Have you ever been recruiting for a role for weeks or months only to find there is a lack of skilled talent in key business areas? We've started to hear this from HR teams across the U.S. The skills shortage is certainly becoming more real each day, 73% of CEOs say it is a threat to their business, so where are the resources to fill this need?
We believe the answer lies in the continued rise self-employed professionals, a population that brings highly specialized services to the workforce. The number of self-employed individuals in the U.S. increased to 40.9 million in 2017, and generated roughly $1.2 trillion of revenue for the U.S. economy—equal to about 6% of U.S. GDP. Not to our surprise, many of these independent professionals have the competencies HR teams are seeking.
So, this leaves us with two options:
1. Convince these resources to leave their flexible, high-paying independent work, or
2. Shift talent recruitment strategy to include the use of independent professional resources on a project basis
The large majority—77%—of independent professionals surveyed say they are happier working on their own than in a traditional job, so convincing them to join you full time is likely either costly or unattainable. Rather than creating a role that will require employment with a salary, consider if your organization’s needs could be better met with a project. By shifting your talent acquisition strategy, your organization can tap a wider pool of expert-level professionals who happen to be independent.
But aren’t independent contractors risky? Yes, engaging independent contractors can be risky, but by working with a compliance and engagement partner, companies can onboard these resources at a cost effective price without all the risks commonly involved. Staffing firms are an option for engagement too, but many independents chose not to engage through these companies and the cost can be prohibitive.
Once independent professional talent has been identified, their information can be stored in a private, front end marketplace. Here, individuals can create a profile, update their availability, and be matched to open projects. A backend system handles the invoicing, payment, and compliance vetting. These platforms should allow organizations to build their own talent pools, and create both access to and best engagement practices of contract workers.
Collectively, these practices are referred to as direct sourcing. Direct sourcing allows organizations to identify candidates for available opportunities using their own resources, decreasing reliance on third party intermediaries. This helps reduce attrition rates by hiring the right person the first time around, and takes the headache out of the recruitment process by removing legal and compliance risks.
In order to make the most of direct sourcing practices, organizations need to create an adaptable, robust program that can handle independent professional engagement, compliance, management, and retention. We refer to this solution as an Independent Professional Operating System. There are four key elements to this approach:
1. Classification intelligence
As previously mentioned, in order to minimize the risk associated with independent contractor engagement, organizations will benefit from working with a compliance and engagement partner. Firms like MBO Partners—the third largest business-focused human cloud platform—have extensive experience in independent contractor vetting and management, and can help minimize misclassification risk.
2. Engagement options to support proper classification
Independent professionals have different levels of self-employability, and individual needs and requirements. It’s essential to work with a vendor that can provide flexible engagement options so your organization can provide a solution that works for everyone. You don’t want to force people into the wrong engagement solution—square pegs need square holes.
3. Curated talent communities
A curated talent community provides organizations with access to a group of vetted independents that they can use to fill project needs. These communities—like MBO ConnectTM—not only help hiring managers decrease time spent on recruiting activities, increase visibility into the hiring process, and ensure compliant engagements, but they also help companies thoughtfully build and grow their own pool of talent, and supplement that talent pool with the right types of marketplaces based on talent needs.
4. Comprehensive technology layer
Lastly, integrating the right technology platforms ensures all independent professionals are directly sourced for assessment and engagement. Technology can help facilitate an initial and ongoing compliance process, create a curated talent community, standardize payment, and gather valuable data that can be easily reported on and measured.
A program that incorporates these four elements will not only minimize misclassification risk, save costs, and attract top talent, but it will help position your organization as a forward-thinking leader, both among peers as well as among the independent professional community at large.
Should you have any questions about updating or creating your own Independent Professional Operating System, we’re always here for you.
Dustin Talley, Director of Solution Design, serves as a consultant to MBO Partners Enterprise clients and assists them in designing and deploying their direct sourcing strategy. Interested in learning more about leveraging tools and resources to build/enhance your enterprise’s Preferred Talent Network? Explore MBO Connect™, the new face of direct talent sourcing today.
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News and notes for independent workers and their clients. This is the February 20, 2017 edition of The Weekly Independent from MBO Partners.