The Future of the Extended Workforce: How a Tech Ecosystem Can Transform Talent Strategies

Utilizing technology to engage the extended workforce is nothing new. However, a growing reliance on independent contractors, freelancers, self-employed consultants and short-time staffing – combined with rapidly advancing tech tools – requires a more concentrated look at how we are serving these communities and the businesses that rely on them. With that in mind, Talent Tech Labs has unveiled its first-ever Extended Workforce Technology Ecosystem.  

The leaders at Talent Tech Labs have drawn on more than a decade of talent technology research to analyze and organize over 346 top vendors for the Extended Workforce Technology Ecosystem 1.0 — similar to their technology ecosystems focused on talent acquisition and talent management. Talent Tech Labs grouped these vendors into 16 verticals and 32 sub-verticals, focusing on the best technology for managing contingent workers and addressing the challenges businesses face when utilizing the extended workforce.  

Today, those challenges – flexibility, cost efficiency and access to critical skills – are magnified by global uncertainty, talent shortages and the rapid disruption from AI technologies. A workforce strategy supported by the right technology stack with advanced automation and AI-powered solutions can make your business more competitive, future-proof and adaptable to the continuously shifting market.  

The Extended Workforce Technology Ecosystem is a framework designed to guide workforce leaders toward the right technologies to engage contingent workers for the right roles, at the right cost. It organizes solutions into four clear categories – source, engage, select and hire – making it easier for enterprises to design strategies that unlock the full potential of their extended workforce. 

At the heart of this ecosystem are breakthrough AI solutions: AI recruiters, AI workers, fraud detection tools and conversational chatbots. Together, they represent the next phase in workforce transformation. 

A New Era for the Extended Workforce 

For several organizations, the contingent workforce comprises a significant percentage of their workforce, making it a business imperative that they have access to the most advanced extended workforce technology. This includes tools for sourcing talent, assessing their skills, onboarding and offboarding, as well as complete workforce visibility. 

Even organizations that may have focused on FTE hiring in the past are shifting their gaze to the extended workforce. In this report, 65% of companies say they plan to increase their use of contingent workers, while recent market research predicts a global increase of the gig economy market of 15.8% from 2025 to 2034 — a $2.178 trillion dollar increase.  

Essentially, businesses and their managed service providers (MSP) need to consider the contingent workforce in their overall workforce strategy and their technology stack plan to remain competitive. 
 

Four Trends Shaping the Extended Workforce Ecosystem

While this is Talent Tech Labs’ first Extended Workforce Tech Ecosystem, it certainly won’t be the last. As ongoing shifts and disruptions continue to shape – and reshape – the macroeconomic environment, they will continue to optimize and expand the ecosystem. The key to staying ahead is continually monitoring and analyzing the trends driving changes in the extended workforce.  

Operating in Uncertainty 

The macroeconomic environment has been anything but stable. From supply chain disruptions to inflationary pressures, organizations have been forced to adapt quickly. For many, contingent workers have been the first line of adjustment — often reduced before full-time employees. 

This volatility has also accelerated innovation. While mature categories like vendor management systems (VMS) and applicant tracking systems (ATS) remain slow to evolve, new entrants are challenging incumbents with agile, AI-driven solutions. These emerging vendors may not yet dominate global enterprises, but they are reshaping expectations and pushing the market toward greater adaptability. 

Breaking Down Talent Silos 

Despite years of advocacy for total talent management, many organizations still operate in silos — separating strategies, technologies and budgets for full-time employees and contingent workers. This fragmentation leads to duplicated investments, suboptimal strategies and poor visibility into workforce capabilities. 

Encouragingly, the tide is turning. More enterprises are beginning to integrate contingent workforce planning into their broader talent strategies. Procurement is no longer the sole owner of contingent labor; HR leaders are recognizing that extended workforce solutions must be part of the enterprise-wide talent conversation. This shift is unlocking opportunities to create skills-based organizations that view all talent – regardless of employment type – as part of a unified strategy. 

Addressing Fraud Prevention 

Candidate fraud has become a pressing issue in the extended workforce. From falsified resumes to foreign actors exploiting complex supply chains, the risks are real and growing. 

Technology is stepping in as the first line of defense. Identity management tools, AI-assisted proctoring and advanced fraud detection platforms are now standard practice. These innovations not only protect organizations but also ensure that hiring managers can trust the skills and experience presented by candidates. In many ways, the contingent workforce sector is leading this charge, as the most vulnerable part of the workforce for fraud concerns. 

AI is Changing the World (and the Workforce) 

AI is no longer a futuristic concept — it is here, and it is transforming how work gets done. AI workers are emerging as a new category within the extended workforce, offering enterprises scalable, task-specific capabilities. MSPs and recruitment process outsourcing (RPO) firms are beginning to integrate AI workers into client systems, enabling faster execution and measurable outcomes. 

Large language models (LLM) have democratized access to AI, making it easier for vendors to develop new solutions. Conversational AI tools are now being used for interviewing, screening and candidate engagement. Recruiters, sourcers and program managers are seeing their roles evolve as AI augments their capabilities. For workforce leaders, the challenge is clear: AI must be embedded into workforce strategy to remain competitive. 

The Four Stages of Hiring in the Extended Workforce 

The Extended Workforce Ecosystem 1.0 organizes vendors under the four stages of connecting with contingent workers, each designed to make incorporating the right tools in your tech stack at the optimal part of the process more effectively: 

Source – Finding Talent Where They Are 

• Job Boards  

• Programmatic Job Advertising 

• AI Recruiters  

• Talent Marketplaces 

• People Search and Matching 

Engage – Connecting with Candidates 

• Onboarding 

• Candidate Communications and Chatbots 

• Recruiter Marketplaces 

• Fraud Detection and Prevention 

Select – Assessing and Choosing Talent 

• Assessments  

• Interview Management  

• Background Checks and References 

• Labor Market Intelligence 

• Resource Management 

Hire – Managing and Monitoring Talent 

• AI Workers  

• Applicant Tracking Systems – Staffing  

• Contractor Payroll  

• Staffing Platforms  

• Direct Sourcing  

This structured approach ensures that business leaders can build a connected technology ecosystem that supports every stage of the contingent workforce lifecycle. 

A Perspective on What Comes Next 

The launch of the Extended Workforce Technology Ecosystem marks the beginning of a long-term shift in how work gets done. The vendor landscape is evolving rapidly, and the extended workforce supply chain is undergoing profound transformation. 

Challenges remain — integrating tools into seamless suites, ensuring compliance in shifting regulatory environments and driving adoption across the enterprise. Yet the opportunities are immense. By embracing AI-powered solutions and breaking down silos, workforce leaders can unlock new strategies, empower their people and transform their organizations into human enterprises built for impact. 

The future of work is not just about full-time employees or contingent staff — it is about designing a workforce that is agile, resilient and ready for whatever comes next.