Last week Lorien was joined by guests from businesses of all sizes, industries, and at different stages in their contingent talent acquisition, as part of our first in-person roundtable since the COVID-19 pandemic. We discussed the contingent market, the importance of a defined value proposition, talent gaps, and everything in between. In this article, we share our key takeaways from the event. If you would like to share your own experiences or learn more about how your contingent value proposition (CVP) can aid diversity, please get in touch with us today!
The market is hypercompetitive, and this is creating new patterns in talent acquisition
The market is booming, with businesses of every size and every industry hiring for tech talent. At the same time, candidates that stayed with companies during economic uncertainty now have a sea of career opportunities in front of them, which is making talent retention even harder.
This is creating some interesting new patterns in talent acquisition. Firstly, contingent talent is no longer an ‘easy’ short-term solution for skills gaps in the permanent space. Contingent talent has – in many areas - become just as difficult to hire for, and this has meant value propositions often associated with permanent have begun to bleed into CVPs – such as skills development, meaningful work, flexible working, exciting projects, and culture.
Secondly, globalisation has meant that acquiring talent from overseas is no longer as cost efficient as it once was. Many location-agnostic US companies are offering lucrative US wages which can be hard to compete against. The rise of remote working post-pandemic will likely only escalate this trend.
Thirdly, both talent demand and shrinking cost differentiators for talent have meant that many organisations have had to adopt more flexible operating models.
Changes in workforce make-up are affecting inclusion and diversity
The speed of the contingent recruitment process means that often focus is on finding and recruiting talent quickly rather than hiring through a D&I lens. Our guests discussed how this approach could cause problems further down the line if contingent workers ended up converting to permanent roles. In that swift and sometimes transactional conversion process I&D goals may not be given proper consideration. Without a clearly defined I&D approach for contingent roles therefore, it can become very difficult to keep a handle on overall I&D within the business. Our guests discussed how contingent talent should perhaps be seen as permanent talent that hasn’t decided where to settle yet.
Contingent candidates are more confident about what they want and need in a role
Since the pandemic, contingent candidates have become more vocal and candid about their preferences for flexibility. Darren commented on the Lorien 2020 ‘What Tech Candidates Want’ whitepaper, and how even pre-pandemic there were many similarities in expectations for contingent and permanent workers; Darren suggested the pandemic might have brought this to a tipping point. Our guests expressed how the contingent mind-set has become more permanently aligned, with requests not just for more flexible working, but also greater learning and development opportunities and interesting projects. For some, this expectation was causing friction with hiring managers, with candidates dropping out as soon as a hiring manager expressed a preference for a commitment to set days in the office or suggested a need to be based in a specific location. Guests found that often candidates are seeking reassurance from existing contractors or employees ‘at the coal face’ about what flexibility really meant at that organisation. It was agreed that enabling a candidate – whether contingent or permanent - to speak to someone early on in the process to establish working from home opportunities was vital for turning offers into acceptances, and for attracting a gender-balanced slate. Flexibility didn’t necessarily guarantee conversion, but it did open opportunities up to more talent.
Talent scarcity has made the contractor king
Demand for contingent talent is increasing rates in more than one way. Our guests discussed the effects of ‘project bleed’, where contractors acquired on clearly defined projects were later moved onto new projects at a higher rate because of the business’ reliance on their skills.
Our guests were also experiencing more ‘boomerang employees’ – people that left during ‘the great resignation’ for higher rates, only to return when expectations didn’t match up. They noted however that returning employees tended to have even higher expectations.
Both of these examples, and the knowledge that talent is scarce, is putting many skilled contractors back into a position of power.
Is IR35 a red herring?
Many companies took a firm stance on IR35 pre-COVID-19, opting for blanket policy changes towards PSCs. We discussed whether the unprecedented demand for talent would prompt more organisations towards case-by-case IR35 assessments and determinations. Our guests were split; some believed that IR35 was simply a commercial outcome which meant paying more and which had to be factored into the recruitment process, resulting in the need to weigh up the extra cost vs. the operational cost of facilitating case-by-case hiring manager determinations; while others believed that IR35 had made the landscape incredibly complex. We also discussed the potential challenges of working with boutique consultancies for certain projects, and the pitfalls of not properly defined Statement of Work services.
Process efficiency is becoming even more important for talent retention
Historically, the fast turnaround of contingent talent has meant a ‘worse’ process from a CX perspective. However, the new demand for contingent talent has led organisations to start thinking more holistically about their recruitment processes, and candidate engagement of contingent talent. The importance of fast, painless processes, access to real experiences of the company culture and team, and proactive communication throughout the end-to-end recruitment journey, has never been higher for contingent talent engagement and retention.
Upskilling and the apprenticeships are popular ways to boost the talent pipelineThe bottom line is there isn’t enough talent in the pool to begin with. The volume of school leavers with STEM skills is not enough to fulfil demand – especially now almost every business is a technology-led business. Compounding this issue is that some long-term employees lack the digital skills required by companies undergoing digital transformation.
It was agreed that too many businesses don’t take full advantage of their apprenticeship levy to upskill existing workers and to bring new talent in. Several of our guests sung the praises of their apprenticeship programmes as a way to supplement the talent pipeline. Many found apprentices displayed exceptional motivation and often delivered considerable value for investment when compared with traditional graduates, who could have higher expectations. We discussed that apprentices worked best in a structured business due to their need for clear tasks and objectives as they embed, and a natural requirement for greater pastoral care.
We also discussed the value of internal upskilling, but the challenge of persuading stakeholders that 20% of work time be devoted to learning was a worthwhile investment. Without stakeholder buy-in, these sorts of evergreen talent pipelines can be difficult to build, but the importance of doing so has never been more pressing as we continue the ‘war for talent’ of all forms.
We hope these takeaways prove useful for your business strategy. If you would like to continue the conversation around contingent talent, diversity, and market trends, please get in touch with us at firstname.lastname@example.org. And if you would be interested in attending future roundtables, please get in touch with Darren at Darren.email@example.com.