The unemployment rate is showing a steady decline over the recent months, to levels last seen in 2008, signaling the recovery of the economy. But a strengthening economy encourages increased hiring leading to a decrease in the availability of talent. When it comes to technical skills and STEM (Science, Technology, Engineering and Mathematics) there is no alternative to having a skilled worker. As the chart below demonstrates unequivocally, educational attainment helps with finding employment and in today’s economy, skilled workers will not need to struggle to find suitable employment.
Source: Bureau of Labor Statistics
Employers will soon experience one of the unavoidable consequences of a strengthening economy – the war for talent. Businesses will be required to vie with competitors to recruit and onboard the right talent.
Many businesses are struggling to fill their open positions According to the Bureau of Labor Statistics; the number of job openings was little changed at 5.4 million on the last business day of October; while hires and separations were little changed at 5.1 million and 4.9 million, respectively. Soon, businesses may find head-hunters spiriting their talented employees away, with offers of better pay or benefits.
Businesses may have to offer better salaries to find new employees or retain their existing employees. This is already in evidence if we look at this inflation adjusted map of median household income in the United States, according to research conducted by Sentier Research. Household income has recovered from the low of $48,217 in 2010 to $56,279 in September 2015. Roles requiring software engineering skills and other technical skills are more valuable than ever, and they make the possibility of finding such talent more difficult than ever.
As we have said time and again on this blog, businesses can mitigate this threat by embracing total talent management which enables them to look at contracting out their requirements instead of planning to hire a permanent worker. So, now is the time to bring talent in – in the form of contingent labor, independent contractors or even as a Statement of Work (SOW) project. This approach offers a business not only tremendous flexibility but also help to align its business needs with the required resources to enjoy an opportunity for success and growth.
‘Talent is today’s most valuable commodity’, to quote Christopher Dwyer of Ardent Partners and the notion of ‘talent’ employed by a business determines how far it can go in terms of growth, innovation and ultimate business expansion. This fact makes it critical for companies to develop workforce management programs to effectively manage their enterprise talent in a centralized manner and access the needed talent where available. Many savvy professionals are also looking beyond traditional ways of working and embracing the option to take up work as freelancers and independent contractors. Many of them command wages much higher than what they earned at regular jobs, and would not go back to permanent employment even at a higher pay as they value their freedom more!
When companies bring in different types of workers to meet their talent requirements, they need to keep in mind the importance of having visibility into the departments which are using these workers, who their suppliers are and the bill rates being charged by role. It also helps to ask some questions:
Since really skilled candidates prefer being their own bosses and value better work-life balance highly, there is no option for employers but to adopt total workforce programs to access the talent they need and achieve their goals. But, when handled correctly with a clear strategy in place, that is not really a bad option.
Do you agree? Please share your opinion with us and also tell us when and why you chose to make contingent workers an essential part of your workforce programs.
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