In today’s dynamic business landscape, acquiring talent is a significant challenge for companies. Over three-quarters (77%) of employers struggle to acquire the necessary competencies to drive their strategic initiatives.
Amidst the hurdles in securing high-quality talent, managers increasingly turn to contractors to bridge the gap. Research conducted in 2022 found that contractors contributed to about 30% of the work accomplished in nearly one-half of organizations. This figure climbs closer to 40% or even 50% in sectors like technology.
Innovative Approaches to Acquiring Talent
In response to this evolving talent market, on-demand platforms such as a.team, Toptal, Catalant, and Braintrust offer more sophisticated and specialized services. These platforms now provide access to contractors possessing highly sought-after skills, particularly in areas like data science and artificial intelligence.
Individuals with these in-demand skills increasingly opt for project-based work that aligns with their interests and career aspirations, steering away from traditional corporate roles. This shift towards a tech-driven, global talent marketplace grants these skilled professionals the freedom to pursue alternative career paths, which may not involve full-time employment with a single company.
Forward-thinking organizations are finding additional ways, beyond on-demand platforms, to tap into this pool of talent through innovative approaches. For instance, some companies have adopted an open talent model. They establish a pool of vetted contractors whom they can deploy as needed to expedite project execution. This flexibility not only allows for scalability in terms of headcount and skill sets but also enables swift adaptation to changing project requirements by reallocating talent where it’s most needed, enhancing both project speed and organizational agility.
Simultaneously, another emerging trend is internal talent mobility, empowering full-time employees to both seek new roles within their company and engage in projects aligned with their interests or skill development goals without leaving their current roles. Companies like Unilever and Tata Communications are taking this one step further and pioneering programs that enable employees to choose the number of hours they want to work and then dynamically assign them to projects based on their unique skills. This approach mirrors the flexibility of talent sourcing in the open market. These internal talent marketplaces have the potential to unlock organizational productivity, agility, employee engagement, retention, and career advancement opportunities.
A Skills-based Approach to Talent Acquisition
Organizations must fundamentally shift how they acquire talent to fully capitalize on the potential of digital talent platforms, open talent models, and internal talent marketplaces. This shift entails integrating all external and internal talent into a cohesive vision that drives how they acquire the skills they need.
A skills-based model is the linchpin of this new approach to talent acquisition. In this emerging approach, jobs are broken into projects, and projects are broken down into tasks, with managers identifying the requisite skill sets needed for each task and then acquiring talent accordingly. Traditional job descriptions take a back seat to skill requirements, as managers prioritize acquiring the necessary skills regardless of candidates’ formal education or past job titles.
Furthermore, adopting a skills-first approach broadens access to talent from traditionally marginalized communities. Not everyone can pursue a college degree, yet emerging fields like AI and data analytics offer opportunities for individuals to acquire skills through boot camps or certification programs, bypassing the traditional educational trajectory. Companies like IBM and Walmart are leading the charge by valuing alternative credentials and accepting them instead of a 4-year college degree, thereby diversifying their talent pool.
In essence, a comprehensive approach to talent acquisition, underpinned by a skills-based mindset, enables companies to navigate talent shortages and execute projects efficiently and serves as a catalyst for employee empowerment and organizational growth.
Basics of a Comprehensive Approach to Talent Acquisition
How can companies take a strategic approach to acquiring scarce but essential talent? First, companies are advised to know what they already have in terms of skills. Second, they need to understand both the demand and the supply of talent. And third, they should facilitate conversations with managers about their options for sourcing the capabilities they need to execute their projects.
- Know what you have both in-house and externally.
Effective talent acquisition hinges on comprehensive skills data encompassing both internal and external talent pools. Acquiring the right talent becomes challenging and inflexible without a clear understanding of available resources. HR managers need a clear line of sight to all of the skills they have available and those they will need in the future. This allows companies to identify internal skill gaps and those who have adjacent skills that can be upskilled easily versus those who need to hire externally. Leveraging technology to understand your internal skills and where you can find skills externally (e.g., competitors, talent platforms, boot camps) enables a company to understand its entire spectrum of skills and where those skills are most likely to be found.
- Understand the supply and demand for talent.
In many cases, HR manages internal talent, talent acquisition oversees hiring new employees, and procurement or individual team leaders manage contract external resources. Sometimes, managers even evade their company’s established HR system to hire contractors surreptitiously. While this improvised approach to talent management and acquisition may sometimes be necessary, it often proves inefficient.
Ideally, talent acquisition must possess insight into the full spectrum of individual skills within their workforce — encompassing current job-related and potentially relevant skills. Moreover, they must stay attuned to emerging skills, both the internal supply of skills and the growing demand for them, which may outstrip supply. This enables talent acquisition to become adept at sourcing talent strategically. When they identify new skills emerging in the organization, they can research how to acquire those critical skills. Might some employees have these skills, but they are not used in their internal roles? Are employees with these skills opting to work freelance, thus making it difficult to hire them full-time? Which companies or talent platforms are the best sources for this type of talent?
3. Facilitate conversations with managers about their options for sourcing skills and capabilities needed to execute their work.
Companies need to use all of their avenues to grow the skills they need. But first, managers need to know what they’re looking for. Talent acquisition must ensure that functional managers, team leaders, and others who are closer to project work ask the questions that enable strategic talent acquisition.
- Is there a new and growing need for a skill set within the organization?
- Is this skill needed on an ongoing basis?
- What is the life cycle and frequency of use of this skill (you might need a certain skill set now, but you might also need it long term)?
- Does it make sense to leverage internal skills for quick execution or to wait and hire someone new?
Whether leveraging internal talent, drawing from a vetted pool of known contractors, or going to Toptal to find on-demand talent, managers looking for specific skills must fully understand the options and the trade-offs. Their talent acquisition partners must help line managers approach talent acquisition with strategic intent.
A strategic approach to talent acquisition begins with knowing what you have, understanding the supply and demand for talent, and ensuring that talent acquisition asks the right questions of managers about their talent needs. Winning in today’s and tomorrow’s marketplace will depend on this comprehensive approach.