The U.S. workforce is at a precipice: Leaders are mandating return-to-office (RTO) policies, enforcing hybrid policies, or buckling down on remote work, and they are waiting to see how employees react. Pressure to maintain broad, consistent workforce policies is tied to executives’ quest to justify office space, have visibility into their workforce, and continue supporting their company culture.
Concurrently, more than 75% of organizations are struggling to fill roles, and companies are getting creative to remain competitive. Some leaders curate policy “micro-climates” to suit the different needs of roles and departments by tailoring workplace policies regarding remote, in-person, and hybrid work as well as tailoring jobs to be contract, full time, or outsourced. The result is a complex framework in which leaders are challenged to manage multiple, customized policies.
Workforce Fragmentation
Workforce fragmentation happens when an organization incorporates multiple kinds of workers, who may be divided by employment status (full-time employees, contractors, gig workers, etc.), location, union status, or job function. This fragmentation can lead to one organization holding workplace policies that vary across different roles and departments.
All of these different work policies can create a divided workplace, employee disconnect, and feelings of employee inequality. In a world of workforce fragmentation, organizations must make workplace policy decisions that are tailored to a particular need and situation.
"Workforce fragmentation is allowing companies to retain more employees — the added flexibility means organizations can increase their candidate pool, which is critical given the competitive job market we’re seeing right now."
Jim Link
SHRM-SCP, Chief Human Resources Officer
The Rise of Workforce Fragmentation
The U.S. workforce began to see a rise in contract work around 2007, thanks to technological changes and the Great Recession. Not long after, apps including Uber and Postmates were founded, kick-starting the gig economy. Startup establishments are estimated to have created more than 5 million new jobs in 2014 alone.
These economic shifts altered workplace dynamics. At many organizations, contractors pioneered full-time remote work, with some workers even based in a different geographic location than their office-based co-workers.
Contract work brought forth the first cracks in the foundation of unified workplace policy, followed by gig workers. The changes and challenges brought by these new categories of workers became more prevalent during the pandemic, when the world went remote in spring 2020.
In a 2022 study, 58% of employees reported having the opportunity to work from home at least one day a week. In 2023, in-office job postings decreased from 83% to 66%. And as of 2025, 88% of employers provide some hybrid work options (varying by job level), according to international consulting firm Robert Half’s benefits and perks survey of U.S. HR managers.
Companies are coming to understand that one size might not fit all for workplace policies. The intermix of policies means that it’s a genuine challenge to unify workers. This is one of many potential factors (including retention and engagement) prompting leaders to engage in conversations regarding in-office and leave policies. Fragmentation is not limited to location: Leaders must also decide when and how their employees are working.
“I’ve never seen business move as quickly as it is right now. We’re constantly reassessing and rethinking everything,” said Robert Hosking, executive director of the administrative and customer support practice at Robert Half.
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72% of CEOs expect an increased use of independent contractors, gig workers, and freelancers in the next 12 months.
CEO Priorities and Perspectives, SHRM
How People Work Is Changing
U.S. employers are addressing culture and retention challenges via bespoke strategies, including creating custom schedules to satisfy the specific needs of employees. In fact, 73% of tech founders and executives surveyed by A.Team and MassChallenge said they used blended teams of full-time employees and freelancers.
The A.Team and MassChallenge study found that more than 7 in 10 tech founders and executives (71%) reported that fractional talent offers greater agility during times of economic uncertainty for their businesses, and 67% said traditional hiring methods are too time-consuming and expensive.
For many companies, the process begins with a discussion of where people should work. On average, employees work from an office 30% less frequently than they had prior to the pandemic, a trend reflected by policy changes at major companies.
Citigroup opted for a policy under which employees work in the office three days per week. Performance evaluations are tied to attendance.
At Canva, workforce policies are role-dependent; employees are split between hybrid, remote, or onsite depending on team needs.
CareSource, a national managed care organization, opted for a hybrid policy suited to workers. This was significantly guided by its decision to recruit nationally during the pandemic. To be fair to employees who lived farther from the office while also prioritizing collaboration, the team landed on a hybrid work policy.
“We recognized that the strength of our success was built on our collaborative spirit, cross-functional engagement, as well as the relationships that are only built through physical proximity and partnering,” said Nichole Oocumma, who was previously the senior director of talent management and talent development at CareSource. “Other benefits included an ongoing investment in the cities where our offices were located. As a company built on community engagement, having individuals in-office was critical.”
However, the CareSource team opted to keep administrative roles remote and repurpose that unoccupied space into clinical offices, conference rooms, and collaborations spaces. In fact, the company set up an online space reservation system.
According to Oocumma, who is now the chief administrative officer at Northeast Ohio Regional Sewer District, going hybrid at CareSource meant the organization could consider job applicants who lived farther from the office and had longer commutes, giving the organization a larger pool of candidates to consider.
“Workforce fragmentation is allowing companies to retain more employees — the added flexibility means organizations can increase their candidate pool, which is critical given the competitive job market we’re seeing right now,” said SHRM CHRO Jim Link, SHRM-SCP.
Workforce fragmentation is also evident in how and when people work.
More than 1 in 3 participants in the U.S. workforce (36%) are gig, contract, freelance, and temporary workers, and that number is expected to rise, according to McKinsey & Company’s American Opportunity Survey. Having a fragmented workforce means that leaders are able to source a wider pool of talent with specialized skills for short-term projects. Agility and cost savings are big benefits. However, having multiple workplace policies can have significant downsides.
“This workforce fragmentation means we must ensure we’re aligned with state employment laws and providing workplace accommodations in remote environments where we don’t have as much insight to see what the issues are. We’re having to get better at communicating and being transparent about our HR policies,” Link said.
Another big challenge of workforce fragmentation is maintaining clear communication.
“There needs to be more thought put into ‘How do we maintain culture, grow culture, keep people connected if we are a fragmented team?’ ” Hosking noted. “I think for the most part, most people don’t really like working in silos where they’re all by themselves all day, every day, and don’t connect with or engage with anyone else.”
Given this unique blend of factors regarding workforce fragmentation, leaders need to make strategic choices with an eye to organizational priorities and goals.
“As a CHRO, we must recognize policies will constantly be changing. Create a policy handbook for your workforce, but be open to changing it to meet your business needs as things shift,” Link added.
Worker Classifications
- Full-time employees
- Part-time employees
- Temporary workers
- Independent contractors and contract workers
- Interns
- Seasonal workers
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Managing Flexible Work Arrangements
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The HR Impact of Workforce Fragmentation
According to SHRM’s CHRO Priorities and Perspectives report, 50% of CHROs said they expect there will be a rise in RTO mandates. That being said, these plans aren’t a panacea. RTO policies may improve workplace culture and streamline communication, but inevitably, individual workers require flexibility to accommodate personal or caregiving responsibilities, and not all roles benefit equally from in-person collaboration.
“Take the time to discuss with both the executive team and a sampling of the workforce to understand the thoughts regarding remote, hybrid, in-office,” advised Oocumma. “Although the decision lives with the executive team, having a full picture of the opinions of the stakeholders is important in the decision-making process.”
HR leaders are increasingly opting for frameworks that work best for their particular industry and individual teams, even if they need to craft context-driven policies that vary by role or location. Making these frameworks effective requires having leaders who focus on maintaining that employee-employer connection so that employees want to carry out your vision.
“Leadership engagement is so important — touching in with people and really understanding what makes this person tick and why would they want to be here. ... Those regular, ongoing connections help people feel part of the organization,” Hosking noted.
Policy variation is nothing new for global organizations, which have long navigated regulations that vary by jurisdiction and present compliance challenges.
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50% of CHROs said they expect there will be a rise in RTO mandates.
How CHROs Can Adapt to the Workforce of the Future
Today’s HR leaders are focused on agility, cost control, retention, and risk mitigation. All these factors are critical to a company’s bottom line, but where retention is concerned, the key is having the right policy for the right role. This involves talking to your employees and then assessing what policies may need to evolve.
When preparing for a fragmented workforce, here are a few things to remember: The decision for workforce fragmentation needs to be intentional and conveyed through a unified message.
“In no case will you make all employees happy,” Oocumma said. “Knowing that, stick with your decision. In time, frustration or concerns will settle, and a new rhythm of working will be established.”
Ways organizations can improve the cohesiveness of a fragmented workforce include:
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