According to ICIMS, between 2016 and 2019 only 60% of tech jobs in the U.S. were filled, compared to 12 hires per 10 openings in all other positions. And this gap shows no signs of narrowing – there are currently 1,365,500 software developer vacancies at American businesses, while only 65,000 developers graduate from the college system every year. With independent careers in demand, midsize businesses have a significant opportunity to harness the power of the on-demand workforce. In the realm of digital transformation, where skilled workers are so scarce, flexible talent acquisition models are proving to be the get-out-of-jail-free card for those companies scared of falling behind in the digital arms race.
Covid-19 increased the urgency of digital transformation initiatives for businesses of all sizes. Small and midsize companies, without the budgets to invest in every innovation under the sun, were forced to focus on what mattered most and make smart, efficient investments in digital technology. In most cases, these investments centered around new productivity tools and communications infrastructure to connect and secure remote teams. But, as organizations have rushed to digitize faster than their competitors, they’ve created a staffing shortage.
The scarcity of digital skills isn’t new, but it has been magnified by the pandemic. It is now the most significant factor holding back small and midsize businesses. According to ICIMS, between 2016 and 2019 only 60% of tech jobs in the U.S. were filled, compared to 12 hires per 10 openings in all other positions. And this gap shows no signs of narrowing — there are currently 1,365,500 software developer vacancies at American businesses, while only 65,000 developers graduate from the college system every year.
Even pre-pandemic midsize businesses struggled to hire and retain top technical talent — stuck in a void in between two sides of the spectrum. On the one hand, they are competing with firms such as Google, Amazon, and Microsoft, each of which have the resources to offer large salaries, attractive benefits, and stock options. On the other, exciting start-ups are snapping at their heels, luring employees away with the chance to be part of something from the early stages and perhaps a stake in the business.
Therefore, midsize businesses – particularly those that aren’t digital natives – have a hard task keeping hold of prized employees. Matters are made worse by the increasing cost of hiring technical staff, which isn’t something many businesses necessarily have the budget to afford.
Freelancers Fill the Skills Gap
Given that the supply of full-time professionals is insufficient, small and midsize businesses are increasingly exploring an on-demand workforce. Rather than paying high salaries and competing with thousands of other businesses, they are engaging flexible staff on a cost-effective, project basis. This provides better access to talent that smaller businesses would not have the pulling power to hire permanently, while keeping overhead down.
This does not mean bringing freelancers into a physical office. To truly take advantage of the sharing economy for technically skilled labor, businesses need to leverage the global talent pool. After all, the benefits of a flexible workforce will be largely redundant if the search for said workers takes place within a comfortable commuting distance. It’s hard to believe that the very best team for a digital transformation project can be found within a 20-mile radius.
Comparing the percent increase of viable candidates when switching from local-only to remote is staggering. In some cases, there is a 430% increase in viable candidate availability when the search is open to remote candidates. For aspirational businesses looking to put their best foot forward, coordinating remote teams of on-demand workers enables them to access the best tech talent around the world.
Remote Work Doesn’t Always Work
Of course, not all industries have the luxury of being able to operate effectively with a remote workforce. Across all businesses, an over-reliance on fully remote teams of freelancers to complete projects on their own is rarely effective. This can be a costly approach and deprives projects of stakeholders who have an intimate knowledge specific to the company looking to digitize.
Invention and innovation are also difficult to outsource, can be expensive, and are certainly hard to measure effectively — particularly if pursued via freelancers who are not closely involved with the inner workings of a business. IP development is best left to in-house teams with the time and specific understanding of company operations. The value of on-demand team members is at its highest when they are used to supplement digital transformation professionals. Freelancers are best deployed for completing process-driven tasks, rather than overseeing strategic matters.
It can also be difficult to regulate the quality and suitability of freelance work. Even if you know and trust each worker on an individual basis, coordinating them to ensure necessary standards can be extremely challenging. For any small and midsize business partnering with on-demand talent, underpinning each digital project with robust quality assurance processes should be the first port of call to ensure continuity, timely delivery and a high standard of output.
Workers Increasingly Choose Freelance Roles
Although the past year has yielded uncertainty for freelancers, the good news for small and midsize businesses is that the “plural economy” is recovering. Whether due to the broader global economic bounce-back, or an increasing appetite for the flexibility and autonomy afforded to the workforce during national lockdowns, freelancing is making a comeback.
In fact, 58% of non-freelancers who were new to remote work during the pandemic said that freelancing is the future. We’ve even seen an emergence of a freelance platform industry, which is expected to grow by 15.3% by 2026. This means that rather than skilled digital workers being confined to one company, this talent is being democratized more fairly among those that need it.
With independent careers in demand, midsize businesses have a significant opportunity to harness the power of the on-demand workforce. In the realm of digital transformation, where skilled workers are so scarce, flexible talent acquisition models are proving to be the get-out-of-jail-free card for those companies scared of falling behind in the digital arms race.
The world is full of talented, digital experts — they are just skewed toward a select group of businesses. By re-organizing how talent is supplied, alongside longer-term aims to create more of it, organizations of all sizes can have the opportunity to define their own digital futures.