September 28, 2017
Ongoing drive to replace full-time employees with freelancers and contractors in US, claims report
According to a new report from software firm Mavenlink, over three quarters (79 percent) of US executives believe that the use of contracted white collar workers offers them a competitive advantage, while 63 percent of employees say they would quit their current job to take advantage of a freelance opportunity. The study, On the Verge of a White Collar Gig Economy: On-Demand Workforce Trends According to Today’s Business Leaders claims to have uncovered significant trends in enterprise use of external contractors, an influx of highly skilled contractors into the workforce and increased individual interest in flexible working structures. This study conducted interviews with 300 professionals from different US based organisations with titles of director or above.
Top findings include:
? 94 percent of business leaders plan to continue using or expand their use of skilled contractors for specialised roles in the next year.
? 79 percent of executives state leveraging contractors is a competitive advantage, citing an increase in agility as the primary benefit.
? 47 percent state they are looking to hire contractors to fill management and senior executive roles, including c-suite contractors.
? 69 percent of organisations have inadequate support structures and policies for managing on-demand talent, and 77 percent state they do not understand what changes are required to better manage contractors.
? 63 percent of executives would switch to a contract model, given the opportunity.
? Job security–not benefits–is the number one reason full time employees remain in their role. 62 percent of white collar workers prioritise security, while only 23 percent rate benefits as the most important.
Trend One: On-Demand Workers: A Competitive Advantage
Business landscapes are changing at an unprecedented rate, and the accelerated pace of work has made rapid adaptability crucial for success. Traditionally, enterprises have heavily valued in-house resources, but those structures no longer function as effectively. Companies need to evolve, expand, and change direction faster than they can hire and train, or implement new processes. As a result, they’ve turned to third-party contractors for on-demand support.
According to the research found in “On the Verge of a White Collar Gig Economy”, 61 percent of business leaders consider agility critical to success, and 79 percent consider the use of contractors to be a competitive advantage. All of these also intend to increase their utilization of contractors over the next year. This will allow them to scale at will, accessing a broader pool of talent and workers with more specialized skills, without heavy financial or time investments.
Trend Two: Expert-Level Workers in Demand
Demand for contractors is not limited to low-level positions. 47 percent of executives are seeking temporary hires for management, senior executive, and even c-suite roles. The two qualities leaders value most in potential candidates are specialised degrees (35 percent) and a decade or more of experience (29 percent). These highly skilled upper-level workers add immediate value in strategic areas, without requiring lengthy onboarding. The most heavily demanded speciality is IT expertise.
Trend Three: Employers Grappling with a Changing Workforce
Business strategy has outpaced business structure, and companies frequently engage contractors without a clear system for managing them. Business leaders are tasked with overseeing a disparate and rapidly changing workforce, coordinating strategy and ensuring consistent performance. This requires insight and control, and articulated policies to stabilize work. However, 69 percent of participants in the study considered their current processes for managing contractors inadequate, and 34 percent had no relevant policies at all.
Trend Four: Executives Want In
Employees also stand to benefit from a contract structure, gaining both lifestyle benefits such as schedule flexibility and professional benefits like exposure to a wide array of job experiences. These advantages have prompted high interest in temporary roles: 63 percent of study participants stated that they would leave their current full time position for consistent contract work.
The primary motivation that business leaders listed for maintaining a full-time job was a sense of security (62 percent), while only 23 percent cited benefits and only 10 percent said salary. 56 percent of executives had already contracted in the past–a number that is likely to increase in the coming years.