Becoming a Client of Choice to Attract, Engage, and Re-Engage Top Independent Talent

 

[00:00:02] Brian Peña Welcome everybody to today's webinar event. Becoming a client of choice for the Independent Workforce sponsored by MBO. Actually, this is an MBO virtual event. My name is Brian Peña and I am excited to be your moderator for today. Just a couple of housekeeping items. We love your questions. Please feel free to use the Q&A box you'll see at the bottom. Interact with us directly, please. We'd like to answer them as quickly as possible, as promptly as possible. If you have any questions, you can also enter into the chat things of the technical issues or things like that. And we'll do our best to address them. If you're hearing me, that means you're doing the right thing. Going on to the next slide at MBO partners, we have been on a mission to make it easier for enterprises and top independents to work together. Our mission statement truly distills down to enabling people to do the work they love, the way they want to do it. And we've been doing that for more than 20 years and we've been working with some of the largest companies in the world. We've on any given time, we have over 7000 independent billing. Of that, 70 percent are high earners and the average project size is over $ 50,000. So our specialty is really addressing and servicing the needs of the target of this particular study. So we're very, very excited to share it. Joining me today and in future events, you can join us and other future events right there, mbopartners.com/events. We have a lot of webinars coming up. The great content for both talent, independent talent as well as enterprise. And we look forward to seeing you at those particular events moving forward. Now, I get so excited to join in this chair, our primary speaker today, Steve King. He is the founder of Emergent Research. Emergent Research is a research and consulting firm focused on the needs of small businesses. And Steve has been working with some of the largest companies in the world on this entirely unique and special market. I have personally found a lot of insight and Steve's wisdom and humor great during this time. And I certainly hope you will leverage his experience as well to try and learn the same. And the first thing really that we always want to start off with and given the climate, is to kind of think about not just what's happening now, but what's the post covid workforce going to be. And Steve, I want to put that question out to you. How organizations managed to grow their workforces, including independent talent, in the future. Is this the new normal? What does that look like?

[00:02:26] Steve King Sure. And, Brian, thanks for having me today. And I'm hoping my voice is coming through. OK?

[00:02:31] Steve King OK, loud and clear. Sound good. So it's interesting that the data we're going to cover today was actually collected pre covid. And so as we go through the presentation though, we'll have the opportunity to talk about how we think that's going to change over time and what the implications are. And so we'll have kind of a three to five year outlook based on what's going on with covid. But at the post covid world. But the most interesting thing to us, I think, is as far as a firm that's that helps companies plan against the future. Is we start to you quickly try to look at what are the trends that are going. Our current pandemic, our firm, goes back quite a ways, and so we've lived through multiple recessions and shocks and one of the things that's very clear is the trends and shifts that were already in place and growing going into a shock. One of two things generally happens there, either amplified and accelerated or for one reason or another, they decline quite a bit. And as we look at the trends and shifts driving the growth of the use of not employed labor by corporations, those trends and shifts were companies looking for greater agility, flexibility, trying to access skills and in a series of others and growing use of remote work. And we're going to go into this stuff in more detail. But all of those trends are likely to be amplified by covid. And so as we come out in the short term, there's obviously a lot of pain for everybody. But as we come out of the recession, we believe we'll see an amplification of those trends and even faster growth in the use of nonemployee labor than we were seeing in the last couple of years.

[00:04:37] Brian Peña Yeah, I think one of the things that is going to be an interesting societal change is kind of an acceleration of a lot of the more advanced workforce strategies that have had a long time or struggled to gain traction in a lot of enterprises, you know, things like talent pools and direct sourcing. It's certainly been on the radar for a long time. I think that this the post covid world will see a lot more companies and organizations looking at these strategies and recognizing the need to have a really concentrated strategic approach to how they manage their extended workforce. I'm also really intrigued by the number of people who will probably make the choice to be independent, either forced to make that choice or choosing to do that, actively feeling that working for an organization is no longer as safe as a place. You know, I think it's an interesting change,

[00:05:29] Steve King Yeah, that both supply and demand will be affected. And it's interesting on the corporate side, we ran we heard a great quote from the CEO of Hill Holiday, which is a large advertising agency, and she said, We used to hire for the peaks and future. We're going to hire for the valleys.

[00:05:51] Brian Peña Yeah.

[00:05:52] Steve King Said because of that, we're going to use a lot more freelance talent and not employ labor. And I think that kind of sums up the way a lot of corporations are going to feel going forward. But on the other side of what you mentioned on the supply side, in the last recession, we saw an initial decline in the number of people doing this type of work just because there wasn't enough business for them to get out of the recession as the recovery started. And we'll talk about this later. Definitely a growing number of people getting involved in this. This has a similar feel to it in terms of that piece. So, yeah, we believe supply will grow to be

[00:06:33] Brian Peña Fantastic. Thank you, Steve. So, Client of Choice Study this is something that we've been doing for four years now. What does this study all about?

[00:06:41] Steve King So the study looks at professionals who provide services to corporations. And so the goal here was to look at independent workers, independent contractors, consultants andother non employee labor independent solo for their labor mostly, and try to understand how they go about choosing their clients, how much choice they have, as well as what they're interested in getting from their clients. And so that behind it is how do you position yourself as a company to attract and retain, not employee labor?

[00:07:18] Brian Peña Yeah, and it's never been more timely, to be honest. So let's talk about this audience. Tell me about this chart right here.

[00:07:26] Steve King So we've been tracking the total number. We went into detail in terms of diving deeper on this, in terms of their attitudes and motivations four years ago. But we've been tracking the numbers since 2011 of the people who are doing this. And as you can see, it's grown by labor standards quite rapidly. It's actually growing at about four x four times the rate of overall employment during the last decade. This is actually nine years of data. And so and as you look through this, you'll see that there is an acceleration coming out of the Great Recession of 2009 where it grew relatively fast and that growth rate has slowed over the last couple of years. And that's a function of tight labor markets in the competition, traditional jobs. But even with employment, very easy to come by, particularly for this group of people who are highly skilled, it has continued to grow over the last few years. So steady growth in this faster growth, as we said, than overall unemployment. And that reflects, again, both the supply and demand features.

[00:08:38] Steve King Looking forward, we're already working on scenarios and analysis and sort of what this is going to look like over the next five years. These numbers will likely fall for twenty twenty when the current shifts as fast and as hard as it shifted economically. Right now, almost all ships get pulled along. But we're expecting a recovery in their numbers in twenty, twenty one. And then we're accelerated growth going out to 2025 reflecting the numbers that we see from 2011 - 2014. So in the short term, a little bit of a fall but then coming back strong for some of the reasons we've already discussed and will go into in more detail.

[00:09:21] Brian Peña Well one of the things I'm curious about, Steve, is when you look at this number and you think about the rise of platforms, obviously like MBO's marketplace platform and other platforms that have gotten greater traction and enabled individuals to really engage with enterprises more fluidly, do you think that that also influences this number? And will this change also impact the growth of those mechanisms as well, the platform economy?

[00:09:53] Steve King Yeah, one of the really interesting things about the use of platforms with this group is very few people in this group use platforms as their primary source of business. The word of mouth continues to be the most important source with other reasons above platforms. But what we have seen in this group is the percentage of them using platforms has grown. You go back to 2011, it was only in the four or five percent range in twenty nineteen, it's up into the low 20 percent range, and so it's grown very rapidly.

[00:10:29] Brian Peña That's pretty significant.

 [00:10:30] Steve King There they're using it to fill in schedules, find new work, find new clients. It's actually just becoming another channel for these workers to find work. And one of the things about that is that it makes them more efficient. That makes them more profitable. That leads to less downtime. And so, absolutely, the platforms definitely improve the profitability and the ability to get business on the part of the independent workers. It makes it much easier on the part of corporations to find the highly skilled talent and the highly skilled talent they're looking for.

[00:11:06] Brian Peña Yeah, you're never going to get away from the value of the referral process, right?

[00:11:10] Steve King Right. And I think one of the things that we're already seeing is these private talent clouds that companies putting together under various names. But I kind of what I like about what I find interesting about that as an independent worker myself is you always have an easier time finding new work. If you can reference existing work that you've done at a client. The private talent clouds that let companies get access to people that have already been vetted by other managers. That's such a plus relative to using a general-purpose marketplace. And the marketplaces are good, too. But the private talent cloud for this specific group of highly skilled professionals, those are very powerful.

[00:11:59] Brian Peña Yeah, I couldn't agree more in that regard. And the value of the private downfalls over the general marketplace is easy to be lost in the noise in a private talent cloud. You know what you're getting into. You know the relationships and you have an extension of what you would do in word of mouth. But it's enabled through a technology.

[00:12:15] Steve King Absolutely. And so we've talked about this a little bit earlier, but the trends and shifts are very strong. We're going to continue… specialized talent, hard to find skills will continue to be an issue for all companies. And there's even with the recession, the highly skilled people more or less stay in demand. As we come out of the recession, there will be an even greater demand. So we're going to continue to have an issue. The corporations are going to face is how do I get access to very highly skilled workers. So, for example, right now, despite what's going on, there's quite a bit of demand for digital transformation consultants and independent workers of all kinds. And we've seen that you and I have talked about Fiverr success in the stock market, stocks up 50 percent year to date they're at an all time highby supplying independent talent, a lot of them related to digital in some form. So you're going to continue to see the skills issue, business flexibility and agility again. You know, we're going to relearn the lesson from the last recession. Companies are going to say, boy, I really don't want fixed costs and I want to limit my fixed costs. I want to run leaner and full time employees, although legally in the US at least aren't really fixed costs. They really are in terms of how a company runs and in terms of the effort to get rid of employees to shift from a business standpoint, just a lot more agility that will come out of it. And, you know, these studies show pre-studies, pre-covid studies, but none of this has changed yet. And as I said before, it's really been amplified by all of this.

[00:14:17] Brian Peña We have a question about the pushback from a lot of these independent professionals to be payroll versus working as independent professionals. With a lot of companies definitely recognizing the value of engaging people and using direct sourcing or talent pools. There is a similarly countervailing force of government making it more difficult in many jurisdictions to hire independent contractors. How do you see that tension resolving itself if you can 

[00:14:50] Steve King Actually, that's a really interesting topic, I think, for this segment, the professional, the highly skilled professionals government actually doesn't want you. Doesn't want to push these people into payroll. I mean, have five in California, which is the law we have that's restricting the use of independent workers. There are very specific carve outs for people that are highly skilled professionals, consultants. And so, you know, I'm in the definition of all of this, maybe five, I would fall into that category and maybe five has no impact on me at all because I've been carved out. Look across at all the legislation what's being targeted are primarily the lower skilled work jobs. Maybe five was very specifically targeted, uber and other delivery companies, and it just caught up a bunch of other people that they didn't exempt. But there is something more. And across the country, that's what's going on. Now, there's unintended consequences from these laws and a bunch of people have been caught up in big and it's causing a lot of trouble, but I think we'll work through it. So we will have this tension and definitely coming out of the pandemic. One of the things the pandemic has done is it has exposed major cracks in our safety net. And so I do expect to see more protections for independent workers and or attempts to get them, in some cases, to become employees and listed as important, classified as employees. But for this segment, I think we will continue to see carve outs and exceptions because pretty much everybody recognizes that these people are not A, not employees and B, not interested in becoming employees.

[00:16:52] Brian Peña Yeah, I think that's an interesting point. You know, we always talk about how one size doesn't fit all, and that's a real education for a lot of enterprise. You know, a lot of folks on the call work with internal council who have very hard and fast and impractical policies around engaging independents. So it definitely highlights the need for more education.

[00:17:12] Steve King Yeah, and the same thing is true with our, I mean, one of the things that happened with AB five is the legislature legislators involved just didn't understand, but they had passed in terms of applications because it is a very complicated field. And so as they've come up to speed and they have been willing to make changes to the law and they're continuing to add at the law. And so and then you go back and look at some of the other states. New Jersey chose not to add onto their legislation based on the fact that California was struggling so much. And so this is going to be a long it's going to be a struggle and it's going to take a long time. But I actually think we're making a lot of progress, both in terms of providing safety net features to the people that need them and should have them. As well as understanding that we don't want to throw the baby out with the bathwater in terms of hurting the people that don't need to be employees and don't want to be employees.

[00:18:13] Brian Peña Yeah, great point. Thank you.

[00:18:18] Steve King The independents are an interesting group on average, they're they're fairly old in terms of forty nine, I have to admit, given where I'm at, that looks young, but people above our forty one year old average across the United States. They tend to be very experienced as independents. The nine years of experience reflects how long they've been an independent worker, an independent consultant. They obviously have much more many more years of work experience and they tend to be highly skilled and highly educated. Seventy one percent with college degrees versus about thirty five percent for the overall population and for the overall population in the US, about 15 to 16 percent have advanced degrees. They do skew male. A lot of the specific areas that they work in have historically been more male. The female percentage has grown over time and will continue to grow as we move into the future. But on average, you're talking about an experienced, highly skilled group of people.

[00:19:27] Brian Peña Do you see this changing over the coming years, I imagine skewing maybe skewing slightly older and obviously skewing more female over time?

[00:19:37] Steve King Definitely skewing more female in terms of the age, you have some interesting dynamics going on. First off, to be successful in this pool, meaning these highly skilled professionals, you have to be highly skilled and you have to be at it for a few years and gain the skills you need. And an equally important, the networks that you need to be successful as an independent consultant or independent contractor. So when you look at the overall gig economy, it's much younger because people in their early 20s can more easily gravitate to the to that area. At the first level, you do expect them to be a little older. We do have the demographic shifts going on and aging baby boomers are moving out of traditional employment. And at the age when they're going into traditional retirement, most of those people are not actually retiring. Our retirement ages is moving up over time and a lot of them are choosing to be independent workers or choose because they want the flexibility and the work life balance that that allows. They want to do something new or different. But also in our economy, the reality of age discrimination is very real. For many of them, being an independent is their only choice. But when you look at the rates of independent work and self employment, the highest the highest percentages in terms of workforce participation are 60 and older. About over a quarter of Americans who are employed and are 60 or older or self-employed. And so you have you have this large baby boom generation driving up the wages a little bit. You have the younger generation still getting skills. But we also have the Gen X generation after the boomers are now reaching the age where they're starting to go towards independent work more. So you have an interesting mix of polls. Younger people are more interested in it. The older people are more skilled and for demographic reasons doing it. And that's why you end up with an average age of forty nine.

[00:21:57] Brian Peña I think that's an interesting point about the older than the 60 years old. I think that's a that's a very unique demographic that probably has different ways of approaching business and different things that attract them as opposed to people who may be younger

[00:22:12] Steve King And one of the impacts that the pandemic and the related recession is going to have is that group, on average, is not really well prepared for retirement and this won't happen in the last recession. Older, that's that really got older workers or even older, again, as they weren't financially capable of retiring. But that is more psychological, the people that have the capability of retiring are now looking at this and saying, oh my goodness, you know, I could lose half my retirement in three weeks on. The stock market has come back nicely. But there is the volatility and the uncertainty makes you feel insecure. Yes. Much more likely to continue working than retiring because of that, even if you have the financial resources to continue to work. I hate to go back to my own example, but we're slammed right now with work and my businesses, myself and my wife, the two. And normally we would have turned some of this work down. But we're feeling like, gosh, we should go ahead and do it. And then it's kind of a we should be smarter than that. But the emotional side of it is very strong. And the emotional side is the scars are going to last a few years. So, yes, the older people we're expecting to see a run up of, even at a faster rate of older people delaying retirement.

[00:23:54] Steve King That's fun stuff. So when we look at the people who we've been interviewing and surveying independent workers and independent workers that are highly skilled, I like this poll for 20 years now, almost comes out very loudly. What they're looking for and the reasons that they're being independent come down to autonomy, flexibility and control. I really want to have be able to sort of pick what I do. I want to control what I do, and I want to have the flexibility to do it when and where I want to do it. And so when you look over at the percentages here, their top reasons, controlling the schedule and work life balance always come on top. When you look over on the right side of the screen, you get a couple of others many independent workers in particular these highly skilled workers also are interested in a specific field or a passion. You'll see that come out quite a bit. And then there's another group that is using independent work and starting their own as a way to start their own business. The variety of reasons. But it all tends to come back to autonomy, control and inflexibility. And we'll come back to that when we talk about what they're looking for from their clients. But also we get to the money side of this is really interesting. It's about 40 percent say, hey, I can also earn more of a lot of people, particularly in the I.T. space. You'll see this in some of the consulting areas. They'll realize that they can command premiums over their wage and salary possibilities as a W2 employee by going independent. But about thirty two or thirty three percent consistently tell us that they earn a lot less or earn less as independent worker. And what they're doing there is they're making the trade off and they're saying I'm going to do it for flexibility and control and I'm willing to make less money. It’s interesting because they're saying I can get the control and flexibility and autonomy and I can actually make more so of a nation.

 [00:26:10] Brian Peña You know, interestingly, I'm looking at these two, the two top ones controlling the schedule and better work life balance. That seems to be a recognized sort of change that's happening in enterprises right now with the move toward remote working with the covid crisis, highlighting the possibility of working in a more distributed fashion. I think these two things, allowing people to control their schedule more and better work life balance are also going to become a major component of a lot of work environments. Do you see that being one of the reasons that becomes less attractive to be independent if more companies are offering it?

[00:26:44] Steve King Yeah, it's really interesting when you actually study this, one of the things you're constantly looking at is the competition between the attractiveness of a traditional job versus of being independent. And historically, when you looked at it, the the reasons were very straightforward. You know, you made money of your things were more reliable, more secure, better benefits in a traditional job but you had more flexibility. Going into going into the covid crisis. We've seen companies already try to do a better job with work life balance, do a better job with flexibility. That's certainly been accelerated. But in the short term, one of the interesting aspects is almost everybody's reporting that they work more than they did before. They're on their on the zoom calls all day. A lot of their coworkers are also dealing with their kids. And so they they're working at nights, they're working weekends. And so I do think we will definitely see more remote work. We will definitely see more workplace flexibility. But I think and I think independent work will continue to be attractive because there will just still be more autonomy and control.

[00:28:05] Brian Peña Excellent. Now, this slide somewhat surprised me,

[00:28:10] Steve King So this is the professions and it's always interesting asking independent workers and particularly highly skilled independent workers what they do, because a lot of them are so specialized, you don't get an answer like consulting. You get an answer like I do supply chain logistics for the defense industry. So it's a pretty specialized a lot of people are very specialized in what they do. But when we look across it, the biggest area by far is a consulting area. In general, we add in coaching, coaching coaching's one of the fastest growing fields in personal services and professional services. It's interesting. I don't know how many people who are on this webinar watch the popular TV show Billions, but oftentimes culture reflects what's happening in the real world. And one of the key characters is actually a coach or the protagonist from X Capital.

[00:29:12] Brian Peña Yeah, yeah

 [00:29:14] Steve King Colonel Coach. But she's a coach and it kind of reflects what's going on out there in terms of coaching. The creative fields have always had a high percentage of independent workers. And so there's no big surprise there. Information technology is lower than most people think. And part of the reason for that is, again, we're asking people what they do. A lot of people who consider them are doing web design, who probably would fall into many people's definition of information technology, rober and creative and a lot of people doing project management of I.T. and digital transformation. Things fall into consulting. And so I do think this understates it a little bit a whole lot. And then, of course, health is mostly pharma, biotech, which are very independent worker, not employee labor intensive. And then in the health. And that's really reflecting of that those numbers. I think the other piece to notice here, about 30 percent, this adds up to about 70 percent and there's another 30 percent. That's other independent workers and independent professionals serving businesses are in all fields. You can go into any department, any area of a major corporation. You're going to find independent workers and not employee labor.

[00:30:37] Brian Peña Yeah.

[00:30:39] Steve King What about it surprised you?

[00:30:43] Brian Peña Oh, I was surprised with the prevalence of coaching. I mean, I thought, you know, one of the things I didn't realize until I really came to MBO was the size of the coaching industry, as it were. And how many people are holding themselves out to do coaching, which is a necessary function. And I also do watch billions, and I do love that show. I think it is a unique character, but that's the part that really struck me. I think consulting I was not surprised by what the prevalence of coaching in the magnitude of that independent economy is, which I found really striking.

[00:31:15] Steve King Yeah, it's actually a good example of online systems democratizing. You know, the coaching industry has been able to figure out how to deliver their services online and making the cost accessible to a lot more people to up and down organizations. Some of the organizations of large organizations we work with have coaches down to know individual contributors. Yeah, which is a good thing.

[00:31:46] Brian Peña And what's also really interesting about this is these are all professions that have relatively low barriers to professional entry. Right. None of these guys have to be on the laptop, have to really enhance tremendously to become a business. They just have to have a business card, a laptop and maybe a website, and they can engage with any of the platform companies are to hold their shingle out on the next, you know, as soon as they decide to do so.

[00:32:13] Steve King Yeah, the vast majority of these people we've asked this in the past have invested less than ten thousand dollars to get their business going. Because it is basically have laptop will travel using your experience.

[00:32:32] Brian Peña Yeah, I often use a line at the Hewlett Packard garage has been replaced by the laptop on the kitchen table. You know, that's my favorite go to phrase. And these people are happy.

[00:32:45] Steve King They're very happy. I find it. The data has been very consistent over time. And what we find is that when we ask about satisfaction levels, see this eight to 10 next to that is a you know, we'd give it a one to 10 scale or 10 is, you know, we're ecstatic and one is we hate it. You see, that highly satisfied group is three quarters and then we have seven. Those answering seven, which is still satisfied, get you up almost 90 percent. So it's a very satisfied group. Now, within that, there's always a group that we call the Reluctant Independence. And if you look down to the second to bottom, you see prefer a traditional job. Twenty one percent, one in five are still telling us. Really rather go get a traditional job and for any number of reasons, they're not able to do that, they may not be able this group generally speaking, they could have found a traditional job prior to covid will be able to post. But there's a lot of logistical reasons, life's reasons why you don't. The interesting thing about that is over the last five years, that percentage has fallen dramatically. And that was in the 30 percent range just five years ago because the job market tightened up and companies were out chasing, trying to get independent workers to become join their firms as traditional employees. And so we've seen the number of reluctance and the percentage fall. One of the things that's been really interesting for us over the last few years is there's been a lot of work done by others and some work done by us looking at health, wellness and happiness. And I'll be honest with you, when you're a quant person, math guy studying wellness, it just freaks me out.

The data is really, really, really squishy.

[00:34:53] Brian Peña Yeah, yeah. Squishy data, totally understand it.

[00:34:56] Steve King But we're seeing very strong correlations with happiness and engagement, both in traditional employment and independent work. And what we're finding is that on average, independent workers in this group of highly professional independent workers score very high on both wellness and happiness, and that they also score well on engagement, which is not on here. And so but I think that's one of the most interesting pieces we're finding. People are simply happier and believe that they're healthier by being independent workers. And it's a real attraction. These so that you see that almost 80 percent report being independent in those percentages. It's seventy nine, 80 percent plan on continuing, but another four or five percent say they're going to retire fairly soon. So it's really higher than the seventy nine, even

[00:35:51] Brian Peña A much higher number in real terms. And these numbers have been consistent since the inception of the study. Correct.

[00:35:59] Steve King They've actually gotten a little stronger. And again, it was because of the reluctance for leaving a group of people that really didn't want to be an independent worker, there's a if you actually  it can be very challenging, depending upon your risk profile. And what we see when we do risk profile analyzes is there's a chunk of people who really want the security and stability of traditional work. That's actually about 60 percent of the US workforce. And so most people don't want the lack of predictability of income, the lack of stability, frankly, the lack of security that comes with being independent. And so when people are put into that position, what we call the reluctant independence, they tend to be less happy. As I mentioned before, have been leaving. And so that leaves you with the happier people. So the managers have actually gone up. We'll go down over the next 18 months because a lot of people who lose their jobs will become independent workers. You're going to see the reluctance go up

[00:37:09] Brian Peña The concentration of happiness is higher.

[00:37:13] Steve King Yeah, yeah, absolutely. And related to all this is the ability of these people to choose their clients is also then going up. And in particular, if you look at the darker blue where they tell us that they have a lot of choice and who they work for in the last three years alone has grown from forty eight percent to 58 percent, which is a pretty sizable jump in that time frame. And that's driven over the last few years, of course, by corporations using more external and not employee talent and also skill shortages that are out there. So that combination has led to the ability of these highly skilled independent workers to be choosier around who they work for. And if they're not offered the right attribute for their project, tasks they choose to take take their skills elsewhere. We've also seen over the same time period reflected in another reflection of the increased demand for these people is that their incomes have also gone up. And so we've seen it in both measures their ability to actually pick and choose their clients as it's gotten better for them.

[00:38:30] Brian Peña This is the most compelling slide to encourage companies to think about implementing an independent talent strategy. The notion is, do you want these people working for the competition or for you? And the fact that they have a choice, they have several clients to choose from. Makes a lot of the unnecessary bureaucracy and nonsense that many people may put them through seem that much more of a competition inhibitor. And look at the slide.

[00:39:02] Steve King Yeah, and related to this as part of this, the study for this year, we did some interviewing with corporate employers, either from H.R. procurement, but also hiring managers. And one of the things that came out loud and clear is they had perceived it is getting harder and harder to find the highly skilled, independent talent. We’re hearing from both the independent workers themselves that they are in more demand and we're hearing from the companies telling us, gosh, these people are in more demand. So we're hearing it on both the supply and the demand side. Now, those dynamics are about to change, have changed in the short term. And so there is you know, there's much less demand and there's going to be more supply. But even now, in areas like digital transformation, we haven't seen reduced demand and or nearly as much reduced demand. And supply hasn't gone up yet. So even now, with the economy in the tank, there's accessing assessing the skills that you want for the economy. The economy's down is necessarily easy.

[00:40:19] Brian Peña Yeah. Yeah. You would think it would be.

[00:40:23] Steve King So what are these what are these independents want when they go out and look at a potential client assignment, what are they actually looking for? If we go back to the fact that they want autonomy control and flexibility, you can kind of see some of these and the two percentages, the percentage on the left is the thing that they list is very important and the percentage on the right is important and they list is important. We give him a five point scale to choose from. And as you can see, not surprisingly, when you ask questions like this, everything's important. Some level. Those are fairly high. But when and so you have to kind of rank order them to understand. So the first thing to look at is, is sort of in the middle actions, reactions, control over my work, work on tasks that I enjoy, primary work, location, and there's a strong preference for remote overall that's back to control autonomy and flexibility. So right off the bat, you get back to who these people are and why they chose to be independent. And as you're looking to hire them, understanding their psychology and understanding why they're doing what they're doing and as best you can, giving them the ability to meet their objectives will make you much more attractive to them as a hiring organization. And so that's very clear. The ones that came out interesting to us that's grown quite dramatically. Well, quite rapidly for this type of data over the last few years is they're also looking to expand their skill sets and so important to new skills, work assignments help me grow professionally. The half life of skills is fallen. People have a much better understanding, particularly independent consultants and independent contractors, that they have to continually up skill. And when you think about it, they live and die based on their ability to be at the leading edge of their fields. And so one of the things you're looking to get from them when you hire them is highly leading edge of their skills and being highly skilled in their area. And they are that but also giving them the opportunity to flex their muscles and expand a little bit definitely makes it more attractive. And of course, down at the bottom, everybody wants to be paid well and paid quickly. But if you notice, those don't again show up at the very top.

[00:42:58] Brian Peña A couple of things jump out at me when I look at this. One is, is the importance of developing new skills is often something that is might be missed by a lot of companies and how they present the opportunities to the market. A lot of it is much more about pulling in requirements as opposed to pushing out the benefits of a role. So I see opportunities for companies to take another look at how they attract this group by highlighting the value of the experience or the job in developing new skills and growing their own professional careers. That's an interesting insight that I gained from this one.

[00:43:36] Steve King Yeah, and when we talk about gaining new skills and work assignments, it help. It's not like a programmer. A programmer now wants to learn how to do art or something. It's the opportunity to really build on a base of skills and maybe just move slightly adjacent to where they currently are just to be able to go deeper from where they currently are. And so it's not sort of greenfield skills, it's that slight expansion, adjacent areas getting a little deeper into their field. So there's plenty of opportunities to both bring the assignments and give independent contractors a little bit the ability to flex a little bit to to attract them. And then I want to go back to the very top. These are the two that are both very valuable and particularly value my work. These are also the two that the independent workers we've talked to and surveyed tell us are the things that corporations do the least well in interacting with them. And so when you're an independent worker, you're living your work day to day, and you really want to do you really want to be valued as a human being and also as a skilled professional. But the last thing you want is to have the client tell you or appear to tell you that we don't really care what you're doing. Yeah, we're paying good enough. And so those companies have no mechanism to or even think through the fact that knowing that your work's valuable. And so one of the things we hear from these independent contractors is firms where the hiring manager simply says, hey, good job, reports back on lets them know how their work fits into the team's work, into his work and the company's objectives. It's not that they're asking for very similar sets of feedback that employees ask for. And I think you have to be very sophisticated in how you do it. You just have to recognize their work and make it clear to them you understand that their work is is helping you and improving the value of what you're doing as the hiring manager. And then the related thing is most independent workers want to be treated as part of the team. They understand they're not fully part of the team. They understand that there's many things that you cannot do legally or for other reasons in terms of having them as part of the team. But they really do look, particularly if there are longer term projects, more than more than a month or six weeks, they really do like to be incorporated into team activities and treat a part of the team. Those are the two single biggest items that they report companies don't do. It strikes us that those are both things that are fairly easy for companies to do.

[00:46:43] Brian Peña Yeah, yeah. It seems like it's just things that are relatively warm. Water makes things wet and handling personnel just in general. Everybody wants to feel valued. Everybody wants to feel like they're part of a team. But it often is very helpful to remind that because so many companies think they have to keep a Chinese wall between the way they treat and evaluate and value their employees versus their extended workforce. So this highlights that CASM.

[00:47:15] Steve King Yeah, and I think it's very fixable. Yeah, and an opportunity for companies to excel relative to their competitors.

[00:47:25] Brian Peña The one thing that also jumped out of me was the bottom one, which is being paid quickly. So many people who are running programs right now struggle with their finance departments, pushing more extended payment terms that are absolutely anathema to a lot of independent professionals or even engage in human capital as a whole. How would you argue against that necessarily?

[00:47:49] Steve King Well, the paid quickly piece whether you're a very small business or micro business or an independent contractor, you do live and die on cash flow. And so you're very aware of how your payment terms. And so there's a couple of options here. One is, if you are paying people on a statement of work basis, be willing to pay a decent amount up front. And then that kind of gets around this to a certain degree, even if you're delaying your payment terms, if it's particularly if it's a longer term project, if you're paying more weekly or which are very good ways also. I know it's hard to go to your finance people who are actually rewarded by. But the reality is you're going to hurt your talent paying a reasonable amount of time and a reasonable amount of time. Still, most independent workers like, you know, accept 30 to 45 days is a reasonable amount.

[00:49:09] Steve King For this group as well as. And if you want a lot of a group of people. Necessarily or for them quickly. Speaking one of the things I find interesting about this corporate finance system.

[00:49:32] Brian Peña Steve, we're having some trouble hearing you might want to turn off your camera to save bandwidth.

[00:49:38] Steve King In most cases as a percentage of. As a percentage of your accounts payable, it's so tiny that it's kind of OK until you're not, but in terms of capital, it is outstanding. You're supplying.

[00:50:08] Brian Peña OK, Steve, I think we're having some challenges with your audio. Can you hear me?

[00:50:15] I can hear you.

 [00:50:16] Brian Peña Yeah, I can. I can. I think we have time for one last question. Technology permitting, really, if you were to, you know, what are some of the top five recommendations that you would give to a lot of the program owners on the phone? To do now today, to prepare for the upturn, what are some things that you would recommend companies do?

[00:50:36] Steve King Well, I think I think in the short term, you've got to identify continuing to make investments and in terms of being more virtual in how you act with your customers and so identifying those areas and quickly going out to secure talent in those areas because. Frankly, everybody is looking at those same areas at the same time, and so talent in those areas is getting sucked up. In the very short term, I'd look at that as I got to the medium term. aoance the pandemic settles down and shakes out, we start. From our scenario perspective, we're obviously opening up now, but it'll be twenty, twenty one where before we get.

[00:51:42] Steve King Then you have to start to figure out, OK, given what's given what we've gone through, what's my company likely to do in terms of its approach to business and its business model? Oh, good chance you're going to hear you know, we're not going to bring everybody back. There's a study out of Harvard right now, no, University of Chicago saying that forty two percent of the people that have been laid off will not be rehired. Their estimate but I agree. And everybody says, well, everybody's going to immediately come back to work. No companies are discovering they can do more with less. Companies want to be more lean. Companies want to be more flexible. So you're going to see a reduction overall in unemployment rates that are going to stay relatively high. But what that means is there is going to be more need for filling with unemployed labor. So it's time to start planning how you're going to do that and identify again in the medium to longer term what skills we're going to need, what kinds of people are going to need and start figuring out how you're going to get them, because, again, those same people are going to be the ones in demand. So those are my five year term the next year.

[00:52:59] Brian Peña Those are great insights and a depressing metric to end the day on.

[00:53:06] Steve King The good news is we do know this end.

[00:53:11] Brian Peña Yeah, but that is true.

[00:53:13] Steve King Or there's a ninety seven percent chance.

[00:53:17] Brian Peña Yeah. I'm not sure I like those odds, but I'll guess we'll have to take them. Steve, thank you so much as always. A fantastic discussion. I learned a lot. I certainly hope you got a lot of value on the phone. Feel free to reach out to this email address if you have any questions about it on your mobile contact until next time. Everybody stay safe and we'll see what some of our next events. Thanks, everybody. Thanks, Steve.

[00:53:41] Steve King Thanks.