The Rise of the Contingent Workforce

Adam Elliott-Smith

In an age of Digital Transformation, companies desperately need access to skilled professionals who can help them complete this journey.

Access to this talent is a vital part of surviving and growing through this transition: businesses need people who intuitively understand next generation digital technologies, know how to stimulate innovation, and are in possession of an entrepreneurial mindset.

That’s why next generation technology skills have never been more important to businesses: To succeed and grow in the digital age, access to this talent is critical but it is becoming increasingly difficult to find. In fact, according to PwC 73% of CEOs consider a lack of talent to be a major barrier to growth.

To gain access to this new generation of talent, businesses have to redefine their staff augmentation and talent acquisition strategies, open their minds, and leverage the talent they need – wherever it might come from.

The death of 9-5

One of the main reasons it is getting so hard to access this talent is because we are seeing a major structural shift away from traditional models of employment: the “employed” 9-5 schedule has served employers well for many years, but it’s now rapidly in decline.

Whether you call it the gig economy, the freelance economy, or something else entirely, the talent pool for highly skilled STEM professionals, especially those specialising in next generation digital technologies such as best of breed Cloud Applications & Cloud Platforms, is undergoing a radical shift in the way it wants to operate.

Freelance and contracting is far from new in the technology world, but it has never been adopted to this extent or on this scale: there has been a massive acceleration in the number of highly skilled technology professionals transitioning to freelance over the last few years, and this speed of transition is set to further increase over time.

In fact, PwC estimates that about a third of all workers in the US are now freelancers and that by 2020 as many as 50% of the total workforce will be working for themselves. According to the Office for National Statistics (ONS) in the UK, the number of professional freelance consultants increased by 25% alone between 2011 and 2015.  In sectors such as Technology, the ONS reports a 75% growth in the number of freelance consultants as a percentage of the total IT workforce which is unprecedented.

This rapidly accelerating paradigm shift is something every business needs to be aware of if they want to bring the top rated technology professionals into their organisations, especially those highly skilled in next generation digital technologies.

There are 3 main forces at work driving the flow of talent to the freelance market:

1. The exploding skills gap

The IT skills shortage has plagued the UK for years, and is becoming dramatically worse as every company embarks on their Digital Transformation journey.

Skills gaps have always increased the transition of skilled professionals to the freelance market place.  However, demand for technology skills, especially digital technology skills, has never been so high with the IT skills gap set to widen even further over the coming years.  This unprecedented, long-term demand is acting as a catalyst for the acceleration of people moving from full-time employment to freelancing, where the opportunity to improve earnings and job satisfaction is widespread.

This is the same for mature markets and newer freelance markets alike, although the rate of acceleration is going through the roof for Experts skilled in digital technologies such as Salesforce, Google, AWS and other cloud platforms and applications.

The exploding skills gaps are changing the market for highly skilled talent in a way that hasn’t been seen before.  And expect this acceleration to ramp up even further in the very near future. A report by Experis found that 24% of the current IT workforce are contractors, and that this figure is set to explode by 2020, especially for niche sectors such as Cloud Computing and Data Science.  Furthermore, some 69% of business managers indicated that they expect to engage more with these professionals in the near future.

2. The societal shift

Skills gaps driving talent to freelance are not new. What’s really interesting is the fundamental structural change to the workforce – one driven by changes in societal norms as professionals adjust their values towards long-term employment in favor of shorter term engagements and self-employment.

This mindset is especially prevalent in Generation Y. Since 2008, we’ve seen a 51% rise in the number of millennials undertaking contract work in the UK, and according to Upwork, 87% of graduates see freelancing as a highly attractive career option with 69% saying independent work offers them a better work-life balance.  It’s a natural transition for what some call ‘the job-hopping generation’: what many have misinterpreted as disloyalty is actually a wider rejection of full-time work as a concept.

Why? The key millennial value is a sense of purpose, and they don’t necessarily see work as theirs. If they do, they want to do work that means something – and not necessarily for the long-term. Conditions encourage flexibility and empower them to hop jobs, and make their business relationships fleeting.

Their attitude has fundamentally changed because society has fundamentally changed. They can get a mortgage and credit with regular contract work just as easily as if they had a full-time job – and they can pay it off. So, why do anything else?

As more and more of these skilled, specialist experts enter the workforce, more and more will choose to freelance.

3. The rise of digital marketplaces

The digitization of freelance marketplaces is revolutionizing the market. They are improving visibility, they are increasing stability, and they are removing one of the biggest barriers to freelancing: the insecurity over finding work.

New digital platforms are now making it extremely easy to find freelance work: it’s often possible to create an account and complete a profile in under an hour. From there, it’s a matter of searching for viable projects and sifting through project offers; if they feel like taking something on, they can; if they don’t, they’re under no obligation.  Online market places are only just beginning to take shape but will without question continue to evolve and develop meaningful propositions over the years that employers will be able to leverage in order to access top rated skills.

By connecting freelance professionals with employers, companies like Fiverr and Upwork are disrupting traditional buying processes – in the same way that Uber has transformed how we get around town. Expensive and ineffective delivery models favoured by Consultancies and traditional recruiters may become extinct if they do not adapt and improve their propositions.

Adapt or die: the present and the future of work

The contingent workforce has traditionally been a secondary model of employment.  Not anymore. The rise of digital marketplaces, the societal change towards shorter jobs and self-employment combined with exploding skills gaps are coming together like a perfect storm to create an incredibly highly skilled contingent workforce of the future.

At a time when access to technology skills is more important than ever, it’s those businesses that create robust internal processes and adapt their staff augmentation and employment models to accommodate this shift in the market for talent that will win out in the end.

They’re the ones that will change their mindsets and working cultures in order to tap into this incredible pool of talent. You only have to look as far as PwC to see this in action – it has launched its own talent marketplace aimed at professional freelancers. To complement hiring employees, the platform targets the freelance talent pool in order to augment their internal resources to deliver projects more effectively.

So the challenge to business leaders is simple: in the face of so much change, how do you leverage the high quality talent and specialist skills that your business needs in order to thrive in the digital age? The choice for employers is simple: adapt or get left behind.


To find out how to leverage the power of a contingent workforce, simply get in touch with one of our specialist consultants today.