The U.S. workforce is changing before our eyes, and many human resource departments are struggling to keep up.

Our professional lives were once fixed and absolute, but changing workforce dynamics are forcing companies to adapt to a shift in the paradigm — and the rise of the creative class. Our modern workforce now demands fluidity. Take baby boomers, for example. Most have lived their professional lives at one company, many working at the same business for over 15 years. But by 2020, there will be five generations in the workplace. Hiring managers who don’t adapt stand to leave their companies falling behind.

In today’s workforce, contract workers are the new dynamic group to watch for. These are workers who file their taxes under 1099 forms. In 2012, a whopping 92.6 million 1099s were filed in the U.S., up from 80 million in 2010. And the number of people who work as their own bosses has risen to 10.6 million in 2012, a 14% increase from 2001.

This means HR executives, talent management, recruiters and anyone else involved in hiring will have to re-evaluate their systems to find ways to accommodate this new class of independent workers.

In recent news, Richard Florida, professor and head of the Martin Prosperity Institute at the Rotman School of Management at the University of Toronto, and Joel Kotkin, presidential fellow in urban futures at Chapman University and a contributing editor to the City Journal, have been battling it out over what Florida calls the “Creative Class.”

Composed of 40 million workers, or 30% of the U.S. workforce, the creative class is the key to driving economic development in the post-industrial U.S., Florida says. And you can expect many of them to be contract workers.

Creative class workers fall into two groups. The first Florida calls the “Super-Creative Core,” which includes workers in occupations including science, engineering, software development, education, art, media and design. These workers hold 12% of all U.S. jobs. The second group Florida identifies is “Creative Professionals,” or knowledge-based workers in a variety of industries who use large bodies of knowledge — such as knowledge acquired from a college degree — to solve complex problems.

While resource-driven growth is still important to America’s economy, as David Brooks brought up in his recent column on the “The Axis of Ennui” in The New York Times and Kotkin’s report “America’ Growth Corridors: The Key to National Revival,” Paul Romer points out that “economic growth occurs whenever people take resources and rearrange them in ways that are more valuable.”

If companies want to accommodate these highly intelligent and creative contract workers, they have to adapt their human resources practices to draw them in first. Consider that 91% of millennials — workers born between 1977 and 1997 — expect to stay in a job for less than three years. That means they expect to have 15 to 20 jobs in their lifetime. What’s more: millennials will be about 50% of the U.S. workforce by 2020 and 75% of the global workforce by 2030.

Those numbers are huge, and will force businesses to re-think their hiring practices. Why? Millennials and contract workers of the creative class are what I like to call the “Most Valuable Employees,” or MVEs. They’re the workers who go above and beyond what they’re told to do. They’re the workers who drive revenue. They’re self-motivated and have an entrepreneurial, creative mind that pushes them to always look for the best solutions. They’re experts in their respective spaces. They’re the ones who Romer mentions.

The problem is that today’s hiring software is not designed to hire the most talented and valuable employee, nor is it suited for job candidates who were self-employed or contract workers. Major companies like Taleo, Workday, and Jobvite do a great job of filtering and managing the hiring process — this software allows HR managers to search resumes and cover letters for keywords and key phrases. But what if an MVE hasn’t updated their resume or included a specific keyword or phrase? They’ll be looked over.

In short, today’s hiring software doesn’t allow companies to really find the most committed and capable candidates. Shifting to new HR practices to accommodate these emerging MVEs won’t happen overnight. But companies need to be hyper aware of the paradigm shifts in the U.S. workforce if they want to succeed. If they don’t, they can expect failure as a certainty.

What do you think? How can leaders make changes to accommodate these new types of workers?

Joanna Riley Weidenmiller is the CEO and co-founder of The One-Page Co. She earned her bachelor’s degree in foreign affairs from the University of Virginia and lives in Beijing and San Francisco. Connect with Weidenmiller and One-Page on Twitter @1pagebiz, Facebook and One-Page’s blog.

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One Response to “Our changing workforce: The rise of the creative class”

  1. Thank you, Angie. Good luck!