Most analysts suggest that the talent shortage will continue, and most small businesses have turned to freelancers to fill staffing gaps. Executives realize that talent can come from a variety of sources and the number of temps, freelancers, contractors, and other nontraditional employees has officially expanded to almost 40% of the global workforce, creating a new “gig economy”.
This isn’t new as the Gig Economy has been steadily growing for over a decade. What is new is the speed of adoption, as small and large businesses alike look to new workforce models to fill open positions.
The staffing industry has been responding to this shift by growing its supplies of independent talent. Just as tech revolutionized car rides (Uber and Lyft), similar tech solutions are upending the way companies find talent. This was happening pre-pandemic and has steadily accelerated since – especially with the adoption of virtual work options for knowledge workers.
Staffing Industry Analysts’ (SIA) North America Staffing Company Survey 2019 found that one in eight staffing firms are either partnering with a human cloud service or own or have invested in one. Another 34% were “considering building, acquiring, or partnering [with a human cloud service] over the next 2 years.”
That was prior to COVID.
Now as companies face supply shortages and talent gaps, staffing companies who held off defining a freelance talent strategy in 2020 to adjust to the global pandemic, are now wondering how to capture a share of the expanding freelance marketplace.
As a leader in the Gig Economy, ResultsResourcing has almost a decade of experience and research on how Staffing Companies can simply respond to or, better, capitalize on the freelance marketplace.
We’ve boiled it down to 3 strategies: Beg, Build or Buy.
1. BEG Clients to Hire Full-time Staff:
Ok, begging is a bit extreme, but hear us out.
It’s a hard market for staffing and firms are busy with traditional placement. Doubling down on existing recruiting strengths, many sales organizations in Staffing Companies are encouraging clients (some may even feel like begging) to consider hiring full-time resources, even though clients are actively pursuing freelance options, especially when the skill need is not full-time or requires short-term, specialized skills. Although this traditional focus may work short-term, it is not sustainable and is not in tune with hiring trends.
The freelance work movement is here to stay, accompanying The Great Resignation and Quiet Quitting. In the latest study by MBO Partners, companies reported that contingent labor already makes up 28% of their existing workforce. Seventy-seven percent (77%) of companies in the survey expect use of independent workers to “increase substantially (33%) or increase somewhat (44%) in the next 5 years. In another recent annual study by Upwork, “Of those who hire independent talent, 85% say that working with independent talent allows them to access specialized skills or expertise. Seventy-nine percent (79%) agree that working with independent talent has enabled their business to be more innovative.”
2. Build a Freelance Strategy or Platform:
Some Staffing Companies are building a freelance talent strategy and for good reason. We’re in the middle of a massive workforce regeneration, as Baby Boomers retire in record numbers, and younger generations PREFER freelance work. A study by FinancesOnline reported that “63.6% [of freelancers] are under the age of 34. Moreover, 39% of freelancers are under the age of 24.” The work habits of younger generations will also ultimately drive change in employment methods as they takeover leadership roles in time.
In addition, the advance of many freelance platforms makes it easier, more convenient, and some would say more effective, to find great freelance talent. Some are independent freelance job platforms. Other online job/talent platforms consolidate data about job openings from staffing firms and hiring organizations and spread the postings out to various job markets. These platforms house the data and capacity to become (or are) a direct source of talent for employers. These platforms are now becoming fierce competition for Staffing Companies.
A real solution is to PARTNER (link to Partner Page) with a reputable freelance platform that can co-brand or white label its offering for your brand. We believe so strongly in this win-win model that we developed a partner program just for Staffing Companies who want to stand up a powerful freelance business unit and leverage their recruiting expertise without the expense of building a platform on their own.
3. Buy a Freelance Platform:
The last option to explore is purchasing a freelance platform. This is certainly a viable option, as long as the platform matches your current staffing strategy. Does your firm specialize in a certain type of talent, such as IT, marketing, or finance professionals, executives or the trades? If so, acquiring a freelance platform with the capabilities to meet the needs of those talent markets is essential.
The second factor to consider is the ease of implementation with your existing operations and technology.
- Can your talent team quickly integrate, so you don’t need separate recruiters?
- Will the system allow you to leverage technology to find talent, but also incorporate the human element required to make a great match?
- Will the system pool talent, enabling access across business units or locations? Global vs regional or local?
Whichever direction seems best for your Staffing Company, developing a strategy to participate in and leverage the freelance marketplace, as hiring clients already are, will be a critical growth component this next decade.
