Mavenlink has published a report based on a survey from more than 1000 respondents carried out by Atomik Research. The conclusion, there is a surge in demand for a liquid workforce across Industries in the US at least. The report entitled ‘li’ highlights a shift towards a gig economy. The report, authored by Atomik research
Ray Grainger, CEO, Mavenlink, commented, “People-powered organizations have historically struggled to find and manage a distributed workforce, using point solutions or antiquated technology that was built for a different era. Now, as the use of contractors is increasing, and on-demand workers have become even more critical to lean operations, it is imperative for organizations to adapt their processes and technologies accordingly.”
The report identifies that organisations face several challenges as the demand for contract workers has increased 57% since COVID-19. Mavenlink highlights three:
- Significant barriers to leveraging contractors exist in organizations
- Demand among specific industries is increasing for project work and specialized skills
- Organizations must rethink how they engage with and manage their on-demand workforce
The report delves into the survey findings for each of these, provides an analyse and leave the reader with six questions to consider for their organisation. If the reader can answer the questions, the insight will often lead to an action that Mavenlink PSA could support. Overall this is a well-written report with some takeouts that professional services leaders would find useful. It does not mean that the only answer lies in deploying Mavenlink software, as there are several solutions in the market. All of these have their strengths and weaknesses.
Is this cyclical?
It is not just the overall demand that has increased. 29% expect the use of contractors to increase further. Has the challenge of finding a good contractor increased, though? It stands at 31% according to the survey. Enterprise Times asked Mavenlink whether this is an increase compared to previous years. Mavenlink responded: “In 2017 in a similar study, The White-Collar Gig Economy, 32% of respondents said finding good contractors was a challenge while 33% were confident that they would deliver.
“In our 2018 State of the Services Economy Report, 30% of survey respondents said they had difficulty finding freelancers, contractors and subcontractors. The current data is consistent with 31% saying that finding a good contractor is a challenge.”
Firms seem to be turning to contractors as they are unwilling to invest in full-time employees. They see contractors providing a rapid increase in efficiency. Efficiency is the key driver across several industries, including the finserv sector (71%), the technology sector (66%) and marketing agencies (50%) for hiring contractors.
Is this going to be cyclic? Will firms slowly build up permanent hires as contractors want more stability and firms find it harder to ring-fence their chosen contractors? Mavenlink replied:
“The future of services will be much more networked and enabled by technology. By participating in real-time market networks firms reduce the uncertainty around supply and demand, and therefore can make talent choices based on higher quality information, whether that be hiring or contracting. And contractors have better demand signals of where they can apply their talents.”
Mavenlink now provides a unique feature that may signal a change as it is adopted. Its new Private Networks functionality enables organisations to share resources, giving a catchment pool far wider than ever before. There is no need to have a long bench. Instead, organisations can use contractors from within other firms to fill the resource shortfall.
The skills gap
One challenge that the survey indicates is the skills gap. 91% of respondents indicated they anticipate an increase in the need for special skills over the next 12 months. Both finserv (44%) and marketing (24%) seek contractors with more than five years of experience. It is probably not just the experience the firms will seek but new skills as well.
How will organisations help ensure that contractors spend time training for the next generation of software whilst also delivering on projects? Whose onus is this? The contractors or contracting firms? Mavenlink replied:
“Contractors adapt their offerings based on the demand they see in the marketplace. Meaning that if you are sharing demand with your marketplace partners they are going to align their offerings and skills with that demand. And the sharing of information results in taking the whipsaw out of the supply chain. When businesses and their suppliers share more information about supply and demand, both parties can adjust their offerings, headcount and skills in a more agile, responsive way. Both parties are equal participants in these marketplace dynamics.“
Therefore, the onus appears to settle on contractors to acquire the training, but the hiring firms must provide the information about the skills they seek. It feels like there is a gap that may cause an issue.
Is your technology ready
84% believe there is a technology gap in managing contractor resources. Many (70%) use spreadsheets still, and while 62% use professional services automation, it appears as though for many firms, this is not enough.
How does Mavenlink PSA assist with one aspect of managing contractors – onboarding? “Mavenlink sells principally to firms, both large and small. Firms from 30 people up to many thousands. These firms are often already trading partners at any given time, primes or subs for one another, and are already using Mavenlink to manage their business which streamlines the onboarding of contractors. Mavenlink’s strategy is to partner with aggregators of freelance specialists to participate in our market network.”
Grainger concluded: “The increased reliance on a dynamic workforce, compounded by 94% of respondents indicating that managing a contractor is different than managing an employee, is driving demand for purpose-built tools for professional services. The ability to support a liquid workforce is critical in today’s networked economy.”
Enterprise Times: What does it mean
There is still a huge shortcoming in most professional services organisations around the technology to support the business. Spreadsheets still dominate. Most PSA vendors that Enterprise Times talk to say they replace Excel more frequently than other PSA vendors combined. The survey bears this out. The findings in this report are a stark reminder of that, though not unexpected.
As the world shifts slowly towards a gig economy, there is a chance that this could accelerate with solutions such as Mavenlink providing the functionality to support the shift. There are still gaps though, ongoing training potentially is one.
As forms start to leverage the groundbreaking Mavenlink business networking technology, either the market will ignore I or cement a change leaving other vendors playing catchup. Other technology is now emerging to support freelancers. Lance Bank recently launched, primarily targeted at freelancers it provides the support that individuals need that may slow down a return to the traditional workplace.