Small businesses need help, and lots of it.
Compared to large enterprises, small businesses often don’t have the resources to quickly pivot and hire whatever talent is needed at the time. In 2020, Paycor found that small business spending on labor can add up to almost 70 percent of total costs, meaning that small businesses that want to hire new talent often don’t have the funds to do it.
And if they don’t, small-business owners risk losing their share in the market to larger companies who have the means to recruit resources faster.
But there is a solution. Ever since the first American corporation, Boston Manufacturing Co., started in 1813, workers were divided into two groups: full-time and part-time. Now, there’s a third option: flexible talent. Independent contractors, also known as freelancers, offer a way for businesses to get the talent they need on-demand without typical hiring processes.
Here are three reasons small businesses should consider harnessing the power of flexible talent in order to grow their business without hefty hiring costs or commitments.
1. Hiring full-time employees is not always sustainable or attainable
According to Investopedia, the average cost of a new hire can be up to $1,500 per employee, and it can take up to six months just to break even on these investments. In addition to the high costs of onboarding, SHRM found that the average time to hire a new employee is 42 days — compounding an incredible delay onto an already costly process. Unfortunately, employees don’t always stay in their role long enough to justify the money spent on them. The United States Department of Labor revealed that a failed hire can cost businesses up to 30 percent of the employee’s first-year earnings, up to $240,000.
For small businesses trying to survive as everything around them is changing, they don’t have the money, or the time, to waste on hires that may stay for only a year, or not even work out at all.
As the business world enters a new digital era, general full-time roles simply aren’t agile — not to mention that finding skills is becoming more difficult. Reuters surveyed small-business owners this year and found that 93 percent of owners looking to hire reported few or no “qualified” applications for the positions they were trying to fill last month, due to a lack of high skills needed for these roles.
To adapt to changes and stay competitive, small businesses can’t always rely on full-time staff to learn new skills quickly. They need a more affordable, sustainable way to scale the business without going broke or feeling tied to full-time talent. And with the demand for high-skilled jobs sitting at 175 percent, small-business owners must find a way to get elite talent that doesn’t require competing with large enterprises to get it.
2. Flexible talent provides an external perspective
Every business has a blind spot. It’s easy to get lost in the day-to-day tasks, especially in a time where keeping the business alive is the main focus. Flexible talent helps solve this issue.
As mentioned above, highly skilled talent is hard to come by these days- 175 percent harder to come by. According to a survey conducted by and.co, 61 percent of freelancers say they specialize in two to three talents. For small-business owners, hiring a freelancer to span three skills at half the cost of a general full-time employee not only provides a way to beat the competition in the race for skilled talent, but it also ensures that multiple areas of the business are being examined by a skilled set of eyes trained to look for issues.
In addition to providing an extra set of eyes on business plans and strategy, flexible talent provides additional skill sets that full-time staff may not be able to contribute. Twenty-three percent of small businesses fail because they failed to assemble a strong team, according to CBinsights. Oftentimes, this isn’t because the full-time talent themselves isn’t good enough, but because they failed to bring in external, freelance talent to supplement their efforts. Flexible talent makes it easy to build a high-performing team quickly, and full-time staff will not only meet outcomes quicker but get the chance to earn transferable skills from one another.
If you need more evidence to support the benefits of hiring freelancers, here you go: LinkedIn found that 83 percent of small businesses who frequently hire freelancers agree that freelancers greatly help get the job done. Especially in a time where full-time staff are more focused on accomplishing the bigger picture of the business (i.e. not letting it die), freelancers can be plugged in where attention is needed most, so projects don’t fall or get left behind as the business simultaneously focuses on staying alive.
3. Small businesses need more agility in 2021
The business world we once knew pre-pandemic is gone and surviving as a small business has become much more difficult. As of 2021, Politifact revealed that there were 37.5 percent fewer small businesses open nationwide compared with January 2020 — a scary reality that shows how quickly shifts in the world can negatively affect the business landscape.
This is where flexible talent comes in. There’s been much talk in the business world regarding “flexibility.” While this term can mean offering flexibility in the workplace, flexibility regarding talent is what will matter most to small-business owners.
Bringing in flexible talent, also known as freelancers or contractors, is not new in the realm of small businesses: in 2018, a study conducted by LinkedIn found that 51 percent of sole proprietors have already used freelancers in the past, and intend to hire more. Fast forward to 2021, and small businesses are in even more desperate need for skilled talent to help finish work or projects that full-time staff may be too busy to handle- which is timely considering the freelance population is booming. In 2020, Upwork found that 36 percent of the workforce was freelancing, and found in 2021 that 20 percent of workers are currently considering freelancing, which could increase the freelance population by 10 million. Freelancers and the agility they provide are becoming more accessible by the day.
Agility within teams is necessary to survive in the current world, as it gives owners room to quickly solve issues without over-stressing their full-time workers. However, agility goes deeper than just flexible talent- it also applies to how small businesses find them. It’s tempting to slip into the traditional ways of hiring and find talent through internal efforts, but this only results in similar delays and costs of hiring full-time talent. Deep talent platforms, such as FlexTal offer small businesses a way to quickly hire vetted flexible talent (typically within just seven to 10 days), for flexible engagements that can cater to their budget and current business needs. By opening an avenue for hiring deeply skilled talent that can be adjusted as situations evolve, small businesses can easily stay competitive within the market by adapting to digital trends whenever needed.
It’s not easy being a small business in a constantly shifting landscape, but adding flexibility to your team with contract talent can provide valuable agility. By pulling in skilled talent as needed, small business teams will be better equipped to handle the speed of change and come out the other side thriving.
The post 3 Reasons Your Small Business Needs Flexible Talent appeared first on Entrepreneur
Original source: Entrepreneur