Is a talent shortage driving the contractor workforce?

A recent Michael Page global study of the contingent workforce found that a high proportion of managers were searching for specialist contractors, with four out of five managers across IT, sales, engineering and manufacturing worldwide reporting that they looked for specialist profiles for contractors.

Why are so many companies taking on contract workers, and what are the implications of this trend?

The talent shortage

The same study found that, globally, hiring managers are finding it difficult to source skilled workers in highly specialised activities. Fast-developing sectors such as communications, HR and legal services urgently need workers with advanced and specialised skills and qualifications.

To bridge this skills gap, organisations are increasingly turning to specialist contractors with niche expertise and a broad perspective. Thus, highly skilled professionals are finding that they have the ability to leverage their skills for higher pay and greater variety than in the permanent employment market. In the ‘gig economy’, specialist contractors are able to position themselves at the top of the heap while enjoying a flexible, autonomous and interesting career.

Qualified contractors are an ideal solution to rapid growth phases, as they frequently come with technical experience and skills and an agility that the permanent workforce may lack, since there is often less urgency to evolve in a permanent role than when moving quickly from one project to another.

Considering short-term requirements

Contract work allows companies to hire highly skilled professionals who can hit the ground running - with a smaller impact on budget. Using contractors also reduces the costs involved in recruitment and training a permanent member of staff.

This is a highly effective means of filling gaps in the short-term, for growth periods, to execute specific projects or to cover the gap left when a permanent staff member leaves.

Looking to the future

The current skills shortage means that it’s a candidate’s market. Experienced contractors with sought-after skills are able to command a high rate and pick and choose their contracts. This means that employers will have to compete with strong packages—both with attractive rates and employer value propositions.

There is also the ongoing issue of sourcing, planning for future needs and building permanent relationships in anticipation of future requirements. There may also be the opportunity to retain top contractors, either on a seasonal basis or moving into a permanent role, should that be required.

Most predictions suggest that an increasing proportion of the workforce will be contingent, so it’s likely that many businesses will trend towards relying more on interim hires on a per-project basis.

So, whether the war for contract talent will cease in the near future is uncertain, but the need for a flexible and agile contractor workforce isn’t likely to go away any time soon. Forward thinking employers should consider contractors as a long-term part of their strategy - not a stop gap.

Ready to start hiring contractors for your business? Get in touch with your local Michael Page office today.