Buy, build, or borrow – these are three strategic approaches to acquiring the talent a business needs to achieve and even exceed its targets, goals, and objectives. Simply put, buying talent is when companies hire talent directly through external sources like recruitment firms. Building talent is when businesses invest in their existing workforce through training and development opportunities that address existing skills and knowledge gaps. Finally, borrowing talent involves leveraging contingent or contract talent for urgent or temporary needs.
Borrowing Talent
The growing number of companies realizing the value of borrowing talent continues to be a response to the quickly evolving nature of the business landscape. By borrowing temporary talent, companies can quickly scale up their workforce and acquire skills and expertise that they don’t have in-house while also limiting their liability and risk exposure. Agility, flexibility, and responsiveness are critical in changing market conditions, and contingent workers provide just that.
It’s no wonder that the average percentage of contingent workers in a company’s workforce has been steadily increasing over the years. According to recent data shared at the 2023 Staffing Industry Analysts Executive Forum, they accounted for 12% of the workforce in 2009. This number went up to 21% in 2022 and is projected to reach 22% this year and 28% in 2032. This indicates a significant shift in the nature of work, with more companies relying on contingent workers for their workforce needs.
In this article, I’ll explore the factors influencing this shift to borrowing talent, as well as strategies for implementing this talent solution.
The Utilization of Borrowed Talent by Companies of Different Sizes
It’s worth noting that small and mid-sized businesses (SMBs) and Fortune 1000 companies are utilizing contingent talent in different ways. Both strategies effectively meet their respective company needs. However, it’s beneficial to understand the diverse ways in which the extended workforce can be leveraged to scale the business, address skill gaps, and serve as a financial driver.
SMBs often face the challenge of scaling up quickly to meet project-related work or unexpected increases in business. To address this, they may rely on external resources or borrowed talent. This approach not only helps them deliver on projects and seasonal work but also enables them to manage employment risk. Additionally, SMBs may use borrowed talent when they lack internal talent acquisition resources. By leveraging these external resources, SMBs can scale up efficiently and effectively while ensuring they have the right expertise to meet their business needs.
Fortune 1000 organizations, on the other hand, strategically use borrowed talent for effective management of their “fixed cost” employment population. This solution involves deploying a variable-cost talent strategy that can be scaled up and down based on market conditions and cycles. This approach can drive a material financial outcome given the scale of the community. Additionally, borrowed talent can be used to access specialized skills that may not be available through traditional channels.
Factors Influencing the Growing Popularity of Borrowing Talent
Global Business Environment | Organizations need to demonstrate agility and flexibility in their operations in today’s rapidly changing global business environment to maintain a competitive edge. Consequently, many companies have adopted the strategy of employing temporary or contract workers to respond quickly to fluctuating market conditions. Temporary workers provide a flexible, cost-effective solution for organizations to scale their operations up or down as needed without having to commit to long-term employment contracts. Additionally, temporary workers bring a fresh perspective and new ideas to the table, which can help organizations stay innovative and competitive worldwide.
Technological Advancements | As technological advancements in the IoT, AI, MedTech, fintech, blockchain, robotics, and beyond continue to be made, it has become more challenging for businesses to keep up with the latest developments in their respective industries. The demand for specialized skills and expertise has led to a scarcity of talent in certain sectors. This has resulted in an increasing number of companies seeking contingent talent to access the skills and expertise required to remain competitive. Borrowing talent can provide companies with access to specialists in fields like those above, who may not be available internally or affordable to hire on a permanent basis.
Diversity & Inclusion | Diversity and inclusion in the workplace have become an important business priority for organizations worldwide. To achieve this goal, many companies are seeking candidates from a wider range of backgrounds. One effective way of doing this is by borrowing talent, which allows organizations to access a more diverse pool of candidates who may not be available through traditional recruitment channels.
A Deeper Look at Specialized Skills
It is worth noting that the days of contingent roles being only for entry-level positions or basic functions are long gone. Often, the quickest and most cost-effective way to access specialized expertise is through contractors or freelancers. A recent report highlights this trend, showing that in 2021, around 48% of contingent workers had less than five years of experience. In 2022, that percentage dropped by half, while the number of workers with ten or more years of experience increased by two-thirds. The same report suggests that going forward, even more experienced workers may be hired on a contingent basis due to uncertain economic conditions, in what it calls an “elastic talent strategy.”
I witness the value of accessing these specialized skills by engaging temporary talent every day at Atrium. For instance, a start-up online therapy platform was able to meet a sudden surge in demand by leveraging temporary talent with medical coding experience. This allowed the company to offer seamless client support and maintain its reputation for high-quality service. With the help of skilled temporary talent, the company was able to access the necessary expertise without incurring the cost of hiring full-time employees, scale up its operations, and expand its reach to a wider audience.
Similarly, this second example demonstrates how temporary talent can help organizations optimize their processes and stay ahead of the competition. By accessing skilled individuals for positions like Loan Processing Administrators and Loan Origination Processors who were also proficient in Salesforce, a leading financing solutions organization was able to assist businesses in retaining their workforce through Paycheck Protection Program loans during the COVID-19 pandemic. This enabled the organization to streamline the loan forgiveness process and provide timely relief to its clients, enhancing its reputation and market position.
Strategies for Borrowing Talent
Borrowing talent can be a game-changer for companies looking to gain a competitive edge. By prioritizing this approach, businesses can access a wealth of specialized skills and knowledge that would otherwise be difficult to acquire. Here are five proven strategies to make the most of this borrowing talent.
1. Identify Skills Gaps
SHRM reports that 83% of U.S. companies struggle to find workers with the right skills. Conducting a skills gap analysis can ensure that your company is not one of them. This will help identify areas where your workforce is lacking. Once the necessary talent has been identified, it is time to utilize the gig economy in order to bring on contingent or contract workers with the required skills. This cost-effective approach saves time because businesses won’t have to invest in extensive training programs or hire permanent staff with the required expertise.
2. Partner with an Expert
Companies should focus on building relationships with external partners such as talent solutions firms like Atrium to improve their workforce agility and effectively scale operations. These firms have the expertise to create and implement custom temporary talent solutions that align with a company’s specific needs. By partnering with these firms, companies can tap into a pool of skilled temporary candidates sourced from referrals, job boards, and recruitment marketing campaigns – channels that they may not have the capacity to manage on their own. Think holiday hiring for short-term positions or IT recruiting for project-based initiatives. Additionally, recruitment experts like those at Atrium can help navigate the complex employment legislative landscape and ensure compliance.
3. Pipeline Talent
Developing a talent pipeline of candidates for temporary positions can benefit companies in many ways. There are two ways to achieve this – firstly, through trusted recruiters who have a pool of pre-vetted candidates ready to go for urgent or project needs. Secondly, Direct Sourcing is a popular and effective recruiting method that leverages a company’s own brand and internal talent population to fulfill contingent needs. Direct Sourcing can help companies tap into a curated community consisting of known talent, including interns, referrals, independent contractors, alumni, retirees, and “silver medalists.” It enables companies to access passive talent while making the most of the talent pools they have previously developed.
4. Leverage Technology
When strategizing to borrow talent, companies must have the right workforce technologies in place. Some of the technologies that can be used to streamline the process include Vendor Management Systems (VMS), Freelance Management Systems (FMS), Applicant Tracking Systems (ATS), and Spend Management and Procurement Systems (SMS), among others. By leveraging these technologies, companies can gain valuable insights into their temporary workforce spend and data analytics. Because of this, it’s important to work with a talent solutions partner who can help build the right tech stack to meet your specific needs.
5. Track Results
The data analytics mentioned above will play a significant role in measuring the effectiveness of your talent acquisition strategy and workforce planning initiatives. Businesses should track KPIs like employee satisfaction, productivity, retention, and conversion to full-time employees, as well as the cost and time involved in acquiring the talent. By doing so, businesses can make informed and strategic decisions, reducing the risk of high turnover rates and other staffing challenges, optimizing their hiring processes, and achieving significant cost savings.
Final Thoughts
The power of borrowing talent cannot be underestimated in today’s competitive market. With the accelerated retirements of baby boomers, the rapid advancements in the technology landscape and a growing market desire for diversity and inclusion, traditional recruitment channels may not be enough to keep businesses ahead of the curve. By prioritizing borrowing talent, companies can access a wider pool of candidates, fill skills gaps quickly and cost-effectively, and scale up their workforce to meet changing market conditions. As the future of work continues to evolve, businesses that embrace this approach will not only remain competitive but also stand out as innovative and agile employers.
