The Gig Effect? Companies Hiring More White Collar Contractors Instead of FTEs
By Isaac M. O’Bannon, Managing Editor
A new study shows significant trends in enterprise use of external contractors; growing enterprise demand for on-demand support, influx of highly skilled contractors into the workforce, business challenges, and increased individual interest in flexible work structures. Together, the findings point to a universal movement toward an on-demand white collar workforce.
The research study, “On the Verge of a White Collar Gig Economy: On-Demand Workforce Trends According to Today’s Business Leaders,” was commissioned by Mavenlink, a provider of cloud-based software for the modern services organization and a Gartner Cool Vendor.
Top findings include:
- 94% of business leaders plan to continue using or expand their use of skilled contractors for specialized roles in the next year.
- 79% of executives state leveraging contractors is a competitive advantage, citing an increase in agility as the primary benefit.
- 47% state they are looking to hire contractors to fill management and senior executive roles, including c-suite contractors.
- 69% of organizations have inadequate support structures and policies for managing on-demand talent, and 77% state they do not understand what changes are required to better manage contractors.
- 63% of executives would switch to a contract model, given the opportunity.
- Job security–not benefits–is the number one reason full time employees remain in their role. 62% of white collar workers prioritize security, while only 23% rate benefits as the most important.
Trend One: On-Demand Workers: A Competitive Advantage
Business landscapes are changing at an unprecedented rate, and the accelerated pace of work has made rapid adaptability crucial for success. Traditionally, enterprises have heavily valued in-house resources, but those structures no longer function as effectively. Companies need to evolve, expand, and change direction faster than they can hire and train, or implement new processes. As a result, they’ve turned to third-party contractors for on-demand support.
According to the research found in “On the Verge of a White Collar Gig Economy”, 61% of business leaders consider agility critical to success, and 79% consider the use of contractors to be a competitive advantage. All of these also intend to increase their utilization of contractors over the next year. This will allow them to scale at will, accessing a broader pool of talent and workers with more specialized skills, without heavy financial or time investments.
Trend Two: Expert-Level Workers in Demand
Demand for contractors is not limited to low-level positions. 47% of executives are seeking temporary hires for management, senior executive, and even c-suite roles. The two qualities leaders value most in potential candidates are specialized degrees (35%) and a decade or more of experience (29%). These highly skilled upper-level workers add immediate value in strategic areas, without requiring lengthy onboarding. The most heavily demanded specialty is IT expertise.
Trend Three: Employers Grappling with a Changing Workforce
Business strategy has outpaced business structure, and companies frequently engage contractors without a clear system for managing them. Business leaders are tasked with overseeing a disparate and rapidly changing workforce, coordinating strategy and ensuring consistent performance. This requires insight and control, and articulated policies to stabilize work. However, 69% of participants in the study considered their current processes for managing contractors inadequate, and 34% had no relevant policies at all.
Trend Four: Executives Want In
Employees also stand to benefit from a contract structure, gaining both lifestyle benefits such as schedule flexibility and professional benefits like exposure to a wide array of job experiences. These advantages have prompted high interest in temporary roles: 63% of study participants stated that they would leave their current full time position for consistent contract work.
The primary motivation that business leaders listed for maintaining a full-time job was a sense of security (62%), while only 23% cited benefits and only 10% said salary. 56% of executives had already contracted in the past–a number that is likely to increase in the coming years.
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