Companies today use a wide range of talent acquisition models to address capacity gaps in their teams. However, one model stands out amongst all others: on-demand talent acquisition.
While organizations have long used traditional talent acquisition models to supplement workforce strategies — turning to staffing agencies and recruiting firms to onboard full-time and local contract workers — the model of onboarding talent on-demand provides companies with what they need most today: skilled knowledge workers.
This is where an on-demand talent platform like Graphite comes in. It works by connecting businesses with independent experts on-demand with subject matter expertise in specialized areas like corporate strategy, market research, finance, and more. There are multiple benefits of adopting this approach, such as:
- Gaining access to top-tier talent worldwide
- Accelerating speed to market
- Obtaining greater workforce capability
- Addressing capacity and capability gaps in real-time
So what are the main reasons why companies are moving beyond traditional talent acquisition models? And what’s the difference between on-demand talent acquisition and the top three talent acquisition models, such as staffing agencies, recruiting firms, or in-house hiring?
The 3 Pitfalls of Traditional Talent Acquisition Models
There will always be a need for the traditional approach to finding and onboarding talent. But to meet the challenges posed by today’s unique labor market, companies must also adopt alternative workforce models.
The way that high-performing teams get work done is evolving at a rapid pace. 68% of US-based employees prefer remote work versus working in the office, and 61% would even accept pay cuts if they could work from home.
And remote work isn’t the only shift that we’re seeing. The gig economy is in full swing, with the number of freelancers in the US set to rise from 70.4 million in 2022 to 90.1 million by 2028. Not only do Americans want to work remotely, but increasingly, they want to do so independently.
So what does this mean? Well, for one, companies need to be creative in how they fill mission-critical roles. Traditional recruitment models don't align with today's new work realities and project-based economy. Secondly, they're time-consuming, inflexible, and, most importantly, don't guarantee results.
When companies need to plug a long-term gap, they generally take a slow, methodical approach to recruitment. They have to:
- Prepare a job analysis
- Conduct a job evaluation
- Post a job ad
- Go through multiple stages of applicant filtering
- Offer the right candidate the job
- Wait for the candidate to complete their notice period
In total, this takes roughly two months (and, in some cases, even longer). Companies understandably want to take their time, yet there's still no guarantee that the person they have chosen will be the right fit.
Even if they are, they will generally still take a while to get up to speed, further delaying the time until organizations derive a tangible return on investment (ROI) from the new hire.
Companies can use on-demand talent platforms to access a list of pre-vetted candidates with demonstrable expertise in specific areas. They simply post a project or job need, filter through the applicants, and are paired with an independent expert in 24-48 hours. On Graphite, this end-to-end process takes an average of 13.5 days.
It Doesn’t Guarantee Results
An estimated 74% of employers admit to having hired the wrong person, with each hiring mistake costing nearly 30% of the employee's first-year earnings. In other words, the monetary costs of hiring the wrong person can be astronomical, without even considering the wasted time, effort, and impact on firm-wide productivity.
On-demand talent platforms like Graphite are incredibly selective. Only the best independent knowledge workers are accepted — meaning companies will be working with the cream of the crop. Consultants on the Graphite platform boast a wealth of experience working with MBB, Big Four, Fortune 500, and other industry-leading companies.
Traditional hiring models are unable to scale. Companies are forced to sign inflexible contracts that can't easily be changed or updated on an ongoing basis according to what the business needs at that particular moment in time. However, with on-demand talent platforms, organizations can scale as business and client needs evolve.
How On-Demand Talent Acquisition Differs from the Top 3 Talent Acquisition Models
Staffing Agencies vs. On-Demand Hiring
Staffing agencies focus on matching qualified candidates with companies on a short-term, temporary basis. Yet there are various limitations to adopting this hiring model to address your talent needs. For one, staffing agencies' talent sourcing methods are highly localized.
Not only does this not align with employees' increasing demand for remote work, but the recruitment is based on an outdated process that eats up both time and money. Staffing agencies rely on job websites, ads, networking, and cold calls to find a candidate. These tactics are time-consuming, which is unsuitable for organizations looking to quickly fill capacity gaps for urgent, time-sensitive projects.
Worse still, the talent they're looking for (e.g., highly skilled knowledge workers) are increasingly joining the ranks of the independent workforce. In Q1 2022, the number of independent consultants joining Graphite, for example, increased 90% YoY.
On-demand talent platforms, however, provide access to a global network of highly skilled independent experts.
Recruiting Firms vs. On-Demand Hiring
Recruitment firms are similar to staffing agencies, matching qualified candidates to companies in need of additional personnel. However, they largely focus on sourcing long-term hires (though they might sometimes handle short-term roles on a case-by-case basis).
Companies typically engage recruiting firms on lengthy contracts aligned to their organization’s long-term goals. These contracts typically include clauses stating the company will pay their recruitment firm anywhere from 20-25% of the hire’s first-year salary, adding to their overall hiring costs. And as mentioned earlier, these long-term contracts don't guarantee results.
One of the reasons that results are not guaranteed is the extremely volatile market we are in. Companies that operate in fast-moving, volatile markets can barely predict what they will need next quarter – let alone a year down the line.
Their industry, competitors, and goals are always evolving. This has led to the rise of the project economy, with organizations shifting their focus to efforts that drive “both short-term performance and long-term value creation.”
As a senior IBM talent executive states, “Soon we will no longer have job descriptions…We will have only project roles.”
And even when an organization does onboard a new hire, there's no guarantee they'll be right for the role. If they aren't the right fit, the company will have to start the recruitment process from scratch.
On-demand talent acquisition is perfect for meeting short-term objectives and addressing immediate needs. Companies can even prepare ahead of time by creating a pool (or a bench) of resources they can bring on board when necessary.
In-House Recruitment vs. On-Demand Hiring
In-house recruitment teams are tasked with creating the company’s overarching recruitment strategy. They usually oversee the sourcing, vetting, and onboarding processes for all types of employees, whether full-time hires or short-term contractors.
Companies generally turn to in-house recruitment teams to save time, effort, and money. But in an environment where human capital needs are evolving rapidly as the economic uncertainty plays out, in-house recruitment teams are facing unforeseen challenges.
Several human resource leaders have found an ally in on-demand talent platforms. They've come to appreciate this faster, easier approach to bringing onboard some of the top experts in their field.
On-Demand Talent Acquisition: A Strategic Growth Lever
On-demand talent acquisition is rapidly growing in popularity. In a study by Boston Consulting Group (BCG) and Harvard Business Review (HBR), 90% of leaders surveyed mentioned that they believed that the ability to onboard independent knowledge workers using platforms like Graphite would be instrumental in their ability to compete in the future.
Data from our platform backs this trend. In 2021, companies increased their spend on hiring independent experts on Graphite by over 170% YoY — and this meteoric growth doesn't look set to end any time soon.
Organizations can use on-demand talent acquisition platforms to rapidly plug capacity and capability gaps, achieve short-term goals, and gain the expertise they require for a fraction of what recruitment typically costs. This flexible hiring model has never been more valuable in a fast-changing world where businesses constantly adapt to ever-evolving requirements.