The Gig Economy: Generations of Talent Up for Grabs
by Kristina McMenamin, on May 16, 2017
How many people do you know who play some kind of role in the gig economy? The likelihood that a friend or family member finds writing work on Upwork or branding work on squadhelp, makes jewelry to sell on Etsy, drives a Lyft, rents out their home on Airbnb, or uses their CPA license to help growing businesses manage their finances on Paro is rapidly increasing. In fact, a recent study predicts that by 2019 independent workers could make up to 50% of the workforce. At the same time, traditional companies are struggling to find talent. What gives?
The state of independent work, contingent work, gig work, agile work (or whatever else you want to call it)
According to a recent McKinsey survey of more than 8,000 workers, 20 to 30% of the working-age population in the United States engage in independent work. Those who do independent work by choice--approximately 72%--are happier in their work lives than employees… and this applies across countries, age, income, and education.
In the United States, the survey shows that more than half of working millennials under the age of 25 participate in the gig economy. Seniors (65+) aren’t that far behind; while they only make up 8% of the overall independent workforce, 44% of those who are working are in some part doing so through the shared economy.
So what does this mean? There is so much talent out there of all ages, industries, and education levels, but they are choosing flexible work schedules and independent lifestyles over the structure of the companies who are in desperate need of them.
The talent gap
A recent report by Randstad surveyed finance and accounting business leaders who said they are understaffed by 13% and that it takes an average of 75 days to recruit and hire non-executive positions. Close to half (43%) of these leaders believe their biggest challenge is hiring and retaining people with the skills necessary to achieve business objectives. This sentiment is echoed through several other industries and with human resources executives: 66% of HR professionals believe there is a lack of qualified talent available.
So, what are these companies to do?
Adapt. Stop looking so hard for in-house talent and start finding that talent within the gig economy. Yes, this will require companies to completely re-think how they perceive talent, how teams work together, what even makes up a team, but it’s the way the world is going. The good news is, 42% of executives are already thinking about this shift and expect to increase or significantly increase the use of freelance talent in the next three to five years, according to a 2016 survey by Deloitte. And, this new working model won’t just benefit the free(lance) spirits looking to maintain their independence and flexibility, it will also help the companies hiring the talent.
How companies can benefit from the gig economy
- You’re following the talent to where the talent is already going, so you’re likely to get higher quality talent.
- You can hire the right talent for the right moment. Businesses are changing more rapidly than ever before. Today, you may need help building a financial model or marketing plan and tomorrow someone to execute on that model or plan. The builder and executor are typically two different people with different skill sets. With the gig economy, you can work with both.
- You’ll save time vetting talent. For example, to be accepted into Paro’s network of on-demand finance professionals, each person undergoes several rounds of interviews, a personality assessment, and they must complete a competency test and practice project. Less than the top 5% of talent who apply are accepted. We do the screening so you don’t have to.
- You’ll save money: freelance talent is less expensive than full-time talent. A full time employee typically costs a company 1.25 to 1.4 times the employee’s base salary or that of an equivalent independent worker.
- You may end up with a more engaged, happy workforce. Of course, you’ll just have to change your definition of workforce first.