In the past, growth has always been linked to capital. When governments collaborated with businesses to stimulate the economy, they looked for new ways to unleash capital. Thus, we have the economic system we live in now: capitalism. But, arguably, we are moving into a new epoch. Now, talent is calling the shots. This new system is talentism.
Geopolitical, economic and demographic factors are constantly reshaping labour markets. Technology, for example, is changing the nature of work itself. Automation has rendered some occupations completely obsolete, whilst concurrently, spawning new industries and professions. However, what we won’t see is wholesale obsolescence of human labour. Instead, the determining factor in innovation, competitiveness, and growth will be talent.
Talent knows this. Companies see they can’t deploy these technologies without the ideas and experience of highly skilled workers. It won’t be technology nor factories, and certainly not capital that will give companies the competitive edge – it will be talent. As a result, talent is seizing control. They can see that demand for skills outstrips supply and their holding all the cards.
The pandemic reinforced this further. The events of this crisis have completely turned the labour market on its head. The normalisation of remote work demonstrated to talent that they could work anywhere at any time, freeing them from the shackles of the desk in HQ. Talent accrued yet more power, and now, they didn’t have to go to businesses. Businesses have to come to them.
But the supremacy of talent, or talentism as it’s been called, has had a longer evolution prior to the watershed moment of the pandemic. Here, we’ll discuss the transition to talentism and how businesses should operate in this new era.
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The transition from capitalism to talentism
For the bulk of the twentieth century, labour and capital fought fiercely for the advantage in the Industrial Age. The Industrial Revolutions of the eighteenth and nineteenth centuries saw the birth of the factory. These vast smokestacks required legions of unskilled workers to operate the machinery and assemble the products. They were poorly paid, overworked and lived in poverty.
But the workers knew the factory couldn’t operate without them. Unions were formed and collective bargaining was exercised until conditions improved. However, capital was crafty; it penalised unionised workers and moved operations to less organised areas. Ultimately, manufacturing migrated from the economic North to the South, where they could source the cheapest possible labour. With the dawn of neoliberalism and the Thatcher and Reagan governments in the UK and USA respectively, it seemed that capital had won a thumping victory over labour. The story, however, does not end there.
During the twentieth century, as the struggle between unions and factory owners raged on, the nature of business changed. As companies grew, how they were run evolved. Globalisation saw the birth of a professional, managerial class, and subsequently, industrial capitalism transformed into managerial capitalism. This class gradually gathered more power and influence.
With the advance of the neoliberal agenda came a new order of things. The Industrial Age gave way to the Information Age; in the global North, it was knowledge and information that created the most value, as opposed to products. This put more power into the hands of the knowledge-wealthy managerial class. Now, tensions have shifted from being primarily between capital and labour to between capital and talent.
These tensions have escalated sharply since the 1990s. Knowledge assets – that is, the talent themselves – would soon be more valuable than capital assets. This advantage crescendoed during the dot-com boom as online technologies and services exploded, transforming the way we do business. According to Klaus Schwab, the founder of the World Economic Forum, “Talent has replaced capital as the new factor for success.”
The war for talent rages on
We are now at the peak of the battle between the sources of capital and the producers of value: analysts have called it the “war for talent”. Currently, it seems the producers of value are winning. Although the battlefield may have changed, the rules of engagement remain much the same. The reason that talent is so valuable is for the same reason anything gains worth: demand is exceeding supply. Statistics published by Manpower Group and McKinsey&Co suggest the situation is fairly dire:
- An astonishing 87% of businesses globally are experiencing talent gaps;
- 64% of executives report they think they’ll have to replace or retrain a quarter of their workforce in the next five years;
- And 67% say they are finding specialist roles difficult to contract.
Businesses are scrambling to attract top talent, and in many ways, are victims of their own dynamism. Benjamin Pring, the Director of the Center for the Future of Work, observed that “the pace of change in underlying technology is now so fast that organisations increasingly need to change quicker than people can change.” Therefore, the special few that do have these sought-after skills are holding all the cards.
They’re demanding higher salaries, more benefits and greater flexibility. The pandemic empowered them more still; the move to remote work demonstrated it’s possible to work across borders, time zones and even sectors. We need not be tied to one company or place to succeed, and now, many of these talented individuals are finding more fulfilment in more dynamic working environments: read, the freelance market.
The freelance turn is here to stay
Since the pandemic, the freelance market has exploded. In the context of talentism, there were rumbles before; but now, like many aspects of digital transformation, there has been a major acceleration. Estimates suggest that globally, there are now approximately 160 million freelance workers. In North America and Europe, approximately a third of all workers are now freelance.
But who are these freelancers? Some are under the impression that all freelancers are young, but in fact, the demographics are far more diverse. Sure, there is plenty of promising young talent who have skills and insights that are vital to staying ahead of the times; but there are plenty of seasoned professionals that recognise the opportunity of the supply and demand matrix. They can offer tremendous expertise in big data, artificial intelligence and digital marketing, enabling companies to get ahead of the curve in this fast-moving moment.
And it seems once you go freelance, you don’t go back. According to a survey conducted by Outvise, freelancers report a far higher level of job satisfaction than employees; a remarkable 90% described themselves as extremely satisfied with their jobs. Even more remarkably, 97% said they would never return to a traditional workplace. What’s more, the word is out. These positive reports mean that now, 40% of millennials say they’re thinking about abandoning their current jobs and going freelance in the next five years.
Why? Because these enjoy the flexibility, independence and choice of the freelance world. They get to the projects they want to do, when they want, in a location that suits them. Plus, certain profiles are so in demand that many command fees that outstrip their salaries as full-time workers.
Online talent platforms are transforming the world of work
If the laws of talentism dictate that talent is your single greatest asset, it’s vital that a business’s talent pool is as broad as possible. Working with freelancers has gone from a novel to a mission-critical strategy, enabling businesses to connect with the expertise they desperately need. But where can you find this talent? Surely nobody in any self-respecting HR department has time to trawl thousands of LinkedIn profiles to make a few cold calls?
The answer lies in online talent platforms. Earlier iterations had their challenges; non-specialised sites often resulted in inexperienced or inappropriate responses to calls. But now, the market has levelled up and curated communities are spearheading the charge in the talent revolution. According to the International Labour Organization (ILO), online talent platforms represent some of the most important transformations in the world of work. Here’s why:
- Skills and references are already certified.
- Project matching is more efficient.
- Onboarding is faster than ever.
- The paperwork is simplified.
This is because the most advanced platforms offer an end-to-end service. The Outvise team, for example, uses a rigorous vetting process to ascertain if a professional is suitable for the community. Once an expert is verified, a custom algorithm matches their profiles to projects in a matter of hours. Once the match has been made – often in little over 48 hours – they can begin the onboarding process. Meanwhile, the Outvise team takes care of the bureaucracy.
So how does this compare to the time and cost associated with traditional hires? Ultimately, the bottom line always comes out on top, and with freelance talent platforms, the numbers stack up. The average hire takes approximately 36 days to fill one position and up to 90 for high-level roles. With an advanced platform like Outvise, it can be a matter of hours. The median costs of a full-time, meanwhile, can be as much as €4,000 in resources and lost time. The cost of a hire with Outvise? Practically zero. The client pays nothing except the freelancer’s fee and some commission once the project is finished.
But this convenience and efficiency is by no means an isolated event. Outvise aims to help clients deploy freelance talent to the greatest possible effect. Hiring freelancers shouldn’t be seen as a one-time transaction, but often as the start of a relationship. Once an expert is identified, their expertise can be leveraged on-demand, calling on them as and when to participate in projects. They already know the organisation, the players, and the working environment, so onboarding is virtually a non-event.
The road ahead through talentism
The economy goes through cycles. Before the Industrial Revolution, there was feudalism. With the rise of the factory came capitalism, where capital was the primary asset for success. Now, with the dawn of the Information Age comes talentism: what will set companies apart will be those that can attract the best minds. This requires a complete reappraisal of what was a centuries-old workforce model, whose disintegration has only intensified in the wake of the pandemic.
It’s clear now that talent has the advantage. They’re a business’s greatest asset and supply is outstripping demand. They call the shots: when and where to work and on what. Businesses have to adapt to them, not least as the pandemic demonstrated the perks of remote work.
As is clear, organisations need to completely reappraise their strategy so they can start winning the war for talent. This means embracing freelance talent and combining it with their current HR plan. A key tool will be specialised freelance talent platforms. With these partners, companies can connect with verified experts in a matter of hours. Meanwhile, the platform takes care of the admin and nurtures the relationship.
Outvise is one such platform. Explore our expert profiles and start playing by the new rules of talentism.
Alex Collart, CFO & Co-founder at Outvise. Serial entrepreneur and management consultant, with a focus on strategy and marketing. Has co-founded and exited several companies. Former McKinsey&Co associate. Industrial Engineer + MBA (IESE/Kellogg).