Organizations today need to go looking for talent in a tight labor market. In June 2021, the VDAB received a record number of job openings: 33,760, more than double the amount of job openings in June 2020 and June 2019. Job openings for experienced workers, highly skilled workers and permanent contracts have the largest increase. With the outflow of a large generation of Baby Boomers, the labor market will only get tighter in the coming years. At the same time, in the first six months of this year more than 60,000 startups already took the entrepreneurial plunge. A quarter more than last year, despite the coronavirus crisis and all the restrictions that were still in place for much of 2021. A significant part of those startups are freelancers.
A traditional labor market
Working with freelancers is no exception. In 2018, we conducted research with SD Worx on the flexible deployment of talent. This showed that 95% of organizations surveyed hire freelancers. In most of these organizations, at least 10% of the workforce consists of freelancers. Remarkably, these freelancers work significantly more in core activities than in no-core activities. This means that "borrowing" talent is not only seen as a viable option for tasks that are considered relatively unimportant but also for tasks that lie at the heart of the organization.
Yet, many companies still feel hesitant about working with freelancers. Belgian employers prefer to hire permanent staff for new job positions. No less than one in two job openings is filled by a permanent employee (52%), preferably an experienced worker. Three out of ten positions are filled by reskilling employees. Only one in five is filled by flexible workers. In this, Belgium is left behind by neighboring countries such as France, the Netherlands, the United Kingdom and Germany.
Flexible talents within your organization
Despite this hesitation, one can no longer underestimate the importance of freelancers for the labor market and within organizations. They have increasingly become a flexible pool of talent that is not only important to absorb volume fluctuations. Many freelancers work in the core of the organization or are hired because of their unique competencies. Our research shows that motives for hiring freelancers vary. The top two reasons are (1) the greater flexibility that comes with it, with 65% agreeing that this is at least a relatively important motivator, and (2) the fact that people with specific expertise are hard to find in the labor market (63%). The least important reason is a possible staff hiring freeze (28%). Interestingly, 36% also cited as a reason the person's preference for self-employment instead of being on the payroll.
Toward a “war for flexible talent”?
For many freelancers, making the move to self-employment is a conscious choice. Our 2018 survey of freelancers showed that interesting job content (69%) and the freedom to choose what work you do (68%) were the most important reasons for becoming a freelancer. Only a minority (15%) became self-employed because they saw no alternative.
A career as a freelancer fits in with the idea of flexible careers: the standard is no longer a permanent job with the same employer throughout one’s career. It also puts career ownership explicitly in the hands of the individual. Though freelancers are a minority in the workforce, a well-thought-out policy on why and how to deploy flexible talent has become a critical HR issue. Especially as the competencies and experience that are brought in by freelancers become more critical to your organization and as more people with unique competencies in a tight labor market are no longer interested in a permanent contract.
"It is the current interplay of a 'war for talent' and a tight labor market that creates opportunities for talent in the labor market to personalize the employment relationship: they do not opt for an employment contract, but a freelance status and ditto agreement to - primarily - provide certain services to a client."
Jan Laurijssen, SD Worx
The need for an overall vision on talent
Making sure that you have the right talent, has clearly popped up as a priority throughout the research we have been conducting since the launch of the Chair. In 2012, for example, one in two organizations surveyed said this issue was high on their executive agenda. In 2016, 28% feared a talent shortage. By our 2018 survey, this figure had risen slightly to 31%. In our most recent employer survey (June 2021), 34% fear that hiring will not get any easier in the coming months. This calls for a more open view on talent, not only in terms of the flexible use of internal talent but also in terms of working with external talent. Deploying flexible employees will soon no longer be a solution to the “war for talent” when these external employees also become scarce and get to choose between several attractive jobs.
Despite the fact that these concerns have been around for some time, we see few trends toward a more proactive approach based on an overall vision on talent. For example, only a minority of the organizations surveyed have a formal career policy (10% in 2012, 15% in 2016).
In 2012, half of the organizations surveyed said they had no career policy at all, and 2 out of 3 were dealing with careers primarily on an ad hoc and reactive basis.
Toward an inclusive talent policy
This lack of proactive approach is even more pronounced when it comes to integrating flexible talent within the organization. Although many companies are hiring freelancers, for only a third of them is this part of a strategic workforce planning strategy. 32% indicate that hiring freelancers is done on a rather ad hoc basis.
Given the rise of flexible talent within organizations, it is high time for employers to work on an inclusive and flexible talent policy. This will not only strengthen the foundations of your organization and make them future-fit, but also enhance your resilience as an organization and the sustainable deployment of talent.
HR policies and systems should therefore not exclusively focus on a shrinking group of payroll employees, but should be inclusive. This requires a rethinking of traditional approaches. In this context, developing, recruiting and temporarily deploying talent should no longer be seen as mutually exclusive options. Employers need to think about integrating these three practices to create sustainability in employment and positive long-term relationships, even after a contract has ended. This will not only help you to present yourself as an attractive company to the pool of flexible workers too. It will also provide freelancers with a stimulating environment to develop themselves, enhancing their loyalty to you as a preferred client.
10 blog posts for 10 years of Next Generation Work
This blog post is the sixht in a series of 10. In each blog post we will offer solutions from different perspectives, as a count down to November 2021, the moment when we bring everything together in the celebration of 10 years of Next Generation Work. We already look forward to welcoming you there. More information will follow in the next few months.