The pandemic, global megatrends and rapid digitization have ushered in a plethora of new working models and approaches. This includes millions of people around the world having transitioned during lockdowns into remote work, hybrid work, working from home, and the rise of digital nomadism.
Employment models and people’s approaches to work have also been changing. This is evidenced by the rapid rise in freelance, contract, and micro jobbing platforms as well as global recognition of the need for job satisfaction given the ‘great resignation’. Companies are increasingly able to hire talent from a broader pool of applicants thanks to remote work opening up jobs to people from around the world – but there is also increasing pressure on those companies to retain talent.
A new business model for hiring is open talent, or flexible positions where people are hired temporarily on a short-term, project basis. This on-demand talent has many benefits for companies including being agile enough to scale their workforces as and when needed, and it can help to reduce overall HR costs. This model also aligns with many employee preferences for increased flexibility, independent work, work-life balance and more purposeful and rewarding work.
Companies of the future are looking towards innovative business models to help them remain competitive and take advantage of new markets and ways to reduce costs. The Open Talent model is an option that many companies will need to consider and assess whether it strategically benefits them over the short and long term.
Having a talent strategy that takes account of recent trends in employment, industry trends, regional trends, as well as global megatrends and looks at the overall talent vision for the company, will be better placed to adapt to the future of work.
Below we look at the pros and cons of the open talent business model and when it makes sense to use it.
Reasons why companies are using open talent as a new business model
1. Makes it easier to scale a company’s workforce
Using open talent solutions, companies can scale their workforces to suit changing demands for human capital.
This helps companies to remain agile and flexible to changing circumstances and more easily able to adapt to increases or decreases in work demands. That in turn can also help ensure that overhead costs are kept low.
2. Fill skills gaps not covered by permanent teams
Hiring open talent such as freelancers or independent workers can help to fill critical skills gaps that may not be present in the existing company. It can also help to boost HR capacity as and when needed.
3. Save costs
Particularly when open talent-hiring is remote, there is the ability to save on costs associated with overheads of running a physical office like deskspace.
Many HR costs can also be externalized if employees are outsourced, including holiday pay, sick leave, insurance and pension contributions. This can result in cost savings for companies, which can be significant if they rely on a large number of open talent providers.
And compared with having to hire a full-time employee to boost staff capacity for a particular project, by being able to access open talent, companies can often save large amounts of money on salaries, which may have made the project cost-prohibitive.
4. Increase productivity
When people are hired on a project basis, productivity often increases. This can result in faster and more efficient results and less time wastage.
5. Access to larger talent pool
By hiring open talent, companies can have access to a wide range of talent providers from around the world, often with unique and diverse backgrounds which can also boost team diversity and help cultivate new ideas.
By having access to a larger talent pool, companies can also more easily hire for the skills that they need.
6. Access innovative and diverse skill sets
Through hiring open talent from around the world, with people from diverse educational and experiential backgrounds, companies can leverage innovative ideas, ways of thinking and insights that can also help in developing innovative new products, services or approaches to work.
What types of jobs can most easily be performed by freelancers and open talent?
The types of jobs that are best suited to open talent and freelance talent will vary between companies and industries. In general, the types of work where companies will look to hire open talent is where they either don’t have the skills or capacity to fill the role internally, where it’s more cost-efficient to hire on a short-term basis, or where they need specialized skills that will yield high returns.
Many companies are already reliant on open talent for a broad range of jobs – such as administrative tasks, software development, customer service, engineering, accounting, design, copywriting and HR support.
And while there may be many challenges and barriers for companies in hiring and trusting external staff, there are also many new tools and technologies being developed and used which are making it easier. For example, platforms like Slack make it easier to share information between teams and communicate effectively.
Virtual communication tools like Zoom are making it easier to have regular check-ins with remote staff. And companies that hire remote and open talent are establishing structured systems to make acquisition, onboarding and retention of staff more effective, efficient and streamlined.
How can managers prepare for the future of HR?
1. Create a talent management strategy
Most companies, especially if they are large, will have detailed talent management strategies. But they may need updating to include details about hiring open or flexible talent, as this is generally a new uncharted trend.
The talent management strategy should also address how to manage remote teams effectively, which platforms and strategies to use to acquire new talent and how to most cost-effectively and efficiently onboard new talent.
To be prepared for the future of work, having strategies in place that helps companies to access and retain talent will be critical success factors for productivity and business growth.
2. Establish fair budgets for hiring open talent
While some of the benefits of hiring open talent may be that companies can save costs, they should also be mindful of paying fair and living wages. Companies will need to decide on their policy regarding whether to pay employees differently depending on where they live and their relative living costs – or if everyone will be paid at the same rate for the same role. Part of the consideration should be to attract and retain great talent – even if retention is related to recurring freelance or contract work from a pool of open talent.
And just because your open talent is flexible, remote and not full-time employed by your company, doesn’t mean you can’t offer attractive benefits to help recruit and retain great talent. That could include things like parental leave, flexible working hours, access to wellness programs etc. And there are even insurance providers like SafetyWing that allow you to easily add freelance staff on your corporate insurance account – with access almost anywhere in the world.
3. Join open talent platforms to source talent
There are a burgeoning number of freelance work platforms, some of which are very niche and others which offer talent in almost any industry. These talent platforms typically provide legal and financial protection for both the talent and the company hiring them and can be a convenient way of having access to a large number of potential candidates.
Many of these platforms such as UpWork, also include a public talent rating so you can see the type of feedback people have received from previous jobs and whether they are “top rated” by the platform. This can be a good way to check the performance and on-the-job credentials of anyone you’re hiring.
4. Decide which types of jobs need outsourcing
By strategically assessing the benefits and drawbacks of hiring open talent for specific tasks or projects, companies can get insightful data about business opportunities in transitioning their workforce to more flexible HR models.
Each company will need to decide which types of jobs could easily be outsourced and on a strategy for acquiring, onboarding and potentially retaining that talent on a needs-basis for future jobs.
Final thoughts on the future of work and transitioning to flexible hiring models
Harnessing the potential of the open talent economy gives companies the ability to be agile and flexible while they grow and adapt to emerging megatrends, socio-political, regional and global disruptions and unprecedented transitions as has been seen in the pandemic era.
But to be able to take full advantage of this new business model and approach to talent management, companies will need to pivot from their traditional ways of dealing with HR. Companies will also need to be ready to adapt to emerging technologies that enable the effective management of open talent and find better ways to both access and retain great talent.
