It’s no mystery that COVID-19 has impacted the global workforce and created a global talent gap. From the normalization of remote work to the Great Resignation, from the ways people work to the way employers find workers, everything has changed.
Even three years later, businesses are recovering from this seismic shift. A recent Manpower survey found that the global talent shortage has reached a 16-year high, with 75% of companies reporting difficulty hiring. Korn Ferry estimates that, by 2030, 85 million jobs could go unfilled due to the lack of skilled workers.
So how can companies close this talent shortage gap? How can employers keep valued resources while also attracting new talent? What resources are available to reduce the stress of finding employees and hiring them?
What’s Causing the Talent Shortage?
There is no single reason companies are having trouble finding and attracting top talent. A recent Forbes article cites a combination of factors that have widened the talent gap since 2020. One of the most obvious factors is that Baby Boomers are beginning to reach retirement age. As these highly experienced workers leave the workforce, companies are struggling to find enough skilled workers to replace them.
Less predictably, the struggle to find replacements is not due to a lack of talent. Rather, it is because the multitudes of qualified Millennials and GenZ workers are questioning traditional roles in a corporate environment. These younger workers tend to consider not only pay but flexibility, company morals and mission, and a host of other not-easily-quantifiable factors. As organizations fail to meet the demands of the younger workforce, many of these up-and-comers are turning to independent work for a greater sense of fulfillment.
Additionally, top talent is turning down traditional work because the needs of younger workers have changed since the COVID-19 pandemic. The demonstrable success of remote work during lockdowns gave new hope to workers of the possibility of living a more flexible lifestyle. Many are looking for hybrid or remote roles rather than desk jobs and dismal commutes. They want to work where it’s convenient so they can easily play, parent, and/or otherwise go about their private lives as soon as they punch out.
Closing the Talent Gap
How can employers close the ever-widening talent gap? There are two unique solutions that they should consider:
- Talent sustainability and retention: Assessing the wellbeing of the current workforce will help organizations keep current employees happy and prevent them from leaving, and this attention to talent will attract new workers.
- Leveraging the remote workforce: Independent workers make up a large part of the global economy, and their talents could be used for temporary positions or responsibilities that would normally be assigned to a full-time employee.
Talent sustainability is a broad concept that focuses on a company’s ability to attract, develop, and keep top talent over the long-term. Focusing on talent sustainability not only helps an organization keep its current employees, but it also allows them to seek out and develop new talent to ensure the company has a strong and diverse workforce for the future. Talent sustainability also includes efforts to create a diverse and inclusive work environment and promote work-life balance.
Talent retention efforts can help a business keep its existing employees from leaving the organization. Efforts can include offering competitive compensation and benefits, providing opportunities for career advancement, and fostering a positive work culture.
A good talent sustainability and retention model will focus on efforts to not only acquire and hire talent, but also to further improve and evolve that talent and the company’s culture and retention efforts. These initiatives can apply to more than just long-term or full-time employees. By offering freelancers and independent contractors the same growth incentives and retention factors, like training, tuition reimbursement, and health insurance, as well as improving diversity initiatives, organizations can continually engage the global independent talent pool.
Recently, People2.0 and Tapfin hosted a webinar on talent sustainability. During the session, presenters conducted an audience poll to gather insights into how their organizations think about talent sustainability. Commonly used words were collected in a word cloud. Unsurprisingly, the top three words used were “culture,” “inclusivity,” and “employee experience.”
For the first time in recent history, the workforce consists of five generations. As the younger generations enter the workforce and rise through the ranks, the workers’ values are changing.
More and more professionals are leaving the traditional full-time employment model and moving to the world of the contemporary workforce, opting for more flexible, contract work. Independent workers are the fastest growing segment of the workforce, and they now make up a global business sector worth over $2.7 trillion.
Many gravitate to flexible work because it gives them greater control over their schedule, the freedom to work from any location, the ability to decide which projects to work on, the independence to choose which organizations to work with, and the opportunity to increase earning potential. And businesses are starting to embrace that population for certain skills and functions.
Within this independent and typically younger population, culture, inclusivity, and overall work experience remain key factors for workers, no matter whether they are full-time employees or contracted. If businesses want to attract and retain top talent, they need to focus on these factors. Most organizations understand that caring for employees is what attracts and helps retain top talent. Extending benefits like healthcare or professional development to independent contractors is key in achieving talent sustainability and bridging the talent gap.
The Independent Workforce
Contingent or independent labor is a broad term used to describe temporary workers or workers who provide services for a company but are not formally employed by that company or on their payroll.
This section of the workforce is often overlooked. However, more companies are beginning to recognize its potential, especially when trying to find talent to fill roles. The gig economy makes up a large and growing part of the global economy. According to Ardent Partners, one-third of enterprise total workforce currently fits under the broad category of independent work, and that number is growing. In a recent McKinsey survey, 36% of employed respondents classified themselves as independent workers. And in 2021, the global spend on independent work was $5.4 trillion (about $17,000 per person in the US).
There are also several ways that companies can source talent within the contingent workforce. Business-to-business (B2B) marketplaces like UpWork, Braintrust, and Talmix match and deploy freelance workers from all corners of the globe. With the increase in remote work, more businesses can access a global talent pool.
The Tools to Bridge the Talent Gap
People’s work styles and values have changed, and unless organizations make efforts to change with them, the global talent gap will only continue to widen. Workers are now looking for jobs that meet their expectations for flexibility and values, and this is driving many more into the independent workforce.
By focusing on improving talent sustainability and retention and engaging the independent workforce, organizations can reduce their talent shortages.
If you’re ready to reduce your organization’s talent shortage and unlock access to unlimited growth, People2.0 can help. As the world’s largest employer of record (EOR) and agent of record (AOR) provider, we connect you to a world of talent.