There's a shortage of IT specialists in the UK. In 2017, 65 percent of IT leaders worldwide reported a skills shortage holding back their business strategies, according to a report by Harvey Nash and KPMG’s report. This is an upward trend that has been evident since 2011.
But it's part of a much bigger issue...
Most companies severely struggle to find the competencies they need to keep their businesses running. In the UK, large companies with 250+ employees have the most difficulty finding the competencies they need - with 50% of employers experience a general skills shortages, according to the 2018 Talent Shortage Survey.
Large companies in the UK only account for 0.1% of businesses, yet they employ 40% of the total workforce. This only demonstrates the significant impact this talent shortage has on the labour market. Mid-sized organisations (with 50-249 employees) are affected too. 45% are struggling to attract the skills they need, according to the 2018 Talent Shortage Survey.
However, the skills shortage is most severe within IT. The UK lacks about 40.000 IT specialists, according to Digital Skills for the UK Economy. This harms not only the companies’ competitive health, productivity and revenue, but also costs the UK economy 60 billion pounds every year, according to the report.
Long-term solutions are great, but won't fix companies' problems right now
A mix of different solutions need to be combined to efficiently solve this problem, such as focusing on educating more young people in IT, attracting more women to IT roles, and focusing on re-skilling existing employees. This is the most widely discussed long-run solution among politicians.
The problem with these solutions is that they take time. Time that most companies don’t have, if they want to stay competitive. Thus, these long-run solutions have to be complemented with short-run initiatives.
Some companies have already found sustainable solutions to this problem.
The solution - Hire freelance IT specialists
There's loads of benefits to hiring freelance IT specialists. They provide companies with access to new competencies, optimized cost structures, improved work quality, and accelerated go-to-market capabilities, according to a recent Accenture study.
As a consequence, 51 percent of IT leaders have now turned to employing freelance IT specialists to fill the skills gap, according to the report by Harvey Nash and KPMG. This makes freelance IT specialists the most popular solution to the skills shortage problem.
These freelance IT specialists are seen as skills enhancers rather than cost savers, according the report. It makes perfect sense for companies to employ freelancers, as they make up a growing proportion of the job market. In Europe, the freelance-segment is the faster growing segment on the labor market, according to EFIP. In fact IDC expects 45 percent of workers to be self employed in the next 5 years, either completely or in combination with another job.
Using freelance IT specialists who are hired on a project-dependent basis, is also more efficient than hiring traditional full time employees. The traditional recruitment process takes 42 days on average, according to the Human Capital Benchmarking Report from 2016. Then, it takes an additional 8 months for a new employee to reach full productivity, according to a study from Harvard Business Review.
Read more about how you can make your HR department more agile in this blogpost Agile HR: Recruiting is about access, not ownership. Combine this with the fact that almost 33 percent of new hires look for a new job within the first 6 months on the job, and 23 percent of new employees leave the company before their first anniversary, according to numbers from Harvard Business Review. That makes traditional retainment-thinking unsustainable.
These stats show just why a growing number of companies turn to employing freelance IT specialists: The labour market is changing. And the companies who understand how to reap the benefits of this trend, will be the winning companies of tomorrow.