By Tunde Oyadiran

In view of the evolving impact of the Covid-19 pandemic which has seen workers opt to resign their employment for one that offers more flexibility and convenience; what has now come to be known as, The Great Resignation, a look at trends of using contingent workers, freelancers, and gig workers to scale and augment staffing needs.

The changing employment landscape resulted in a growing contract workforce, platform-based hiring methods, an increasing number of highly skilled contract workers, a changing legal landscape, and more contract-to-hire employment strategies.

The pandemic forced a shift in the way we work. Today, as against contracting outsourcing firms to assist with staffing, companies can hire staff themselves as majority of contract workers offer their services on various platforms.

READ ALSO: Arrel ‘Whyne’ world from COVID-19

The concept of platform-based hiring implies no piles of printed resumes, no multiple rounds of interviews, and no onboarding, ultimately leading to lower talent acquisition costs when compared to permanent employees as they are cost-effective and user-friendly.

This article will assess the benefits of a well-articulated contract staffing strategy.

Contract staffing remains a viable solution, not only for satisfying administrative needs, but also senior level engagements for strategic and leadership expertise.

This coupled with the clamour by Environmental, Social, and Governance (ESG) activists for ‘equitable’ employee treatment, this article seeks to address economies of contract staffing and the need for companies to adopt a clear, dynamic and unambiguous strategy in its implementation.

Evaluating the argument for machine vs people solution as a sustainable productivity strategy amidst the global supply chain crisis exacerbated by shortages of factory workers, truck drivers, coal and power.

In the wake of Sultan Mehmet II’s invasion of the Byzantine Empire in 1453, Constantine XI’s cry to Europe for reinforcement to avert an impending overrun of Constantinople by the Ottoman army attracted the support of a famous mercenary from Genoa, Italy; Giovanni Giustiniani alongside his 700 soldiers. Giustiniani was an expert in defending besieged cities, best known for commanding multi-ethnic armies and strengthening the defences of his host cities to withstand the enemy’s attack. Despite the ingenious attacking strategy of the Ottoman army, Giustiniani’s led Byzantine army fought valiantly and resisted the barrage of bombardment by the ranging Ottoman army for six (6) weeks until he was injured. The injury forced him to retreat from the battlefield which weakened the morale of the defending army and eventually resulted in the conquest of Constantinople. The Ottoman army was also made up of a significant number of mercenaries including the Janissaries, Timariots, Bashi Bazouks, Sekban, etc. Mercenaries are for-profit, well-trained, armed civilians specialized in military operations. In addition to the weaponry sophistication and strength of an army, the quality of Mercenaries has also played a crucial part in determining which waring side becomes victorious. The use of mercenaries is still being replicated by organizations today. In this case, however, there are no battlefield wars to fight or cities to defend, only profit and strategic goals to achieve. If Giustiniani had lived in these times, he probably would have been the biggest agency in Europe, and his 700 soldiers deployed to different organizations as contract staff. Today, the concept of contract staffing has evolved and inspired titles ranging from casual, temporary, seasonal, and outsourced staff to consultants, freelancers, and gig employees. In the course of this article, these terms will be used interchangeably.

Over the years, a paradigm shift has inspired a change in the way companies implore contract employees, from clerical workers who provided stopgap solutions for employees on vacation and sick leave to semi-permanent positions as companies would rather outsource certain roles to staffing agencies for efficiency and proper management. In some instances, companies embrace the concept of contract staffing primarily to mask their identity to avoid paying certain employment benefits (Pension, medical insurance, severance
packages, etc.). Positions have also become temporary and as a result, contract staff are used in a more planned and systematic manner.

The pandemic-induced disruption forced changes in ways that were unimaginable and effectively changed the employment landscape. The pandemic helped people reflect on what mattered to them as they witnessed the unpredictability of life. People started to re-imagine their lives; one that their work revolved around their lives and not the other way around. This led a lot of people to quit their jobs. According to Anthony Klotz, a Professor of Management at Mays Business School of Texas, USA, this trend could be seen as the Pandemic Epiphany as he used the term ‘Great Resignation’ to describe the phenomenon. A Microsoft survey revealed that 20 million Americans have left their jobs since April 2021 with 4.3 million of them (2.9% of America’s workforce) leaving in August 2021 alone. In Germany, one-third of German companies are short of skilled workers and as of October 2021, there were, at least, more than 400,000 vacancies for skilled workers. The OECD (Organisation for Economic Co-operation and Development with 38 member countries) data shows that at least, 20 million workers have not returned to work since the outbreak of Covid-19. In India, the attrition rate in the tech sector is up 23% year-on-year and in the Caribbean, 1 in 6 workers aged 18-29 years has left the workforce. Some have argued that it is a one-off occurrence, however available data suggests that the worst might not be behind us. Another Microsoft survey revealed that 41% of employees worldwide want to quit their jobs in 2021. Similarly, a study by Monster.com shows that 95% of Americans want to quit their jobs this year, and some already have. Without a doubt, it is fair to argue that the Great Resignation, otherwise known as the Workers’ Revolution, will go down in history as one of the many legacies of the covid-19 pandemic.

While factors such as unemployment benefits, inadequate pay, caregiving, relocation, and fear of contracting the virus have been fingered as the leading cause of people quitting their jobs, that is only half the story. The elephant-in-the-room is the desire for Work-Life balance and flexibility. On the response to why people quit their jobs, a Limeade survey on why people quit their jobs revealed that 40% was as a result of Burnout, 20% for lack of flexibility and 16% said their employers did not support their well-being. To get a sense of what employees were looking for in their new jobs, the survey revealed that 40% will opt for the ability to work remotely. Consequently, most of them resorted to quitting their full-time jobs for contract jobs and freelancing. They argued that the flexibility it provides makes them more employable across sectors. For companies that place a premium on promoting an
agile workforce, contracting plays a vital role as it gives a competitive edge in matching resources to needs at every point in time. Be it contracting, freelancing, or gig employees, contract staffing provides recruiters with a larger skilled cross-industry talent pool to fill short-term business needs, reduce liabilities, enable efficiency and ensure access to specialized expertise.

Despite the highlighted benefits of contracting, some downsides exist. The absence of company health insurance means exposure to the challenge of off-pocket or expensive individual health care plans which result in severe financial drain. Contract Staff hardly get matching savings, pension, and severe benefits. This has been a major cause of worry for financial planners as they argue that freelancers might not have enough saved for retirement.

Corporation laws of most countries and best practice encourages Directors and core management staff to be hired directly by the company which invariably disqualifies contract staff from most board room positions. The use of non-compete clauses that require that workers do not take up roles with competing brands for some time will be difficult to enforce where the company does not directly employ the individual. Some contract staff have argued that they suffer social exclusion which makes them become loners in the office environment. Notwithstanding the shortcomings so identified, the talent shortage problem has seen recruiters scrambling for an alternate solution. The fear of hiring the wrong candidate and its negative impact on the business have forced companies to resort to contract staffing as a viable solution. The contracting strategy remains a formidable way of building a career from the ground up or building upon an already established career as it provides a range
of opportunities they ordinarily won’t have found on their own.

Available data suggest that by 2025, more than 50% of talents will choose self-employment, and of those that decide to remain permanent employees, a significant number of them will freelance by the side. The staffing strategy of the future should not perceive the co-existence of permanent employees and contract staff as mutually exclusive. Realistically, the focus should be to achieve a good blend of both perm. and temp. staff. Put differently, the explosion of freelancers does not mean the extinction of permanent staff as it’s very unlikely that one will replace the other but rather the existence of both parties will amplify the impact of their co-existence towards achieving organizational growth. Not everyone has the discipline required to freelance, a lot more people will still opt for the structure, security and stability that permanent employment offers.

In the wake of growing awareness about Environmental, Social, and Governance (ESG) policies driven primarily by climate change, social inequality, organizational governance, social practices, and most recently, the impact of covid-19 concerns, organizations are putting ESG criteria in the heart of everything they do. Investors want to invest in companies that adhere to ESG standards. A global leader in providing ESG ratings; MSCI reported that
companies with robust ESG policies enjoy a lower cost of capital and are less exposed to risks compared to their counterparts with low ESG scores. More importantly, there’s been an increase in the scrutiny of companies regarding diversity and inclusion of their workforce. Specifically, stakeholders can now assess the fair treatment of the workforce’s well-being, development, and general welfare.

In addition to workforce diversity and inclusion as well as social mobility that ESG activists propose, commuting-related emissions avoided by contracting freelancers is also a source of positive ESG rating for companies. A 2020 survey of 760 respondents by Upwork (a freelancer jobs platform) to evaluate commuting patterns and their impact of carbon emission revealed that miles travelled by respondents reduced by over one million miles
as a result of Upwork’s remote working policy.

The age-long debate about humans versus machines has been a topic of discussion for decades. Many have argued that it is not unlikely that highly effective robots will replace a significant portion of human labour by the end of the century. The recent challenges of global supply chain disruption exacerbated by the lingering impact of the covid-19 pandemic and its different variants have exacerbated the human vs. machine argument. Today, delayed delivery, empty shelves, and out-of-stock goods have dominated shopping
conversations further raising concerns about the impact of supply chain disruptions. The U.S is running out of Turkey and Christmas Tree for Thanksgiving and Christmas, Australia doesn’t have enough timber to build houses, the U.K is running out of carbonated drinks, carmakers are running out of chips, there’s a shortage of toys and shoes. With factory workers becoming sick from contracting the covid-19 virus or going into quarantine, the
production process in most countries was forced to halt which eventually led to massive shortages. A typical supply chain involves multiple players, thousands of workers and multiple modes of transportation. A disruption in one of the parts could throw the entire supply chain off course by days or weeks but a disruption at several points could certainly disrupt the entire supply chain for months. With a shortage of factory workers post-pandemic related lockdowns, Truck Drivers refusing to come back to work, or being refused entry back at the office as a result of their vaccination status, the entire supply chain collapsed completely.

For decades, concerns of new technologies disrupting the workforce leading to job losses have dominated conversations about Artificial Intelligence (AI). These concerns have been dispersed by Pro-Human Activists citing the indispensability of the need for human input in any job role. However, the outbreak of Covid-19 provided a counterargument as companies opted to avoid the workplace spread of covid-19 infections by replacing humans with robots. Save for technological advancement, nothing else has provided a compelling incentive for companies to automate as many human jobs as the pandemic did. A group of economists estimates that 42% of jobs lost during the pandemic are gone forever. According to a publication by MIT and Boston University, robots could replace as much as 2 million more workers in manufacturing alone by 2025. While companies accelerated the deployment of Robotics and AI to enhance productivity and build resistance to the impact of future pandemics by being less reliant on humans, governments are struggling with a double whammy of lower revenue as machines don’t pay taxes and providing safety nets for displaced workers by way of unemployment benefits. The government is increasingly becoming concerned about how people are phased out and replaced by machines.

In a statement credited to the Co-Founder and CEO of Tesla, Elon Musk said “computers, intelligent machines and robots seem like the workforce of the future. And as more and more jobs are replaced by technology, people will have less work to do and ultimately, will be sustained by payments from the government.” Businessmen, industrialists and politicians have raised an alarm of the potential of AI discovering new levels of prosperity never known
to humans, but it also holds the potential to disrupt economies, ruin lives and invariably, destroy humanity. At the pace that technology is advancing, the world could be heading into uncharted territories that could see millions of people displaced and jobless. That said, history suggests that overtime labour markets adjust to changes in demand for workers from earlier technological disruption albeit at lower wages in some cases. Another guide by history suggests that over 8% of the labour demands in 2030 will be in new types of occupation that did not exist before.    

In conclusion, while we acknowledge the clamour for the need to curtail and monitor technological advancement to avoid a possible social and economic disaster, there’s a need to point out that with robust economic growth, innovation and investment there will be enough jobs created to offset jobs lost to machines. On their part, workers must focus on upgrading and retraining themselves in a bid to make them employable and nimble to make the relevant career switch in the event of any development that will endanger their means of livelihood.

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