The Rise of the Gig Economy and Sourcing Vital Technology Talent
The way talent is hired is always changing, and now the talent is using the gig economy and its dynamic functionality to negotiate the way they work and who hires them. Geoff Smith, Managing Director of Experis UK & Ireland, explains to Lawyer Monthly what financial services organisations can do to solve their IT skills gaps.
Financial services organisations are experiencing a wave of disruption unlike any other in their history. Whether it be the insatiable consumer drive for the adoption of digital services, like mobile banking and biometric security, the emergence of smaller niche fintech players like Monzo and Atom Bank, who are quicker to adapt to new demands, or the ever-present threat of cyber-attacks that dominate international headlines; financial services organisations need to ensure they can attract and retain the best IT talent in order to respond to these changing market conditions.
But much of this talent is operating in a new way, keen to adopt more flexible working practices. The finite pool of talent has realised that they can capitalise on the supply/demand imbalance and as a result, some have started to favour more lucrative contractor roles over permanent positions. So, what are these new flexible working practices? Are they here to stay, and how can financial services businesses respond to ensure that they can secure the vital technology talent when they need to?
The rise of the gig economy
The gig economy – a growing market of short-term contractors and freelancers – has enabled technology professionals to operate on a flexible basis, rather than committing to conventional long term contracts. Even permanent employees are changing in their approach to tenure – it’s now not at all unusual for a young professional to change employer every couple of years. Recent research from ManpowerGroup revealed that two-thirds of millennials believe the “right” amount of time to stay in a single role before being promoted or moving to another is less than two years, with a quarter saying it is less than 12 months – confirming their appetite for new challenges and portfolio-style jobs.
While previous generations may have had a career for life and received a generous retirement package at the end of their tenure, the technology talent of today will likely be employed by several firms over the course of their working life (not least as the age of retirement continues to rise). As this new dynamic is becoming more prevalent, financial services organisations are turning to contractors to solve their growing technology needs and plug the skills gap.
Contractor numbers set to decrease?
This being said, upcoming changes in legislation could have an impact on the number of individuals in contractor positions. IR35 – set to be amended from this April – is a tax legislation that has been tightened up by the HMRC in a bid to crack down on tax avoidance. The legislation specifically targets those in the contractor market, and as a result, could mean businesses have access to a shrinking pool of temporary talent. On top of this, former contractors looking for permanent positions are likely to want to retain much of the flexibility they enjoyed when working in the gig economy, and organisations will have to respond to this if they are to attract and retain top resource
The future workforce landscape is difficult to predict, but what is for sure, is that it has shifted significantly in recent years and is set to continue to evolve. Businesses must ensure that they are able to adapt to this, if they are going to secure the technology resources they need now and in the future. There are huge benefits to both permanent and contractor IT talent: the former can develop highly specialised expertise in areas that are critical to specific business requirements, while the latter will often bring fresh ideas to the table and a broader knowledge base. Businesses will need to ensure that they have a balanced IT workforce that draws on both strands to succeed in this volatile landscape.
What companies need to do
In the battle to attract in-demand top technology talent through their doors, financial services companies need to ensure that they can adapt to the shifting workforce market and the rise of the gig economy. Part of this requires knowledge of what contractors and permanent workers are looking for, but it also comes down to planning ahead.
In this era of disruption, freelance support and specialist skills can often help financial services organisations deliver successful projects to meet changing consumer demands at very short notice. But, it is important not to neglect the permanent bed rock of your team as well. By partnering with a workforce provider, financial service organisations can navigate and plan for the resource they will need; in the immediate- medium- and long-term.