Many experts believe that there is a major shift taking place in the way that companies hire and utilize talent. Many organizations, particularly larger Fortune 500-type companies are finding benefits in using independent contractors, especially for specific projects or challenges.
Gene Zaino, President and CEO of MBO Partners, explains: "It's clear when you hear a lot of the pundits and experts claiming that the number of contingent workers will expand at a rate that's three times faster than traditional employees, you wonder, why are they saying that? Why are business leaders ranking the shortage of highly skilled people as their number one challenge? This happened for the first time at the Fortune 500 summit that happened just a few months ago."
"For the first time, the shortage of highly skilled people became the number one challenge, outranking the rising cost of healthcare, which has been the number one issue for CEOs for many years."
"Why are these things happening? There's obviously some kind of dynamic going on in the workforce, certainly in the United States."
THE WORKFORCE IS TRANSFORMING
There are several indications that the workforce is, indeed, transforming. For example, many experts agree that the contingent workforce will likely grow three times as fast as total employment over the next decade. Additionally, talent trends are shifting from a traditional employer-centric career model to a skillscentric resume model; in other words, away from the traditional use of full-time employees and towards the use of independent contractors and consultants. Finally, the instance of transient, talented independent workers is also on the rise.
Zaino explains that this talent shift is likely caused by several decades of change. The 1960s and 1970s were years of "social transformation" in which society challenged government and big business. During the 1980s and 1990s, a technology revolution took place: "PCs and the Internet laid the groundwork for a lot of new businesses and disrupted traditional business models. These two movements set the stage or foundation for changing long-time employee-employer relationship." Zaino says, "In our culture and our society, employers have had a traditional responsibility for certain social elements of their employees - a responsibility for their healthcare, for providing vacation time, for providing retirement and so forth." He adds, "It's interesting to look at the hard, empirical data from the Bureau of Labor Statistics that was published last year." This data, illustrated in Figure 1 on the following page, indicates a breakdown in employers' social contract.
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