Understanding the talent ecosystem best practices currently setting the standard for recruiting and hiring will help you stay ahead in 2024. Join us as we separate the genuine direction of travel from the hype and highlight three of the most important trends this year.
Trend #1: Increasing Use of the Extended Workforce
The near future will see an ongoing increase in contingent and gig worker demand. According to Statista, freelance workers are expected to reach 86.5 million in the U.S. by 2027, comprising 50.9% of the total workforce.
A 2023 survey of over 2,000 company leaders worldwide revealed that 80% were already using contingent workers. Additionally, 65% expressed their intention to further increase the utilization of contingent workers within the next two years. Of these company leaders, 70% faced challenges in integrating contingent workers into their workforces, while 44% highlighted the difficulty in finding contingent workers with specific skill sets.
These statistics align with findings from early 2023, where it was estimated that by 2024 contingent workforce participation would increase to 34% globally and 16% in the USA.
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Trend #2: Skills-Based Hiring
The move toward skills-based hiring has already taken root in many large corporations. A 2024 joint study by Harvard and The Burning Glass Institute confirms that it has gained momentum as more and more employers are replacing college degree requirements with direct evaluations of candidate skills.
Since 2022, an investigation by the IDB has identified that due to the high cost of post-secondary degrees, both students and employers have been seeking shorter, less expensive, non-degree alternative credentials, including:
- Certificates of course completion
- Certificates of training completion
- Certification of skills after passing an assessment
In 2023, this trend persisted. Wiley’s 2023 ‘Closing the Skills Gap’ report found that nearly seven in 10 human resource professionals believed their organization had a skills gap. Meanwhile, a Gallup report indicated that Americans’ confidence in higher education had fallen to 36%, significantly lower than in two prior reports in 2015 (57%) and 2018 (48%).
However, it’s crucial to highlight an unexpected finding from the Harvard study: even though employers are eliminating degree requirements, they aren’t changing their actual hiring practices. From a sample of 11,300 roles at large firms, it was found that the increased opportunity promised by skills-based hiring was realized in fewer than 1 in 700 hires last year.
That doesn’t mean there isn’t a focus on skills. It just indicates that recruiters are seeking candidates with both skills and degrees. Clearly, progress toward dropping degrees as a filtering factor is limited. That said, the same report notes that skills-based hiring offers tangible and measurable value—making it a trend that’s likely to persist and grow.
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Trend #3: Emphasis on DEI Initiatives
Incorporating diversity, equity, and inclusion (DEI) measures into HR procedures has been a growing trend for many years. In fact, a late 2023 report shows that 58% of HR leaders intended to place even greater emphasis on DEI that year compared to previous years.
Additionally, 65% mentioned that their DEI budgets had increased. 86% noted that the Supreme Court’s decision to overturn affirmative action in colleges has placed more pressure on employers to monitor and enhance their DEI efforts (even though the ruling does not apply to affirmative action or DEI practice in the corporate context).
The SIA’s MSP Global Landscape Summary 2023 revealed that buyers were turning to Managed Service Providers (MSPs) to assist them in enhancing the diversity of both their supplier base and contingent workforce. MSP investments included partnerships with industry experts aimed at aligning contingent workforce diversity programs with broader organizational objectives.
Notably, a greater range of DEI measures are becoming legal requirements. In 2023, California introduced its Pay Transparency Law, SB 1162, expanding pay transparency regulations to include contingent workers. Corporations in California are now required to provide data regarding pay equity, alongside information on the race, ethnicity, and gender of their contractors, every year. California isn’t the only state taking this step, as other states have been following suit by passing similar laws.
Certainly, DEI extends beyond merely being the right thing to do: it offers tangible benefits. If you’re keen to learn more about these benefits, we discuss them in greater detail in our ebook, “3 Ways DE&I Initiatives Enhance Your Total Talent Workforce.”
How Can You Adopt All of These Trends?
There’s no better way to expand your contingent workforce than with a vendor management system (VMS)—and the right platform will help you foster a skills-based hiring approach into the bargain. VectorVMS offers various tools to streamline the management process of temporary staff, including diverse sourcing methods and enhancements to help you hire top-tier talent.
If as part of your efforts to expand beyond non-traditional hiring you’re extending your reach to include workers around the world, you’ll want to ensure that your VMS can support multiple languages, currencies, and locations within a single interface. This is particularly crucial from a billing and user management perspective.
Finally, in order to effectively comply with new pay data legislation such as that passed in California state, it makes sense to integrate with a tool capable of tracking diversity within your extended workforce from the sourcing stage. Not many providers offer this capability natively: VectorVMS is one of the first providers to include it.
Looking for more trends? Find our complete expert selection in our ebook ‘The Top 5 Macro Trends Driving Workforce Management in 2024’. Alternatively, contact us or request a demo and see how VectorVMS can maximize the effectiveness of your hiring and recruitment programs!
Meet the Expert
Taylor Ramchandani – VP of Strategy
Taylor Ramchandani is responsible for the management and strategic planning of the VectorVMS vendor management system. Taylor is committed to client satisfaction and to ensuring VectorVMS technology meets the current and future needs of clients and managed service providers (MSPs). She uses market research and in-depth industry experience to create products and services that make extended workforce management efficient and intuitive. Taylor oversees product development, marketing, and business partnerships for VectorVMS and is responsible for driving innovation for contingent workforce management. Connect with her on LinkedIn.
