Employers across vast swathes of the Australian economy have embraced the flexibility of the gig economy over recent years, as the ‘uberisation’ of the global workforce continues apace. The benefits of this trend to employers have been well documented, with limited commitment and payment for services on demand resulting in streamlined employment costs for many industries.
However, as economic uncertainty and sluggish growth continues ahead of the upcoming Federal Election, what hasn’t been as widely reported is the growth in Executive Contracting, or the demand for engaging highly-experienced, and in many cases C-level, individuals on an interim basis.
On reflection, given the numbers coming out of the US (which tends to lead the way in labour market trends), this is hardly surprising. A 2017 study by LinkedIn predicted that “by 2020, a staggering 43% of the US workforce will be made up of workers who freelance.”
Granted, the study was conducted at the height of the US employment boom (when candidate-short markets usually result in an increase of contingent labour opportunities), but even if this has cooled in recent months, it’s clear the gig economy is here to stay.
What is different is that this is no longer confined to the volume end of the market. As indicated above, tight labour markets tend to encourage more contingent labour hires, and Australia, for all its uncertainty, still has a historically low 5% unemployment rate. Anecdotal evidence from OnTalent’s client base seems to back this hypothesis, with organisations in Australia increasingly open to hiring executives on an interim basis to maximise value but limit liability.
This is particularly true in the start-up market, where paying in excess of $250,000 per annum for a Chief Financial Officer, for example, just isn’t an option. Add to this the fact that executives are increasingly seeking work-life balance options as they juggle their careers with the demands of raising a family, and it’s not difficult to imagine this market growing significantly in coming years. What is refreshing about this development is that it is as much candidate as client led, meaning the contingent market for executive labour won’t necessarily have the pitfalls of ‘underemployment’ often associated with lower paid roles.
In summary, as Australia struggles to adjust to the post-resources economy and continuing political uncertainty, 2019 could be the year that “Executives for Hire” becomes the norm, rather than the exception to the rule.