We're a quarter into 2022, and conversations around worker shortages continue to dominate workspaces. Recent data from the US Bureau of Labor Statistics shows no signs of this trend stopping. Since February 2022, about 4.4 million Americans have quit their jobs, citing greater work flexibility, higher compensation, and more reasons for joining the Great Resignation.
Yet despite the influx of workers on the market, companies have been reporting acute labor shortages across industries and sectors. This has dramatically impacted companies across sectors as they struggle to ensure successful business performance amid inflationary pressures, supply chain disruptions, and digital transformation initiatives.
This is an especially dire situation for those in manufacturing. According to Deloitte, it's expected that the sector will have over 2.1 million unfilled jobs in the US by 2030 — significantly impacting the performance.
Another sector that is also poised to be impacted by current workforce trends is IT and technology. As reported by SHRM, recently published studies show that demand for technology-specific skills will continue in an upward trend in 2022, a marked contrast to employee sentiment with IT professionals saying that they are thinking of quitting their jobs in the next 12 months.
With the percentage of Americans leaving their jobs hitting 2.9%, a record high compared to previous years, it begs the question: where has the workforce gone?
Even though companies have revamped their talent strategies and are offering competitive benefits to employees, the number of open jobs on the market is increasing. Information based on IRS filings of specific employer identification numbers made available by the Census Bureau sheds some light on this phenomenon.
Since January 2022, the number of low-propensity fillings (number of people going into business for themselves) was 290,236 when adjusted for seasonality. However, when not adjusted for seasonality, the figures are much higher — about 445,536, which is 3.5%. This shows an increasing appetite for entrepreneurship among today's workforce and is partly why the labor market is so tight.
This workforce shift makes a lot of sense, especially when looking at Graphite data. The number of highly-skilled independent professionals joining our platform grew by 49% YoY in Q1 2022.
Double-clicking into the data, we see an influx of skilled professionals with strategic expertise both for key functional skills and highly sought-after industry skills year over year in Q1 2022.
These independent consultants act as microbusinesses themselves, with many running boutique consulting practices through the platform. When asked why many have decided to resign from their roles, the responses are the same: greater financial rewards, flexibility, and the ability to pick and choose the type of projects they want to work on.
On-demand hiring platforms like Graphite enable these professionals to use the platform as a source of business development. And companies themselves have also seen the benefits of leveraging this tool as a strategic growth lever, with spend for independent expertise growing by 90% YoY, reaching new all-time highs.
As knowledge workers seek greater freedom, companies will have to adapt to these new realities to thrive. Many have already done so by increasing spend for independent expertise on-demand on the Graphite platform, such as corporate strategy (559% YoY), market research (657%), and more.
For example, a market research firm faced a capacity gap on its team during an ongoing market access and pricing project. To fill the role, they engaged a Graphite account executive (AE) to look for a life sciences expert. Within 48 hours, the AE presented a curated list of five independent experts.
Over the next six weeks, the independent expert helped the market research firm collect the necessary data to answer its healthcare client's hypothesis, which would enable them to develop the right go-to-market strategy for its new drug. Satisfied with the expert's work, the firm has maintained the expert on its roster for similar projects in the future.
The same holds true for this SaaS company that needed help finding the right market price for its services. Instead of hiring a full-time employee, the company engaged a pricing analyst on-demand on Graphite to develop the best approach for packaging, price/metrics architecture, and price levels.
By conducting secondary market research, the independent pricing analyst expert was able to help the SaaS company update its pricing strategy, which also enabled them to execute its go-to-market strategy successfully. And in the process, the SaaS company was able to save $75K by onboarding an independent expert on-demand.
These are but a few out of many stories depicting how the employee/employer relationship dynamic has changed in the pandemic economy. Industry research supports this, revealing that the c-suite is starting to see the use of on-demand hiring platforms to gain a competitive advantage in today's tight labor market.
Interested in learning how businesses are building high-performing teams by tapping into the independent workforce? Download your copy of our 2022 State of On-Demand Hiring Report to get a closer look.