Talent mismatch causing problems for businesses

Friday 11 April 2014

Failing to employ the right people to do the job at hand is costing businesses in terms of  productivity and recruitment expenditure, according to PwC research, suggesting that contractors could be the answer to plug the gap.

The study 'Adapt to survive', commissioned by LinkedIn, showed that poor talent adaptability is draining the economy of millions of pounds. In the 11 markets analysed, it is believed total losses could be as much as £96 billion.

Researchers analysed interactions from LinkedIn's network of 277 million professionals and information on 2,600 from PwC's Saratoga database. Focusing on five key talent behaviours in 11 markets, it compared the UK's ability to match talent with that of the Netherlands, which was deemed to be the most adaptable market.

It was revealed that Britain is losing out on £940 million of additional productivity by failing to unlock it's talent.

This also leads to recruitment costs of £270 million, with companies haemorrhaging cash the longer it takes to find the right candidates.

While the UK is still the second most adaptable country based on its Talent Adaptability Score, there is more that can be done.

Michael Rendell, partner and global head of HR services practice at PwC, said: "Businesses’ growth strategies are changing and many UK CEOs recognise that they don’t currently have the right people with the right skills in the right places to achieve their aspirations.

"Instead of a skills gap hampering growth plans, organisations need to be better at matching talent to opportunities. This includes using analytics to identify skills that are central to the business strategy now and in the future, improving internal mobility and rewarding people who display new and adaptable skills."

So where does this leave contractors? They certainly have a role to play in dealing with the talent mismatch. With proven professional track records and skills, they can help to plug the gap until the right candidate is found, while supporting companies in their efforts to manage the skills shortage.

Freelancers are aware of how they can benefit businesses too and are already taking full advantage of the opportunities available to them.

Demand is high and the PCG's latest 'Freelancer Confidence Index' showed that over the next 12 months, 33.5 per cent of contractors expect their business to be better off.

Over the last three months alone, 17.9 per cent claim their revenue has gone upwards.

In the next year, 26.7 per cent of freelancers expect to experience a rate rise from the average daily contractor rate of £500.

What's more, 73 per cent of self-employed individuals have not been unwillingly out of work for the last three months, indicating that they increasingly being used by businesses to fill a gap.

During the first three months of the year, just 14.7 per cent of contractors spent more than a month out of work.

This led to a balance of +25.7 per cent being recorded for the availability of contracts in Q1 2014.

By Victoria McDonnell

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