Today’s companies are experiencing a serious skill gap. According to McKinsey Research, 87% of organizations say they either have a skill gap right now, or will experience one within the next five years.
If you look at the most recent Department of Labor statistics, there are more than 10.1 million job openings, and 8.6 million people considered to be unemployed. That’s because those 8.6 million job seekers do not have the required skills for the open positions.
What’s causing this skill gap, what can businesses do to overcome this huge challenge?
High demand skills are in short supply
The first thing to understand is that the skill gap is not a generic employee gap. It’s not simply a matter of finding unemployed people to fill open vacancies. Instead, the skill gap is about the kinds of talent that are available versus what is in-demand.
In-demand candidates are those with cross-cutting skills, those that, in the Future of Jobs report are defined as “applicable and easily transferable across many occupations and roles.”
Top examples include SaaS product managers, digital marketing, AI professionals, data scientists, software development, and business management. Your company should do a skill gap analysis to identify your company’s current and future gaps.
In contrast, those with expertise in areas such as manufacturing, communications, travel and non-tech customer support are expected to be in decreasing demand through 2026. This may cause a lot of people to be out of work, but as these jobs are becoming obsolete, that doesn’t mean they will be able to fill the available vacancies.
Employers are struggling to attract the right talent to meet the skill gap
With needed skills in short supply, there are fewer candidates on the job market than the open roles available. Great for candidates with the right skills, but tough for businesses.
Organizations are increasingly being forced into a cattle market, where they need to offer higher and higher base salaries and more winning benefits and perks to turn the heads of potential employees. In many cases, smaller tech companies simply don’t have the resources to offer a huge signing bonus or a salary that can compete with the tech giants or the well-funded start-up next door.
Even if you can leap these hurdles and sign your ideal candidate with the right skills under their belt, once these candidates have signed on the dotted line, the problems don’t disappear. Organizations still need to worry about the prospect of head-hunters, and look out for poaching from external recruiters who can offer your best employees a more competitive package to jump ship.
Can employees and businesses upskill to meet the skill gap?
One answer is to work on upskilling your current employee-base. By offering opportunities for learning and development, you can kill two birds with one stone. First off, you’re future-proofing your company by creating in-house the needed skills for your own business roadmap, and second – you create opportunities for professional development within your staff, increasing loyalty and supporting employees in their own growth.
Let’s say for example you know that you’re investing heavily in data and AI over the next five years. Offer to fund a course in machine learning technologies or human computer interaction for your product or engineering teams. If you know that your persistent vacancies are in digital marketing, see if your current marketing managers would jump at the chance to learn user acquisitions advanced techniques or take a deep-dive in current social media trends.
However, this is only part of the solution. Remember our earlier stat from the Department of Labor? There are more vacancies than candidates, and your employees already have their own day jobs, which may be equally difficult to fill if they upskill to the next opportunity. It can also be expensive to upskill employees, with no guarantee they will stick around once they’ve added the feathers you’re offering to their bow.
Leaning on the gig economy to close the skill gap
However, the first thing businesses need to reassess is their company’s workforce planning from a strategic point of view.
Employers would be smart to reframe the way they consider recruitment and hiring, and broaden their pool of candidates to include independent contractors, gig workers, and freelancers. Ask yourself, what outcome are you looking to achieve? The chances are that you need a particular skill or experience to execute certain tasks that a talented freelance talent can do. What you might not need as much as you think you do – is a full-time employee who works only for you.
In many cases it makes more sense to hire 3 freelancers, every freelancer with a unique set of skills, to do a job of one full time employee that cannot be an expert in all 3 tasks.
One of the main benefits of looking to freelancers to fill the skill gap is gaining agility and flexibility for your business requirements. This means that you can get the skills that you need, when you need them – quickly scaling a team with an army of freelancers to complete a short-term project, and then dismantling it as necessary when the project is complete.
Think about creating a new website. You can have a single in-house digital marketing manager for example, who works to oversee a team that includes a freelance video editor, a graphic design agency, a solo content writer, and a independent web developer, all of whom are at the top of their game, and can be paid for a single contract rather than brought on full-time at heavy (and often unnecessary) expense. This is, actually, who we work here at Stoke Talent.
This also works for longer-term roles, for example if the same graphic designer impresses you with their work, they can be sent monthly projects to complete, and act as an extension of your Marketing team. This works for them too, keeping the freedom to complete projects for other organizations, set their own rates, and work in a location of their choice.
Added bonus? While upskilling in-house can sometimes cause an echo chamber in terms of ideas and culture, bringing in fresh eyes and vision can help to boost creativity and innovation.
Looking to attract freelancers to reduce the skill gap? Keep these tips in mind.
- Set a budget for freelancers: Full-time salaries are more transparent than freelance rates. Make sure you’re clear on budget with each department. Then, ask for communication with contractors on pricing and scope of work to ensure you keep your finances in check.
- Remember, freelancers have unique goals: While employees will be offered competitive salaries and benefits, freelancers need a different approach. Good communication, constructive feedback and varied work projects will keep them interested and committed to your business.
- Smart processes are essential: You might have a system in place for hiring employees, but freelancers work differently. Think about how you’re going to find, hire, retain and pay your freelancers, especially if they are distributed globally.
A freelance management system will help you manage the budget in real time, find top freelance talents and keep track of all ongoing activities while reducing all of the admin and financial headaches that come with managing freelancers.