According to Oxford Economics’ Workforce 2020 report, more and more businesses are turning to the contingent workforce to meet their needs: 41 percent of the survey’s participants said that their companies were increasingly using contingent workers, and 83 percent of executive respondents said they were finding new ways of using contingent workers and independent contractors in their workforces.
Miranda Nash, president of Jobscience, believes that a “supply-demand mismatch” — what others might call the “skills gap” – is partially responsible for the bustling contingent workforce. “The people that companies want to hire are not available, and the folks who are available don’t by and large have the skills that companies are looking for,” Nash says. “That is the core problem related to recruiting, and it’s one of the reasons why companies are turning more towards contingent workers.”
Nash also notes that contingent work has become more appealing to high-quality candidates. “Individuals — at least in the U.S. — have more confidence in their ability so secure and maintain healthcare, and that frees them to have a role or a job which is more flexible,” she says. “A lot of people really value that flexibility.”
At the same time that contingent work is gaining popularity with employees and employers alike, the rate of traditional direct hires is also increasing. In fact, the U.S. unemployment rate dipped to 5.9 percent earlier this month, with a payroll employment increase of 248,000 in September. “That’s very unusual,” Nash says. “Usually, those things [direct hires and contingent hires] work in opposition.”
What is an employer to make of all this? When contingent and direct hires are both on the rise, where should recruiters and HR departments be looking for talent?
Ask Nash, and she’ll tell you to look to the staffing agencies supplying companies with contingent workers.
Relearning How to Recruit
In some ways, we can think of the growth in contingent workers as the “failure of recruiting,” Nash says. That is, recruiting is supposed to put the right people in the right jobs, but it is not always able to do that these days. Thus, companies bring aboard contingent workers to fill the empty spots.
“It’s time to really rethink recruiting,” Nash says.
That isn’t to say that companies are wrong to use contingent workers. “Contingent workers work really well for some types of jobs,” Nash says. “For activities that are not at the core of your differentiation, it makes total sense to use contingent workers.” This includes roles that are easily measured and roles that need to be filled immediately.
That being said, direct hires are still necessary for organizational success. They cannot be completely replaced by contingent workers. If you try to use contingent workers to perform core activities, you “lose the ability to build culture,” Nash says — and a strong culture is crucial for any company.
Employers who are interested in learning how to better recruit in this day and age — so as to overcome the skills gap that could prevent them from fulfilling key roles and building strong cultures — have a lot to learn from their staffing counterparts, according to Nash.
“Staffing agencies — the ones that supply the contingent workers — are ahead of the game in terms of recruiting, and that’s why employers are getting the value they’re getting out of going with contingent workers and using staffing agencies,” Nash says. “Frankly, we don’t think that’s a bad thing. We just think that everyone — companies, staffing agencies — should recognize the supply-demand mismatch, and therefore change their approach to how they recruit.”
Nash offers three tips for companies looking to improve their recruiting capabilities:
1. Be Proactive in Your Recruiting
“It doesn’t work any longer to simply post your jobs on a job board or on your careers page,” Nash says. “To get the applicants that you need with the skills to fill those positions, you have to be proactively going out and finding those candidates.”
2. Think About How You Structure Your Recruiting Team
“Usually, recruiters try to fill the open positions as they come up, and they’re acting in a very short-term time window,” Nash says. “When you’re being proactive, you really have to have people who are dedicated to that really important task that aren’t affected by the immediate. Otherwise, as we know, the immediate will always trump the important.”
3. Think About How Recruiting Directly Relates to Driving Revenue
“In the knowledge economy — and any kind of business that is driven by brainpower and talent — it is very much the case that, if you can’t hire, you can’t grow,” Nash says. “Making that business case is kind of a new thing for a lot of HR people, but it’s a message that resonates really well with the C-suite.”