Gene Zaino, President & CEO of MBO Partners; Jeffrey Leventhal, CEO and Founder of Work Market and David Willard, CEO and Founder of Stillwater Human Capital discuss the independent workforce and its impact on companies for talent on demand.
The independent workforce is a lifestyle that both people and companies are embracing. The idea of going through a 20-year career, of waiting for retirement and pension to come is not so appealing anymore, when the ability to work for multiple organizations at the same time has become a really interesting lifestyle choice for most people. Companies have also become less committed when it comes to shelling out long-term capital for a position, especially when today’s marketplace sees a lot of companies needing to be able to change things up quickly. These days, companies are always on their toes, constantly looking around at the competition especially since it is now coming from sources other than direct competitors. The fact that they are also dealing on a global scale adds to the pressure. This is causing a hesitation to commit to a fixed cost structure associated with hiring a full-time employee and giving rise to buying work based on projects and deliverables.
The independent workforce is comprised of different groups of people with a variety of backgrounds. The industry allows these people an opportunity for a more flexible career. As an independent contractor, they can work for different companies, and try out different kinds of jobs. People choose to work on a contract for a number of reasons. Sometimes people move, sometimes it’s a lifestyle change. Sometimes a spouse’s job moves them around, so the other one is on the job market as a freelancer.
Full-time vs Project-based Work
Talent on demand contractors tend to specialize in what they are really good at. This allows them more flexibility to make more money by providing a fixed price for value rather than charging by the hour. The latter puts the contractor at a disadvantage, because he or she can be compared to another talent that is also based by the hour, who is located halfway around the world and willing to work at a much lower hourly rate. Contractors who choose fixed price work could also focus on their areas of expertise. They could bring both experience and intellectual capital to the client and say, “For $50,000, I’m going to deliver you high-quality work, and it doesn’t matter how long I need to do it.” This benefits the independent contractor, too. By going down the specialist road, as compared to being a generalist, they get to do the kind of work that they love to do. They will focus on that type of work and be able to deliver it more efficiently because that’s all they’re doing and working on.
Companies will also prefer this line of work because they will know instantly how much the cost is going to be. As a result, they don’t have to hire for a full-time position; instead, they are buying the work instead of buying the person. This is a win-win situation for both the company and the independent worker. The contractor’s ability to specialize, and the need of companies to be more agile will create a harmonious working environment. Companies see there are advantages want to buying project-based work as opposed to hiring for positions. This does not mean that they’re not going to hire for positions any longer, because there will always be that core group of employees who is going to be part of your institutional workforce. But on the edges and in the gaps there can be your independent workers.
When we talk about talent on-demand , we also need to talk about candidate engagement. There’s a life cycle for the recruitment process and all sorts of activities that happen before the individual becomes either an employee or an independent contractor. You have to have that person prequalified and assessed quickly before they become either an employee or an independent contractor. Also when we talk about on demand talent, it’s not only finding the right person at the right time. It is also about finding the right person and staying engaged with that person, whether it is for 60 days, for 6 months, and even longer, until such time when you will need their services again. You never know when you may have a need for that talent and you want to make sure it is readily available when the time comes so curating and staying engaged with the talent before you need it can be a critical component to a company’s on demand talent management strategy.
Companies are also better leveraging technology, and they’re relying more heavily on it to do the reporting and the brand push. When the time comes to make the hiring decision, you’re reducing the time to fill the position, because you’re already engaged and you already have the qualified people onboard. Technology is taking a lot of the superfluous manual business processes out of the equation in order to lower the cost and decrease the hiring/engagement cycle.
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