Globally, the transformation consulting industry is worth £23 billion, with tech and digital consultants accounting for 8 per cent of the total, which translates into £720 million in the UK alone – making this a significantly sized market to tap in to.
So why aren’t businesses looking at resourcing this talent? When you consider that most companies are struggling to find the competencies they need to keep their businesses running, it’s a good question. In the UK, it’s the large companies which have the most difficulty filling job vacancies – with 50% of employers experiencing talent shortages. While large companies only account for 0.1 per cent of businesses in the UK, they employ 40% of the total workforce, according to the 2018 Talent Shortage Survey. We are starting to see the same trend with mid-sized organisations.
This only goes to show the significant impact this talent shortage will have on the wider labour market. And yet, even in light of this, companies still have a bias towards recruiting from the traditional labour force, without considering the alternatives available to them if they would only look to the flexible labour force.
It ultimately comes down to a matter of culture and mindset. So many are entrenched with the ‘it’s ‘how we do things around here’ mantra: thinking it’s probably better, just because that’s the way the business has always done it. But in reality, average tenures for full-time employees are declining, approximating those of contractors.
Bottom line is, businesses should not be concerned about the type of contract a candidate can be hired on. They should be thinking, who’s best for the job?
Reverse Brexit? What are the implications for UK tech?
There’s no denying that the talent shortage is real, but it’s even more real if, by default, you cut yourself off from hiring from the full pool of talent. Fact is that an increasing number of the best-skilled people within their areas of expertise choose to work independently. Because they want greater freedom and flexibility. But the perceived downsides of hiring a contractor instead of a full-time employee are in many cases deterring companies from dipping their toe into the flexible talent pool. However, it’s important to remember that mostly, these perceived downsides are just that: they are perceived, not real.
One of the most common misperceptions is that employing freelancers and independent consultants will result in a loss of knowledge. With the average tenure of full-time employees decreasing, this concern actually prevails with permanent employees as well.
But businesses shouldn’t worry.
Ensuring knowledge stickiness is a matter of integrating the person into the team, allowing their knowledge and competencies to spill over to their team-mates. As long as this is encouraged, knowledge will be absorbed in the organisation, leaving it better off than before. Regardless of contract type.
Will Brexit really make a difference to this landscape?
Amidst the changing and uncertain times of pre and post Brexit, freelancers will come to play a very central role in the British economy, as UK companies will become even more dependent on local workers. Thus, freelancers will likely be in higher demand, and the rising trend will continue. Since 2009, the freelance economy in the UK has increased by 25% and generates about £109 billion a year, according to IPSE. The number of self-employed workers has increased from 3.3 million in 2001 to 4.8 million in 2017, according to the Office for National Statistics (ONS).
As a consequence of Brexit, many business leaders could be faced with having to overcome the challenge of talent flowing out of the country. Therefore, businesses will become even more dependent on their local workers.
At this point, a company’s competitiveness will depend on its ability to attract talent. As shown by the statistics, fewer people than ever before want to be employed in traditional full-time positions, and so traditional retainment thinking won’t cut it. Businesses will have to think of talent recruitment in terms of access, not ownership.
Brexit skills shortage could accelerate job automation in the UK
What businesses can do to futureproof themselves
Setting yourself up for the future is all about making a shift in corporate mentality. As mentioned, businesses have to think about recruitment in terms of access, not ownership, and it’s the business leaders who will have to lead that change.
Future-proofing is about creating an organisational culture that is open to external talent. This is crucial to remain competitive in an ever-changing environment.
This also means that businesses will need to have a framework in place that will steer them on how they should attract and manage freelancers. Freelancers are inherently drawn to companies that provide great employee experiences. And so it’s essential that business leaders must focus on on-boarding and integrating freelancers into the workflow and the organisation’s culture.
Which way? Full time or freelance?
Full-time employees and freelancers each add value in distinctly different scenarios.
Hiring a full-time employee makes sense, whenever the tasked to be solved is:
- The role displays some level of variation
- Competencies needed are fairly broad
For example, you would need a CEO to be a full-time employee: That person would likely be employed to lead the company on the long-term and take part in monitoring the company’s economic performance, performing stakeholder management, and speaking at events.
Rise of the IT freelancer
Freelancers hold the advantage over in-house employees whenever the task to be solved is:
- The role is very finely scoped
- Demands specialised competencies
For example, you wouldn’t need an app developer to be a full-time employee. The same goes for a deep learning specialist, a GDPR consultant, or an SEO specialist. That person is more likely to be hired for a specific time period, to solve a specific task for which they have specialised capabilities. Then, when the job is done, they are gone. For now at least. In this kind of scenario, it makes more sense to hire a freelancer.
As the Brexit story unfolds, and as the IT and digital workforce shifts its mindset and demands a more flexible future of work, businesses may find themselves struggling to find any candidate willing to work full time, period. And so to stay ahead in the race for talent – come what may after March 2019 – isn’t it smarter to open our eyes now to the flexible talent pool to source exceptional, local skills – which are, in fact, in abundance here in the UK, and already within reach?
Written by Morten Petersen, CEO and Co-founder, Worksome