Companies are adopting a strategic view of free-agent talent, but reaching that group will require adjustments.
By Rebecca Callahan
As HR professionals know, the recovery is moving forward, and the war for talent is once again heating up. But this time around, free agents—consultants, contractors, and contingent and temporary workers—will play an increasingly vital and lasting role. To succeed, companies will need to find new ways to reach this critical group of workers.
That is the picture painted by the preliminary findings of a new SourceRight Blended Workforce Strategy and Trends Study, a multiphase, cross-industry effort conducted by Bersin & Associates. In the study, respondents cited a range of talent-related pressures that are top of mind, including the need to drive growth, changing customer demands, the importance of innovation, and the impact of workforce and budget cuts made during the recession. At the top of the list, however, was “increasing competition in the marketplace for top talent.”
What’s more, the study found that more and more of that top talent is being found among free agents who, along with traditional full-time employees, are part of an increasingly blended workforce. Nearly 70 percent of respondents said that the blended workforce is important or extremely important in their effort to meet business objectives. Free agents make up about 27 percent of their workforces. But that percentage is likely to grow, because 45 percent say they plan to increase their hiring of free agents in the next 12 to 18 months.
However, many companies might not be in a position to do that, or at least to do it well. The study found, for example, that just 6 percent of companies are emphasizing strategic blended workforce planning to accomplish long-term company objectives. It also found that they are often failing to take full advantage of new recruiting tools that are critical to reaching free-agent talent.
It’s clear that many HR professionals now recognize that free agents are an increasingly critical part of the workforce. Now, they and their companies need to adapt to this new reality if they are to truly leverage the power of free agents—and the Blended Workforce Strategy and Trends Study points to a number of actions that can help them do just that.
SMART FREE AGENCY
Free agents have long been used to control employment costs, and, as the study points out, that is still an important consideration. But today, more companies are seeing these workers in a strategic light and as a means through which they can meet the challenges of a fast-moving, competitive world. Asked what is driving their increased focus on the blended workforce, 67 percent of study respondents cited “workforce agility and scalability to rapidly align with changing business needs.”
At the same time, about one-third of respondents cited “getting access to critical skills.” But the study, reflecting overall trends, also suggests that this figure is growing. Indeed, the free-agent labor pool has evolved to include a great deal of talent with specialized skills. A growing number of people are intentionally turning to free agency in order to gain greater control of their work lives—and these are often the highly motivated and skilled workers who are in a position to sell their skills on the open market.
In short, free-agent workers have shown that they have a great deal to offer in terms of valuable, in-demand skills. In addition, free agents also draw on the experience they have gained through their exposure to a variety of companies. This means that often these workers can bring fresh perspectives and best practices to each new project they join. Not surprisingly, then, the study found that among companies that use large numbers of free agent/contingent talent, high-value skills are very much in evidence:
• 75 percent use professional consulting, legal, and marketing free agents;
• 63 percent use accounting and finance free agents; and
• 60 percent said they use IT and engineering free agents.
Overall, today’s free-agent worker tends to differ from both the traditional free agent and the traditional full-time employee. What that means is that the traditional methods of sourcing talent will need to be revamped to include the free-agent population. Free agents typically have high expectations and high skill levels, and they understand the unique value that they offer companies. If they want to tap into this valuable segment of the workforce, companies will have to adapt new approaches.
For example, at this point, social networking still accounts for only a small percentage of hires, with most respondents saying that they get less than 50 percent of their hires via social media. But companies also say that they see promise in these tools, and two-thirds expect their social networking-based hiring to increase in the next 18 to 24 months. Social media tools can help address a basic free-agent challenge: Historically, finding free-agent talent has been something of an informal, word-of-mouth process. With social media, companies can take a more systematic approach, creating an online presence that is easily found by free agents, thereby greatly expanding and accelerating the entire referral process.
Companies can use social media to inject high levels of transparency into their values, culture, and practices. This can work in a company’s favor—or it can work against it if done incorrectly. Ultimately, companies need to carefully manage the image they project through social media by engaging candidates with relevant, useful contacts. The messages they deliver should be consistent with those in other channels, so that the company’s web site, Facebook page, tweets, blogs, e-newsletters, and other social channels—while not being identical—all sound like they are coming from the same organization. Defining and delivering an appropriate employer “voice” for social media is not always easy. Recruiters as well as HR and procurement professionals should consider collaborating with the marketing department, which is likely to have experience in creating such content.
On another front, only 25 percent of the respondents have online talent communities focusing on any sort of talent pool niche, but that will also presumably increase in the near future. In the quest for talented free agents, online, proprietary talent communities can be an important tool. These communities engage talent with the goal of fostering familiarity with the company and any current or future job opportunities or projects.
A free agent-focused community might use video and live chat to let participants communicate and collaborate with each other, as well as with the company. It could also provide information, for example, about how to file taxes or set up an independent business, or include an area where participants can post professional portfolios and profiles and gain access to job-matching tools. This approach can give free agents a sense of community that is tied to the company. At the same time, the company itself stays connected to that talent and, in a sense, creates a dynamic talent pool of candidates that can be easily reached when there is a need for additional knowledge or skills.
As the study indicates, a blended workforce—one that consists of employees, consultants, contractors, alumni, interns, and contingent workers—is quickly becoming the norm among enterprises globally. To take advantage of this new reality, organizations will need to think not simply about “filling jobs,” but rather about accessing the talent and skills they need to meet ever-changing business requirements. To master their talent supply chain and compete with the highest quality workforce, organizations might look to partner with talent acquisition outsourcers—recruitment process outsourcers (RPOs) and managed service providers (MSPs)—as well as those who integrate RPO and MSP capabilities through a strategic talent optimization model.
The study identified a number of specific areas where companies might look to talent acquisition outsourcers for improvements:
• Today, the complexity associated with acquiring and managing a blended workforce has increased the number of stakeholders who are involved across the talent supply chain. When asked how well they serve and manage various types of stakeholders, study respondents said that they were fair to good in working with vendors and suppliers, averaging 2.7 on a scale from 1 to 4 (with 1 being poor). Both RPOs and MSPs can bring a centralized perspective to supplier management, as well as expertise in partnering to drive high performance;
• Respondents cited “strengthening the ability to identify talent with the right organizational fit and competencies” as a current key focus. To include all categories of talent in such efforts, they will typically have to work across a variety of sourcing channels and supplier partners who can quickly identify the best and brightest talent. But they will also have to coordinate those efforts to optimize the flow of talent and help ensure that talent is integrated within the organizational culture—capabilities that an outsourcer can bring to the table;
• The globalization of talent sourcing continues, with 35 percent of respondents expecting to increase sourcing in Asia in the next two years. For Europe, that figure was 31 percent. For many companies, it will be critical to work with local talent acquisition and contingent workforce management partners who can readily tap into local-talent markets—and again, those efforts will need to be coordinated and optimized at a centralized program office and governance level;
• Most companies are not implementing incentive programs to drive quality (73 percent) or accelerate project completion (80 percent) with their contingent workforce. However, such programs will be vital to making the most of free agents within a blended workforce. An MSP is typically in position to implement, manage, and monitor such programs; and
• Respondents ranked “improving quality of hire” as their most critical talent acquisition initiative, but more than a third said that they are not “world-class” or “good” in this area. Partnering with an outsourcer can help companies improve their ability to find the right top talent whether full-time or contingent in nature.
The increased use of free agents is clearly here to stay, and it is reshaping the workforce. The Blended Workforce Strategy and Trends Study underscores an important emerging truth: Talent is talent, and it doesn’t matter what form it comes in. Getting the work done does not necessarily mean hiring a traditional employee; it means finding the right skills for the position. And today, those skills are increasingly likely to be found in a free agent.
Rebecca Callahan is president of SourceRight Solutions.