Companies worldwide are increasingly relying on contingent workers, freelancers, and independent contractors to fill skill gaps and provide flexibility in response to changing business needs. Switzerland alone saw a 19% increase in demand for temporary workers from 2020 to 2021, which can be attributed to various factors such as cost savings, flexibility, increased productivity, and reduced risk.
The popularity of temporary workers can be attributed to the following reasons:
- Cost savings: Temporary workers can be more cost-effective than full-time employees as they do not receive benefits like health insurance, retirement plans, or paid time off. Companies only pay for the work that needs to be done, making it easier to manage budgets and avoid overhead costs such as benefits and taxes. This helps businesses manage costs more effectively.
- Agility and adaptability: Temporary workers provide companies with the flexibility to scale their workforce up or down as needed, in response to changing business conditions or project demands. This allows organizations to remain agile and adapt more quickly to market changes. Temporary workers can be hired for a wide range of projects and tasks, allowing companies to bring in the right skills for the job, manage the workload, and ensure that the job will be completed in a timely manner.
- Access to specialized skills: Companies can tap into a vast pool of specialized talent on an as-needed basis, helping them access the expertise required for specific projects without having to commit to long-term contracts or invest in expensive training programs.
- Speed-to-market: By utilizing temporary workers, companies can quickly assemble teams with the right mix of skills and expertise, enabling them to bring products or services to market faster and stay ahead of the competition.
- Increased innovation and productivity: Bringing in external talent can inject fresh perspectives and ideas into an organization, fostering innovation and creative problem-solving.
- Mitigated risk: Engaging temporary workers, who are not classified as permanent employees, allows companies to avoid extended commitments and diminishes responsibility for their actions. This approach can contribute to minimizing potential legal complications and assist in maintaining compliance with relevant laws.
To address the increasing demand for temporary workers, companies are relying more on recruitment agencies. Recruitment companies play a critical role in connecting organizations with the workforce they need. There are various reasons why companies are increasingly relying on recruitment agencies, such as:
- Post-pandemic economic recovery: As economies recover from the effects of the COVID-19 pandemic, many businesses are looking to expand and grow, creating a surge in demand for talent. Hiring temporary workers allows companies to maintain flexibility in uncertain times and respond to changing demands more easily.
- Demographic shift due to an ageing population: As the workforce experiences an increase in retirements among skilled and experienced professionals, organizations may encounter a reduction in available expertise within specific industries or roles. To address these gaps, companies can leverage the gig economy, which enables them to engage experienced professionals on a project-by-project basis, ensuring that essential operations continue seamlessly.
- Addressing industry-specific skills shortages: The rapid pace of technological advancements and the evolving nature of work have led to skill gaps across various industries. Organizations often face challenges in securing full-time employees who possess the necessary skills and expertise to meet their dynamic needs. By employing gig workers, companies can efficiently access a diverse pool of specialized talent, thereby mitigating the impact of skill shortages and maintaining a competitive edge in the market.
- Digital transformation and skills gap: The rapid pace of digital transformation across industries has created a skills gap, with companies struggling to find talent with the required expertise in areas such as artificial intelligence
- Shift in talent acquisition strategies: Many organizations have recognized the need to adapt their talent acquisition strategies in response to changes in the workforce and the job market. This has led to increased reliance on the expertise and services of recruitment companies to find the best candidates for their needs.
In conclusion, the trend of hiring temporary workers is likely to continue in the coming years as companies seek to fill skill gaps and provide flexibility in response to changing business needs. At the same time, recruitment agencies, and outsourcing companies will become increasingly important in connecting businesses with the talent they need to thrive in a dynamic job market. It’s essential for companies to understand the benefits of this approach and to incorporate it into their personnel and business strategies to remain competitive and successful.
The numbers are based on a study conducted by Workday presented at the HR festival 2023 in Zürich