With the rise of highly skilled contractors, C-suite executives benefit from “borrowing” external talent to nimbly fill critical gaps—and lean into technology to effectively manage the extended workforce.
Employers are increasingly valuing skills over more traditional hiring metrics (such as education or experience) to better align their workforce with the overall strategy to achieve their goals. As companies zero in on this concept of skills-based hiring, they have seen massive success in their business outcomes while increasing employee satisfaction. According to Deloitte’s skills-based organization survey, by matching workers to specific skill sets or tasks: “People can be freed from being defined by their jobs and instead be seen as whole individuals with skills and capabilities that can be fluidly deployed to work matching their interests, as well as to evolving business priorities.”
Contingent workers fit neatly into a business strategy that’s looking to expand skills-based hiring, as it offers companies the ability to strategically “borrow” workers that fit niche needs within their teams. Whether a worker is looking for more flexibility, or a company only needs a specific skill for a short period of time, the massive talent pool that comes with extended workers allows companies to efficiently fill a role. By borrowing this labor, the company gets necessary skills without losing the ability to pivot if needs change. As the percentage of contractors, gig workers, consultants, and other contingent workers included in workforce planning grows, companies are looking for ways to leverage the contingent workforce as a part of their skills-based hiring strategy.
Shortages in niche skill sets have been plaguing industries such as manufacturing, retail, IT, and financial services. Not only do these shortages mean companies don’t have the right workers to do the job, but it also puts them at an economic disadvantage to companies that are filling those positions. While degree and experience requirements have become common across many job levels and titles, some leaders believe that looking at education or experience may not be the most effective approach for building specialized teams. With as many as 33% of the skills in 2019 job postings slated to be out of date by 2024, employers need to find ways to rapidly adapt to changing business needs.
While many executives recognize the value of skills-based hiring, reports have shown that 40% of HR leaders feel they can’t build skills solutions quickly enough to meet the needs of their business. As a means to keep up, many decision-makers are turning to the borrowing strategy, building it into their workforce planning from the beginning, rather than treating the contingent workforce as ad hoc. This isn’t a new model: 87% of surveyed executives stated they include external workers in their workforce composition.
As a means to keep up, many decision-makers are turning to the borrowing strategy, building it into their workforce planning from the beginning, rather than treating the contingent workforce as ad hoc.
As business leaders continue to expand their workforce to include a wide variety of worker types, they’re creating economic advantages, such as improved talent retention and successful global growth initiatives. By borrowing talent via hiring contingent workers, leaders can provide human resources (HR) and procurement leaders with everything they need to fill crucial skills gaps without losing agility.
Due to the increasing value of using external workers, the successful sourcing and hiring of this workforce has become a high priority for business leaders. According to Harvard Business Review’s article “Rethinking the On-Demand Workforce”: “To compete in the years ahead, companies must do better. They’ll have to acknowledge and embrace the full potential of digital talent platforms.” Helping to keep employers agile, digital solutions for managing the acquisition of a growing and ever-fluid contingent workforce are also top of mind for leadership across all levels. And so, digital platforms such as vendor management systems (VMS) have become essential to the sourcing and hiring of external workers.
With more companies looking to borrow skills, the contingent workforce provides a seemingly endless talent pool to choose from.
Allowing employers to tend talent pools like a garden, a VMS provides a comprehensive list of eligible candidates who could fill niche roles at your company. These talent pools can be tailored by industry and are customizable to help support hiring managers as they seek out top-tier talent to fill upcoming roles. With more companies looking to borrow skills, the contingent workforce provides a seemingly endless talent pool to choose from. This allows employers to continue to prioritize matching roles with the best worker for the job and expand their skills-based hiring while staying agile as business needs change.
Offering tenure compliance, employee performance metrics, global pay rates, and more, a VMS becomes a one-stop shop for all external workforce sourcing and hiring. This data is all compiled into a single source of truth that employers can rely on to be accurate and easy to access. By leveraging these extensive sourcing features, hiring managers can focus on specific skills they need for any specialized teams, new business initiatives, and continued success.
In addition to sourcing and hiring, a VMS offers a wealth of tools for managing the external workforce after an employee has started with a company, making it easier than ever to get an end-to-end view of the extended worker lifecycle.
By leveraging and embracing the contingent workforce, companies can adapt quickly and close skills gaps faster, allowing them to reach their goals even during times of frequent economic change. By providing their HR and procurement leaders with more opportunities to hire external workers, executives are able to improve their skills-based hiring.
While matching workers to niche skills gaps continues to present challenges, the contingent workforce provides the necessary talent pool and agility needed to borrow talent and achieve business goals. External workers are a vital asset to any company looking to stay competitive in today’s market—and beyond.
Better understand what makes a VMS ground-breaking with these six tips.
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