The tech talent shortage is very real, and the vast majority of today’s CEOs believe it’s holding back their businesses. Eighty-six percent of organizations believe it’s hard to find skilled workers, while 53 percent report hiring unqualified people due to urgent need.
Vacant seats in information technology (IT) or other critical competencies can result in client turnover, slow product releases, information security gaps and overworked IT staffers. The talent challenges facing today’s firms are staggering, but there are solutions available to companies willing to think about hiring a little differently.
Why the Solution Isn’t Full-Time Employees
Last year, nearly half (47 percent) of small businesses reported they couldn’t find qualified candidates for certain postings. Looking to non-traditional talent pipelines is a matter of necessity in 2017. While organizations are wise to consider internal training programs and tuition reimbursement to fill positions internally, it’s not an immediate solution. The solution is contingent talent; pro contractors and freelancers with the necessary skills and experience who may not work permanently or 9-to-5 on-site.
Top organizations believe that non-traditional talent pipelines are more than just a stop-gap for hard-to-fill tech jobs. “Like every company, we want a diverse workforce, and for us that includes people who think differently,” states Ali Marano of JPMorgan Chase. Some of the best out-of-the-box thinkers your company can find may not be looking for traditional jobs.
What Is the Contractor Economy and Why Is It Exploding?
Over 14 million people have chosen a life of self-employment and contractor work with organizations instead of a traditional job. By 2020, experts estimate that 40 percent of the American workforce (that’s 60 million people) will log hours from a coffee shop or their kitchen table. Many of the pros dropping out of the workforce have more than just basic office skills under their belt. Increasingly, freelancers fit the description of a “supertemp,” Harvard Business Review’s term for talented developers, security experts, attorneys, executives and consultants who are self-employed.
Why? For many supertemps, it’s a preferred lifestyle. Millennials are notoriously driven by work-life balance and a need for purpose, and Brian Rashid of Forbes writes they’re choosing to use “mobile and technology to create ecosystems of work they enjoy.” Collaboration tools have enabled even highly team-oriented work to be done remotely, making physical attendance at the workspace optional for many others. Despite the need to self-pay health insurance, for many others, it’s simply pragmatic — more than half of the talented pros in the contracting economy earn more than they did at traditional jobs.
How Real Businesses Are Driving Value with Contractors
From a business standpoint, there are some real benefits to hiring contractors instead of full-time staff members. Organizations will typically unlock:
- Lower total costs, due to smaller administrative fees and insurance
- Flexibility in staffing projects by need, instead of available talent
- Higher worker productivity per hour
Forbes states that, in general, contractors are 20-30 percent cheaper than employees due to less administrative overhead. However, the greatest business benefit could be agility. Organizations can quickly execute on ideas, hire sought-after talent on an as-needed basis, and develop a culture of project-based work.
The value of contractors is becoming increasingly apparent in 2017, as organizations strive to develop flexibility and focus. General Electric and Procter & Gamble are two household names that drive value with freelancers, even offering dedicated contractor platforms for filling internal needs. The use of independent contractors isn’t even that uncommon — a Forbes study revealed that 96 percent of today’s organizations use contractors.
In the future, coffee shops and co-working facilities may be a lot more crowded than traditional offices. However, organizations with the wisdom to tap into the freelance economy are likely to cut a lot of overhead costs and win the war for talent.