The modern business landscape is more competitive than ever before, but conditions have never been better for small and medium-sized enterprises (SMEs) to outperform their larger company counterparts. In fact the very business conditions in which they operate forces highly strategic choices and careful thought on each resourcing decision.
Up until now, these choices were seen as compromises which eroded performance – rather than hiring a new person for a particular skill or function, you would add that function to someone on staff who then would have to do their regular job, plus additional work that they may not be qualified for. This would de-focus them from what they are truly skilled at, and what the company hired them to do. The organization, therefore, would not only be performing the new function poorly, but it had also weakened another key area or function.
Enter the era of virtualized talent pools. Now the strategic resourcing decisions that SMEs must make allows them to have it all – the exact skills they need, in the amount they need, when they need it, and in a more affordable way.
The choice to resource virtualized talent will help strategic SMEs maximize their performance within all critical functions and roles and outperform any larger organization that remains boxed into conventional workforce structures.
Why Has This Virtualized Talent Culture Emerged?
- Unemployment: Necessity is the mother of invention – slowdowns in the economy and the resulting downsizing of large employers (government, technology, private and NFPs) has shed experienced and skilled workers who have much to offer and need to work.
- Risk: Individuals now recognize the increased risk that comes with hitching your wagon to one employer. This creates vulnerability where it used to create stability.
- Aging Population: Our population is aging and workers who have retired from conventional employment still have a desire to keep the professional and business sides of their brain lit up. They have a desire to contribute on a flexible or casual basis.
- Youth Unemployment: Graduates are no longer waiting their turn for the full time corporate job. They are becoming entrepreneurs in their own right and willing to work in any way that builds experience and generates an income.
- Evolving Workplace: Workplaces are moving towards flexible environments and away from bricks and mortar – the concept of virtualization is taking hold in most workplaces.
- Technology: Technology developments make it easier to work with and leverage remote workers and support strong collaboration from afar.
SMEs require skills and resources to cover all the functions and activities. With the availability and conditions supporting virtualization they can capitalize on these opportunities to create finely tuned, high performing organizations
Economic Advantages of Virtual Talent
In addition to creating high performing organizations, SMEs can realize the favourable economics of flex resources. SMEs can now fully service functions and roles with a blend of resources that provides strategic and tactical support at less cost than hiring a full time individual who can cover only part of the spectrum of requirements.
Is this a Blip or a Trend?
All organizations, large and small will need to strategically plan around workforce trends that will continue to move in the direction of virtualized talent. Industry Canada’s Key Small Business Statistics Report found that 98.2% of employers are small businesses and the growth rate is increasing.
SMEs employed 89.9% of the private sector employees and also account for 77.7% of net jobs created from 2002 to 2012. We also know that while technology and innovation continue to be strong indicators of corporate performance, another recent report from Industry Canada suggests that human capital is a positive and significant factor in firms reaching a high level of success in terms of both growth and profitability.
Finally the Conference Board of Canada recently released a new report which points to trends in the labour force that will continue to put pressure on organizations who want to find talent in a single hire with the right skills and experience needed to address their needs whether executive level or specialists.
Key findings include:
- Organizations will face challenges recruiting and retaining employees as Canada’s unemployment rate continues to fall (forecasted to drop to less than 6 per cent by 2018) and the labour force participation rate declines.
- Canada’s workforce is aging, but there are significant differences among industry sectors and job categories. The median workforce age is 44 years and ranges from a high of 48 years in the not-for-profit sector to a low of 39 years in the accommodation, food, and personal services sector.
- Senior executives (those reporting directly to the CEO) have the highest median age (52 years), followed closely by executives (50.3 years). Because these employee groups are similar in age, they will likely retire at similar times.
- Although reported skills shortages vary across region and industry sector, they continue to be a concern for many employers. A large majority of employers report challenges recruiting quality candidates with critical skills (80 per cent) and candidates with hot skills (72 per cent).
The ability to address these challenges with virtualized talent pools will be a key differentiator and critical success factor that SMEs are well suited to capitalize on. Understanding that the availability of flex resources will increase, coupled with the business realities of SMEs that often only require partial talent vs. full time creates a powerful business opportunity that will allow the seemingly smaller players to become the leaders in business on every measure.
If you want to take advantage of this new model of work, Business Sherpa Group offers virtual resources in Human Resources, Finance, Marketing and Strategy. Learn more about our services.
About the Author
Margo Crawford is the President, CEO and founder of the Business Sherpa Group where she has been involved with over 50 companies throughout North America from formation stage through to sale. Margo is a recognized thought leader in the area of human resources and entrepreneurship, and is passionate about the long term success of small and mid sized enterprises.