According to a Gallup Survey, a breathtaking 94% of workers want to go remote. Amid the COVID-19 pandemic, a door opened for a new way of operating. Workers got a chance to explore alternative options and re-design their working lives. Like open-source software, workplace relations were opened to inspection with the possibility to be improved and enhanced. This opened the door to a new era in HR strategy: open talent.
This concept is particularly salient in the face of what some analysts believe will be the most significant HR crisis of recent times: the Great Resignation. Coined by Professor Anthony Klotz in May 2021, the term entered common parlance after record numbers of people left their jobs in the wake of the pandemic to go freelance.
This phenomenon sent shockwaves through the HR departments everywhere, not least because in almost every industry, many analysts argue we were already teetering on a talent cliff. In January 2022, data from the United States showed that businesses had serious difficulty finding qualified candidates, with 47% reporting they had job openings they could not fill, far exceeding the 48-year historical average.
However, as any truly resilient organisation would see, there is opportunity in challenges. As huge numbers of highly skilled workers enter the freelance market, a remarkable amount of talent has been unbound from organisations free for anyone to access. This, potentially, could draw us away from the edge of the talent cliff.
Just as workers are reconfiguring their working lives, organisations need to reconfigure their hiring strategy to embrace open talent. In an environment where everything can be tweaked, re-written, and upgraded, it’ll be those that embrace the open-source approach to talent and team building that get ahead. Let’s look closer.
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Why is there a shortage of talent?
In May this year, Forbes published an article titled, “Are Employers Heading For A Talent Shortage Perfect Storm?”. This piece outlined the many interconnected reasons that as a global economy, we are staring down the barrel of a significant talent drought. These are due to demographics, education and technology.
Primarily, there is the well-known fact that birth rates in the developed world have been declining for some time. Although this might seem like a dramatic geopolitical dimension to bring to the debate, it has a significant impact. This is because a different Great Resignation looms: that of a huge proportion of skilled workers hitting retirement age. According to stats published by the European Commission, the percentage of workers aged 55 and over in the EU-27 increased from 12% to 20% between 2004 and 2019. When they retire, there simply won’t be the manpower to fill the roles.
Further to this, many candidates that would fill these roles still don’t have the necessary skills to move with the times. Over the last twenty years, the world has changed dramatically. Big data, AI and IoT devices are transforming approaches to business strategy and operations. But, in spite of these seismic shifts, many higher education institutions haven’t caught up. Many students are still exiting university without the skills they need for the modern workplace, compounding the problems already presented by demographics.
In the face of this skills shortage, the World Economic Forum’s Future of Jobs Report estimates that it will fall to employers to reskill half of all employees by 2025. This is, of course, a gargantuan and possibly insurmountable task. Further troubling analysis from the IMF estimates there will be 85 million vacant tech jobs by 2030.
These conditions will radically intensify competition for talent; however, this isn’t to imply there aren’t solutions. Remote work and multi-employment of skilled experts could play a pivotal role in keeping these parallel crises at bay – otherwise known as open talent. First, we’ll define what open talent is in more detail.
What is open talent?
We already introduced the pandemic as the event that ushered in a radical step change in the HR landscape. It was an opportune moment for highly skilled individuals to feel flexible, free to move, travel, spend time with family, and have life experiences that improve overall mental health. The issue we face now is that many of these skilled individuals have returned to work on-site and they felt dissatisfied.
This has precipitated a mass migration to freelance work. Data from Italy shows that in the first ten months of 2021, 777,000 voluntary resignations were recorded – 40,000 more than two years earlier. Meanwhile, there was an 18.2% increase in the number of VAT numbers registered during 2021. Clearly, a trend is fast emerging.
This term migration is key: critics of Professor Klotz argue that what we are witnessing is better termed the Great Migration rather than resignation. Talent hasn’t disappeared, it’s just moved. If you’re more of a glass-half-full sort of person, you’ll see that this movement doesn’t mean talent has been lost, instead, it’s liberated. This is open talent.
To again introduce the comparison with open-source software, employers can exploit the flexibility of freelance talent to fine-tune their operations. They can take on experts on a project-by-project basis, tailor the team to fit the objective and streamline hiring processes. Meanwhile, it caters to the preferences of a new breed of post-pandemic worker. The end game can be that hiring freelance talent is more productive for both the employer and the employee.
If it felt impossible to opt out of on-site work before, it’s now known that it’s a realistic goal to do the necessary work without someone looking over your shoulder. For employers, there’s a lesson to be learnt here: read the room, look at the numbers, and embrace the open talent economy. This is because highly skilled professionals are searching for freedom, flexibility and integrity to have a better work-life balance.
What’s the difference between an open talent economy and the gig economy?
However, there are critics of those that see the opportunity present in the Great Migration. These critics tend to use the mechanics of the gig economy as their case: they argue that insecure contracts signal a move to deteriorating working conditions. However, the rebuttal here is highlighting the key distinctions between an open talent economy and the gig economy.
A gig economy is an economy of odd jobs. They’re always very short-term, creating an environment where freelancers are always moving from one job to another. Incomes are low and insecure, but so are the skills required to do the job. Thus, the volume of workers available is abundant, so employers don’t worry about attrition. The classic examples are ride-share services and courier companies.
Certainly, the gig economy has its advantages. It’s good for people looking for flexible schedules or a top-up on their income, or if their skills are limited. But, in light of this, it’s essential to stress that an open talent economy is a completely different ball game. Open talent is a pool of highly qualified professionals who have chosen to become freelancers. This is often because their skills are so in-demand they can command higher rates than if they were an employee. Essentially, the supply and demand principles of the gig economy are flipped on their head.
In many ways, the term “gig economy” gives freelancing a bad name; undoubtedly, this is an attitude we need to discard. If executed correctly, an open talent economy will cultivate a healthier work system. Skilled employees have more bargaining power, where they can gain more interesting projects and better remuneration. On the other side, employers can benefit from greater productivity and improve overall performance levels.
Taking on the talent shortage
The key idea here is to encourage a culture where we embrace freelance talent and regard them with the same value as full-time on-site employees. In the context of a looming talent shortage, this pivot towards open talent can help businesses stay competitive. This is reflected in the stats reported by those that are already embracing the revolution; according to statistics collected by Outvise, 50% of hiring leaders said they relied more on freelancers in 2022 than in 2021.
A hands-off approach that empathises with employees’ needs by letting them thrive outside the confines of the on-site office space is imperative. In reality, nobody likes the typical office environment you’re surveilled round the clock. Arguably, these cultures spawn a type of complacency where an employee’s presence is regarded as enough to be considered to be working. Often, a result – rather than time-based – measure of performance drives productivity.
There is an explosion in the availability of freelance talent, but we still have a way to go to fully sow the seeds of growth in an open talent economy. Leadership needs to understand there is value in calculating the emotional temperature of your employees – it’s time to read the room. Evaluating this situation will function as a support network, understanding talents’ needs, while also representing a more efficient way of working and driving down the costs of hiring in-house.
Business leaders across the globe should experiment with the possibility of hiring freelance talent and encourage a future where more freelancers and freelance opportunities exist. Listening to and understanding these fundamental aspirations of flexibility and freedom is a way of relating to resignations employees have regarding on-site work. Today is the day to hire open talent.
At Outvise, we firmly believe in open talent as a catalyst and enabler of present and future organisations. We are building our services with this in mind and working to advocate for freelancers and our experience. We want to be a key player in unleashing the real potential of an open talent economy.
Companies should invest in the capabilities they need to access open talent and facilitate organisational change that integrates professional freelancers, while building brand equity for them. This is why we create tools to make sourcing open talent efficient and effective. Our network comprises more than 37,000 located all over the world, with the skills you need to execute your next project. And, with our unique project-matching algorithm, you could find a professional with exactly the right experience in less than 48 hours.
Experienced advisor and entrepreneur working to disrupt the way talent is sourced and acquired. I strive to innovate and to bring better and more effective ways of engaging with the TMD Talent worldwide. At Outvise we enable experts and companies to navigate through the ocean of liquid talent, connecting it directly to whomever needs it, wherever the need is.