Why a flexible workforce model is critical to closing skills gaps

The time is ripe for Australia to embrace a flexible talent model that results in the best outcomes for both independent professionals and organisations, writes Sarah Kahlau.

Australia’s talent competitiveness has been under the spotlight, with the country ranking 18th out of 64 in a global talent competitiveness index. This position indicates that Australia still has significant ground to cover in bridging the skills gap and accessing quality talent.

According to the Australian Jobs and Skills Department, the employment-to-population ratio stands at a high 64.5 per cent, highlighting the intense competition among employers to secure available talent. As businesses grapple with these challenges, it’s becoming increasingly apparent that the workforce landscape is evolving rapidly, and new platforms and solutions are essential to meet the changing demands.

One significant trend is the shift towards independent professionals, also known as skilled freelancers, as companies increasingly adopt agile workforce models. These models enable businesses to scale their workforce according to project needs, access specialised skills, and respond to market fluctuations. However, attracting top-tier independent talent, especially those with niche skills, requires more than just competitive compensation.

Independent talent is here to stay

To succeed in this new environment, businesses must offer a holistic value proposition that includes fair treatment, favourable terms, and a sense of belonging. Achieving this requires a shift from short-term, transactional relationships to long-term partnerships which prioritises the professional growth of independent professionals.

In Australia, where skills shortages are prevalent in key industries such as technology, finance, and healthcare, providing opportunities for upskilling and community support is crucial. For example, recent initiatives by the Australian government to invest in digital skills training align with the growing demand for tech-savvy independent professionals, making these sectors particularly ripe for agile talent models.

Top talent gravitates toward jobs that prioritise their growth needs and ultimately benefit both them and their employer. However, traditional freelance contracts tend to focus on client needs only. What skilled independent professionals need is a new employment model, which doesn't merely match them with relevant projects; but instead creates an ecosystem where they can thrive.

This includes offering a supportive community, advocating for better market conditions, and providing opportunities for continuous learning. By adopting this future-focused and fairer model, clients will get access to the most skilled and motivated professionals who are essential for a project’s success, without facing the fixed costs that come with permanent employment contracts,

Consider the Australian technology sector, where demand for skills like cybersecurity and data analytics far outpaces supply. The 2023 IT Skills and Salary Report revealed that 41 per cent of IT decision makers are struggling to hire candidates with the skills they need, while 37 per cent find it difficult to even attract the right candidates in the first place.

The results of this drawn-out hiring process are clear: 45 per cent of decision makers are seeing increased stress among their employees, while 40 per cent claim that projects are taking longer, and 37 per cent aren’t meeting their business objectives.

So instead of trying to find a permanent hire from an increasingly shallow pool of candidates, independent talent can prove to be a better model for Australian organisations. This approach not only benefits independent professionals but ensures businesses have access to the expertise they need to drive innovation and growth and most importantly, complete their projects and keep their costs down.

The time is ripe for Australia to embrace a flexible talent model that results in the best outcomes for both independent professionals and organisations. As the demand for agile workforce models continues to grow, organisations that prioritise the needs of independent professionals can offer a valuable alternative to traditional employment models. As Australia navigates the complexities of its talent landscape, embracing a talent-centric approach will be key to staying competitive on the global stage.

Sarah Kahlau is the managing director in ANZ at Outsized.