REC’s latest Report on Jobs last week revealed that the growth of permanent placements has dropped to a seven month low while billings for temporary workers have reached a 13 month high. At the same time, the CIPD’s latest Labour Outlook Survey found that nearly half of employers have jobs that are difficult to fill.
This rise in demand for temporary workers (the so-called Gig Economy) is indicative of the overall challenge faced by many employers in bridging key skills gaps and the transitional nature of the jobs market. Deloitte’s 2016 Human Capital Trends report found that 42% of businesses expect the contingent workforce to ‘increase or significantly increase’ in the next three to five years.
The UK is seeing that increase in today’s employment sector.
The changing nature of contingent workers
Broadly two types of temporary workers exist:-
- The traditional view of a ‘temp’, ie, the short term zero hours contract workers hired through agencies in markets such as hospitality and retail – this market favours the employer.
- The gig economy – the new contingent workforce consists of talented individuals with very specific, sought after skills who are highly paid. This market is candidate driven.
HR’s ability to attract this latter group of workers will determine its competitive edge and achievement of company goals.
The changing nature of the contingent workforce is highlighted in a survey released by global recruitment agency PageGroup which found that a growing number of contingent workers now possess more skills and experience than permanent employees. Three quarters are qualified to at least degree level. Furthermore, this workforce is expected to be capable of working more autonomously and with more flexibility while at the same time assuming more responsibility.
70% of these professionals have over 10 years of experience in their market.
The skills shortage affects the majority of sectors, from banking and finance to IT and engineering but it is the fintech sector where it is most keenly felt. According to recruitment finance company Sonovate, demand for contract positions in the sector has risen by 64% quarter on quarter.
In order to attract qualified individuals, HR should treat contingent, or contract workers as they would their permanent employees during the talent acquisition process by adopting the following strategies:-
The hiring process : When hiring your contingent workers directly, manage your qualified candidates as you would a permanent hire. Evaluate the source of your most successful employees, understand what skills and attitudes fit the demands of your business most effectively by analysing your recruitment analytics. Fast track qualified or referred candidates through your applicant tracking system and ensure a positive candidate experience.
Creating your job advert : Sourcing the right person with the skills and culture fit to integrate within your team is vital. A disruptive contingent worker will have a negative impact on your existing employees and may hinder you from achieving project goals. Be realistic in your job advert; clarify what you are trying to achieve, the benefits of working with your organisation and present a clear picture of your company culture to attract the talent your business needs.
Be prepared to reward your contingent workers : Salary growth as a whole is experiencing downward pressure and is predicted to do so until the end of the decade according to the CIPD’s Labour Market Outlook. The exception applies to specialist contingent workers with the skills your business needs. Sonovate’s survey found that temporary positions are being advertised at an average rate of £430 per day, with tech roles attracting £460 per day. Be prepared to pay a premium for your contingent workers and keep in mind that a positive culture, flexible working and the opportunity to learn new skills and take on a challenge can compensate where higher salaries are not feasible. Keep in mind that high performing existing employees may feel overlooked by HR where contingent workers are brought into a company. Managing their integration within a team is the responsibility of HR.
Invest in onboarding : The PageGroup survey found that 58% of employers invest in onboarding training for their temporary staff. This should extend to all contingent workers in order to ensure the success of business crucial projects. A further survey in the Wall Street Journal highlighted that the average period for a temporary job assignment is 32 weeks. A final part of the onboarding process must comprise of background checks for all potential new employees.
Implement performance management strategies : Performance management is often regarded as the weak link in the Gig Economy chain. HR must abandon its traditional approach to performance reviews in favour of more effective strategies to maximise the success of contingent workers. This requires HR to have career conversations with all of its workers, including contingent and permanent employees to promote a more collaborative working environment.
Embrace HR technology : Hiring processes must be automated to monitor and track candidates, accurately pinpoint candidate roadblocks and minimise the administrative burden on HR. Three quarters of all employers regard HR analytics as ‘important’ but only 8% are confident in their company’s analytical abilities. Timely gathering and accurate analysis of data will enable your business to present a more powerful presence in a shrinking talent pool and make a successful transition into the Gig Economy.
On a concluding note, the Wall Street Journal also revealed that 90% of contingent workers never return to full-time work. The Gig Economy is here to stay. By 2020, it is forecast to be worth £2 billion to the UK market and over $60 billion globally.
Support your talent acquisition for all of your employees with recruitment software used to manage the talent management systems of some of the world’s leading organisations. Contact Advorto today.
For more detail on what the Gig Economy means to HR download our whitepaper The Rise Of The Gig Economy.
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