology-driven collaboration and workflow adaptability.
Agile workforces don’t just happen. They are created through a strategic talent acquisition strategy that supports company goals.
Traditional workforce vs. agile workforce
Most organizations combine elements of traditional and agile workforces. However, for illustration purposes, it is helpful to see the features of each approach. The following table captures their differences.
| Feature | Traditional workforce | Agile workforce |
|---|---|---|
| Work structure | Fixed roles and job descriptions | Fluid roles with employees shifting based on projects |
| Decision-making | Hierarchical, top-down management | Decentralized, employees have more autonomy |
| Flexibility | Set schedules and office locations | Remote work, hybrid models, and flexible schedules |
| Talent acquisition | Long-term, role-specific hiring | Skills-based hiring, gig workers, and freelancers |
| Learning and development | Periodic training, often employer-led | Continuous learning and upskilling based on industry needs |
| Technology use | Limited to standard tools | Heavy reliance on digital collaboration and automation |
| Adaptability | Slower to adjust to market changes | Quick to pivot based on real-time business needs |
| Collaboration | Departmental silos with limited cross-functional work | Highly collaborative, cross-functional teams |
Pros and cons of each model
Decision-makers in an organization should understand the advantages and limitations of traditional and agile workforce design approaches. The following comparison highlights business considerations for determining which workforce model—or combination of models—best supports a company’s goals and values.
Traditional workforce: pros and cons
Traditional workforces offer several benefits, including stability for employees who know what to expect each day, clear job roles with specific duties, and career paths that make advancement within an organization predictable.
However, traditional workforces have drawbacks, such as struggling to adapt quickly to changing business needs or market conditions. They may also maintain rigid work environments with fixed hours and locations.
Agile workforce: pros and cons
An agile workforce enables companies to make decisions faster, generate more innovation, and scale their teams up or down as business needs change. Teams can respond to market shifts without delay and tap into talent from across the globe when needed.
That said, companies with agile workforces may struggle to maintain their culture when employees work remotely or move between projects frequently. These organizations face challenges retaining talent, as they might leave for opportunities that offer even more flexibility or higher pay for their specialized skills.
Key components of an agile workforce
Flexible work models
A common trait of an agile workforce is a flexible work model. A company’s talent might work remotely or in a hybrid setup, coming to the office as needed or on occasion. Email, Slack, Microsoft Teams, Zoom, and other cloud-based tools promote real-time communication among distributed teams.
In addition, a company with a flexible work model might use gig workers, freelancers, and contingent workers (also called temps) as part of the workforce. For example, Uber, Lyft, and other ridesharing companies offer flexible work for their drivers. In most locales, drivers are gig workers classified as independent contractors. They set their own hours and schedules and can work as little or as much as they want.
Cross-training and upskilling
Cross-training and upskilling employees are typical practices within an agile workforce. Training employees in multiple areas increases their adaptability and enhances skill mobility, preparing them for the future.
Decentralized decision-making
A hallmark of an agile workforce is decentralized decision-making. While top-down mandates from the company’s upper echelons may still occur, employees are also empowered to make decisions for their teams without the interference of excessive bureaucracy. In particular, teams are free to operate autonomously, which drives faster deliverables.
Done right, decentralized decision-making can improve a company’s position in the market. A 2022 Massachusetts Institute of Technology’s Center for Information Systems Research survey found that “large, established organizations gain a competitive edge when they decentralize decision-making.” The author warned that this is only possible if “senior leaders set strategic objectives for the organization but empower most of its teams with the authority and accountability to decide how best to achieve those objectives.”
Technology and digital tools
AI and digital tools are the backbone of an agile workforce, automating routine tasks and streamlining workflows across teams. Project management platforms like Asana and Trello help teams track progress, assign responsibilities, and meet deadlines without constant meetings or back-and-forth over email.
Meanwhile, AI assistants can handle scheduling, data analysis, and other time-intensive tasks, freeing employees to focus on higher-value work.
Why an agile workforce matters
The following benefits demonstrate why businesses across industries may adopt agile workforce models.
Business resilience
An agile workforce enhances business resilience by enabling organizations to respond swiftly to economic shifts, industry disruptions, and global crises like the COVID-19 pandemic. When conditions change unexpectedly, agile teams can pivot, reallocating resources and adapting processes without lengthy approval chains or rigid structures holding them back.
For instance, in early 2020, Zoom rapidly scaled its infrastructure by partnering with AWS, Oracle, and others to accommodate a massive surge in users. In December 2019, 10 million meetings occurred daily on Zoom, and by May 2020, there were 300 million daily Zoom meetings. While there were issues with the rollout, like “Zoom bombing,” the company’s ability to pivot swiftly during a global crisis enabled it to meet unprecedented demand.
Competitive advantage
Agile organizations can innovate quickly and meet changing customer demands. Companies with agile teams can develop and launch products faster, adjust strategies based on customer feedback, and pivot when market conditions change.
For example, Netflix transformed from a DVD rental service to a streaming platform and then to a content creator. Rapid evolution was possible because its workforce could adapt to new business models as technology and consumer preferences changed.
Talent retention and attraction
Organizations with agile workforces attract and retain talent by offering flexibility, skill development, and opportunities to work on diverse projects. The effect of flexible work arrangements is profound. According to the 2022 Winter Future Forum Pulse survey of 10,000 office workers in the U.S., Australia, Japan, France, Germany, and the U.K., “Employees with full schedule flexibility report 39% higher productivity scores than those with no ability to adjust their working hours.”
Scalability
Businesses can expand or contract workforce capacity based on demand, reducing operational costs. For example, many retailers and hospitality companies hire temporary workers for peak seasons.
Challenges of managing an agile workforce
Organizations seeking to improve their workforce agility must move beyond traditional workforce models. That said, agility is not a catch all solution. Its significant drawbacks that, if not managed strategically, can hamper organizational growth in the long run.
Maintaining company culture
A highly flexible workforce may struggle with cohesion and shared values. When employees shift between projects, work in different locations, or collaborate with various team members, the sense of shared values and practices can weaken over time. This is especially true when a company’s talent includes a mix of permanent employees, contingent or temporary ones, and freelancers.
Ensuring compliance and legal considerations
Managing a blend of full-time and contract employees, along with freelancers and gig workers, requires careful legal oversight to comply with labor laws. In 2000, Microsoft was famously forced to pay $97 million in compensation to workers and in legal fees for misclassifying permanent employees as temporary, thus preventing them from enjoying company benefits like stock options.
Balancing organizational stability with workforce flexibility
Overreliance on an agile model may lead to job insecurity and retention issues, which can erode an organization’s stability over time. And too much autonomy can hamper the organization’s overall productivity and lead to duplication of efforts.
For instance, the “Spotify model” of the music streaming platform failed largely due to excessive team autonomy and difficulty collaborating across teams. Finding a balance requires clear communication channels, established performance metrics, and strong leadership that can provide direction without micromanaging work.
Technology and security risks
A decentralized, tech-reliant workforce requires strong cybersecurity measures to prevent bad actors from accessing company data, including trade secrets and customer information, among other sensitive files.
FAQs
How can an organization create an agile workforce?
The following strategies provide a framework for moving away from traditional workforce practices and toward building an agile workforce.
- Adopt a skills-based hiring approach. Instead of rigid, role-based hiring, focus on hiring adaptable, multi-skilled employees.
- Encourage a culture of continuous learning. Provide training, mentorship, and career development opportunities to employees.
- Emphasize collaboration and communication. Use agile methodologies like Scrum or Kanban to improve team workflows.
- Invest in workforce analytics. Use data-driven insights to assess workforce agility and skill gaps.
- Leverage external talent. Incorporate freelancers, gig workers, and consultants to enhance the organization’s adaptability.
How can an organization with an agile workforce remain compliant with labor laws?
Microsoft’s misclassification of workers some 25 years ago is a lesson on the importance of following labor laws to the letter. Large corporations tend to have in-house counsel to guide their approach to hiring a mix of permanent employees, temps, and freelancers. Small to mid-sized businesses usually contract with a third party for legal guidance. However, small to mid-sized businesses may need to partner with an expert third party for guidance on how to remain compliant, especially if they are considering entering international markets.
An agile workforce across the globe
A business with an agile approach may seek international talent to scale quickly and gain a competitive advantage in a new market. To enjoy the benefits of international talent with fewer risks, agile businesses can forgo setting up a business entity in a new country and instead partner with an employer of record (EOR). As an EOR, Velocity Global assists businesses with HR needs in over 185 countries, including country-specific onboarding. Contact us to learn more.
