The gig economy is remarkably robust and growing faster than ever. In 2020 alone, there were 5.1 million contingent workers in the U.S. Unsurprisingly, 77% of executives surveyed by CXC said freelance and gig workers would replace a significant number of full-time employees in the next five years.
Contrary to popular belief, hiring contingent workers isn’t relegated to choosing people who can only perform routine or tactical functions. In fact, there has recently been a shift in using contingent workers to supplant high-level talent, such as C-suite level professionals.
These fractional executives bring a wealth and breadth of knowledge that can benefit companies of all sizes. Monster recently wrote about this growing phenomenon, highlighting the journey of one woman who leveraged her corporate acumen to accept a multitude of short-term roles, from CEO to vice president to chief strategist. She’s far from the only executive to shift to contingent work.
What drives someone who has been a CIO, CHRO or CTO to move into the gig economy as a freelancer or short-term contractor? Each person has unique reasons. For some fractional executives, contingent work offers the opportunity to share their skills while learning in various industries. Others enjoy the freedom of setting their schedules and the flexibility it gives them, along with the ability to provide value at more than one company.
What drives companies to use contingent workers for executive positions? Many organizations are struggling to find high-level talent. Hiring contingent workers to fill leadership roles puts businesses ahead in the war for talent and sets them up for future success.
The Benefits of Contingent Workers in C-Suite Talent Acquisition
As CEO, you can see several advantages in recruiting and hiring contingent executives for your team. The first is that it’s better for the corporate budget because you aren’t adding a full-time position to your head count. In addition, outsourced C-suite members often don’t work full time, which brings down costs.
Another advantage that’s particularly important if you run a newer business or startup is the ability to get advice from seasoned executives early in your company’s life. This saves you the time and budget of finding full-time C-suite members when your business is young. Contingent executives can step in, make recommendations, and eventually step out when necessary.
The final benefit of contingent workers in the C-suite is that they offer a strategic, objective perspective. Outsourced executives don’t have the same biases as people who have worked at your company for years. Contingent executives can provide 1,000-foot views of your organization instead of getting lost in the weeds of the everyday.
Of course, there are times when it’s more appropriate to hire full-time C-suite talent rather than outsource certain positions. How can you determine if a contingent leader would make more sense? Consider some of the top situations in which your company might want to use contingent workers for high-level talent:
1. The position doesn’t warrant full-time work. Depending on your company’s life cycle, you might not need a full-time C-level executive but could still use some of the strategic outlooks a C-suite leader provides. Consequently, spending the time, effort, and budget to hire a full-time executive isn’t always necessary.
Take the CIO position, for example. The need for highly skilled IT talent is on the rise, so it might be difficult to find the right fit for your company, and you might not have the tech stack that warrants a full-time CIO. Bringing in a contingent CIO rather than putting a CIO on salary can fill IT gaps and be budget friendly. The outsourced tech leader can offer up strategic knowledge and help with organizational initiatives while filling the gap you’re experiencing for the time you need help.
In the past, our company has used contingent CIOs. The decision propelled our technology forward. We remained competitive within the marketplace without incurring the hefty annual costs of another full-time C-level employee.
2. There are knowledge gaps among your C-suite members. Even if you have a strong C-suite team, you might still have critical knowledge gaps in certain areas, like finance or HR, that can put your company at risk. In these situations, a contingent executive with the skills and knowledge your team lacks can step in and provide actionable advice and intelligence.
For instance, you might consider hiring a fractional CFO. The contingent finance leader could show other executives or even an up-and-coming CFO on your team how to translate financial data or strategize based on complex fiscal reports. Ultimately, the outsourced CFO would leave, and the permanent CFO would better understand how to proceed.
This same theory works for all contingent executive positions. A contingent CHRO, for example, could shepherd an HR team and oversee all aspects of its growth plan for a short period. When the team is up to speed, the CHRO could leave for another assignment or stay on longer to help with execution.
3. It is taking too long to find a full-time executive. Some experts estimate that it can take about 12 weeksto hire an executive. However, with the current labor shortageand so many people preparing for retirement, the actual time frame could vary regarding C-suite talent acquisition.
If you’re looking for an executive candidate, you probably can’t afford to keep that seat empty for long. That’s where a contingent leader can step in to take over day-to-day details while you search for a permanent candidate.
An outsourced executive could also be brought into the hiring process as an interviewer or advisor to help you find the best person for the position. This would enable you to get the most value from a C-level contingent leader.
Companies that use contingent workers don’t need to limit themselves to a certain type of fractional employee. Any position requiring high-level talent, especially in the C-suite, can be pulled from the growing gig economy.