IQNsiders’ Dispatch: Joe Juliano on 3 Trends in the Labor Market

Yesterday at IQNavigator’s customer (and partner) event in Phoneix, Arizona, Joe Juliano, whom I used to work with many years ago at FreeMarkets, kicked off his keynote address by discussing 3 key trends that IQNavigator is observing in the labor markets. While some of these are “motherhood and talent pie” so to speak, it’s worth exploring them as a level-set for how contingent workforce and services procurement programs are evolving as well as the technology providers that are serving and enabling them.

No. 1

The first trend that Joe observed is perhaps the most obvious and the most echoed (in business today): a shortage of skilled labor, especially white collar and skilled industrial labor. He further noted that there are a number of factors impacting the challenge of limited supply and high demand in the labor markets. These include a lack of individuals getting advanced degrees to meet demand, a retiring workforce (e.g., 10,000 baby boomers alone retire everyday, and in Japan, there are more people retiring from the workforce than entering it) and growing demand generally – in both “developed” as well as “developing” countries.

No. 2

Second, Joe observed, companies want flexibility in their workforce. They want to enable greater flexibility in a downturn, for example, such as defined start and stop dates, when the next recession occurs without the overhead of taking write-downs for job cuts. Many want to get out of the business as much as possible of “hiring and firing” employees for non-strategic and long-term roles. This observation tied into one later in the day by another speaker who introduced the concept of “tour of duties” as a means to look at employment over a finite period at companies.

No. 3

Third, Joe notes that an increasing percentage of the workforce wants to engage with companies in a non-traditional manner. This is especially true in certain high-tech jobs. Joe observed in this regard that 56% of millennials chose flexibility over pay as a top requirement for deciding on a particular employer or career path – a factoid that will be all the more important in the coming decade given that by 2020, 50% of the workforce in the US will be comprised of millennials.

Adding to Joe’s observations, I would note a couple other high level trends that are likely just as important, and are growing more important by the day. The first is that lines are increasingly blurring between what business process outsourcing firms, managed services vendors, professional services providers, staffing firms and individual freelancers and independent consultants can accomplish – and companies are becoming increasingly aware of the margin arbitrage between the groups (and even, in certain cases, talent arbitrages as well).

And second, thanks to the rise of talent marketplaces and specialized services procurement firms and vendors, it is becoming easier for non-procurement and non-HR resources to engage third parties to accomplish specialized tasks than ever before. Circumventing the hiring or contingent workforce market is not just easier than before – it’s often more practical as well.

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