#Futureofwork – why the financial services sector has caught the freelance bug
Gone are the days when working in the white-collar corporate world meant committing to a 9-5 desk job and waiting for retirement. Retention and engagement used to be the holy grail in corporate HR, as firms sought to keep hold of their best people for as long as possible. But now, that’s all changed, and corporates – particularly in financial services – are catching on to what SMEs have known for a while; that working with flexible freelancers and contractors makes good business sense. As such, in a recent PwC survey, 41% of corporate CEOs said they had increased their use of freelancers and contractors in the last 12 months.
It isn’t just in developed nations that corporates are catching the freelance bug either; those in growing economies are starting to see the benefits too. According to a report by global freelancing platform Upwork, India is the second-largest freelance economy behind the US, boasting over 15 million independent workers with skills ranging from finance to IT. The African continent has also witnessed rapid growth in this way of working, now home to 10.1% of the world’s freelancers.
So, what’s driving this sudden popularity of flexible talent amongst corporates around the world?
A recent report found that global skills shortages could grow to 85.2m unfilled vacancies by 2030, costing nearly $8.5 trillion in unrealised revenue. And while we hear a lot about the skills deficit in the tech sector, it’s actually in financial and business services that shortages are most severe, with a potential shortfall of 10.7m workers globally by 2030.
We might not be there just yet, but fierce competition for the best talent, particularly on the permanent side, has already driven firms to look for alternatives. Using freelance talent may have started as a temporary solution to plug skills gaps; however, it’s now becoming the new normal, with businesses realising these individuals can do the job as well, if not better than permanent resources.
With growing competition from innovative fintech and insurtech start-ups, established businesses are under tremendous pressure to deliver their own digital services, and move quickly to get these off the ground. To do this, they need to recruit not just highly specialist tech skills, such as machine learning or data analytics, but also individuals that have some understanding and experience of the financial services environment they operate in. Tapping into the freelance talent pool enables corporates to find these highly specialised skills, quickly, and for as much or as little time as they need them.
More choice and higher quality freelancers
Freelancers and contractors may once have had a reputation for being lower quality or less reliable than permanent staff. When freelancing was less commonplace, there was perhaps a tendency to wonder why an individual would choose a less secure career, if they had the option of taking a high-status, permanent role. However, times and attitudes have changed dramatically, and freelancing has entered the mainstream. Furthermore, as talented individuals are turning to freelancing in their droves, driven by greater flexibility and autonomy, companies are benefitting from the greater choice and therefore higher quality on offer.
Ease of access
Both freelancers and employers have also been aided hugely by the power of technology, which enables them to connect with each other, both quickly and cost-effectively. Some large companies have chosen to build their own freelance platforms. However, there are also a plethora of independent platforms out there, ranging from generalist giants, like Upwork, to specialist players, like strategy specialists TopTal and Talmix, and our partner Outsized with its emerging markets focus. This technology also makes it easy for recruitment to be delegated out to managers and teams on a case-by-case basis, reducing the management time for HR and recruitment at the same time.
Value for money
Finally, cost-consciousness has undeniably become an essential factor for firms, with flexible talent enabling them to minimise the fixed costs involved in hiring, training, employee benefits, and providing infrastructure. When working with freelancers, organisations only pay for the skills they need, when they need them, which has the added benefit of ensuring you have highly focused individuals, keen to prove themselves. Large organisations also frequently value the external perspective that freelancers and contractors bring, as well as the best practices and insights they bring from their work elsewhere.
The extent to which financial services organisations now rely on flexible, on-demand support, would have been unthinkable 30, 20, or even ten years ago when the ‘job for life’ was the norm. However, taking a more open-minded approach to talent management is bringing undeniable benefits for both employers and professionals, enabling companies to respond more quickly to the challenges and opportunities ahead of them, while giving individuals the freedom and autonomy they crave. Welcome to the #futureofwork.