Opportunity for new agency business model created by skills shortages

The growing skills gap

Certain areas of the jobs market are experiencing skills shortages. The list of skills shortage roles includes architects, accountants, solicitors, barristers, vets, engineers and special needs education teachers. Dentists, midwives and a multitude of other medical positions, are also in high demand.

In one area, technology, the predictions are dire. In March this year the BBC business reported the somewhat alarmist story, UK ‘heading towards digital skills shortage disaster’.

There is some question over what precisely is responsible. It seems that preparing for a career in tech is falling out of favour. In the UK, the number of young people taking IT subjects at GCSE has dropped 40% since 2015.

There is also a mismatch in expectation between employers and younger workers. Fewer than half of British employers believe young people are leaving full-time education with sufficient advanced digital skills. However, some 70% of young people expect employers to invest in teaching them digital skills on the job.

Recruitment agencies have always had some degree of specialisation. Even those with a whole of market offer have specialised divisions for dealing with specific sectors. Now some are seizing on the skills shortage phenomena to take specialisation in a specific niche of tech to the next level.

A new recruitment business model

Interviewing the CEO of US firm Cyberdesic, The Freelance Informer reported the company has combined its reputation and expertise in cybersecurity staffing with the trend for freelance job boards to launch its own on-demand freelancer network. The firm is recruiting cybersecurity professionals from across the US who are interested in freelance opportunities.

Under examination the rationale behind this opportunity is very clear. Within the skills short IT sector, those with the appropriate cybersecurity skills and experience are in even shorter supply.

At enterprise and data centre level, technology is mission critical and the risk of IT security failure needs to be mitigated through adherence to compliance frameworks and ISO standards. There is simply no way around this.

Consequently, it is a boom time for cybersecurity experts. Many companies that simply cannot afford the going rate for a full time role. With the Cyberdesic approach, many now have easier access and more affordable options for moving IT security projects along through the use of freelancers, contractors or consultants.

This represents something of a new business model for recruitment firms. Cyberdesic adds value by screening out unsuitable applicants through a rigorous multi-step vetting process. The firm only accepts a small percentage to ensure that only the top talent is available to work on client projects.

Guaranteeing the skills in this way means clients can hire from the talent pool knowing that the risk of a skills mismatch or shortfall is eliminated, and the risk of cybersecurity failure is mitigated.

This is similar to freelancer job board Toptal, which screens out 97% of freelancers that do not measure up to its standards, for opportunities as designers, developers, financial experts, product managers or project managers.

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It’s highly likely that the recruitment sector is going to see many more agencies innovate in the same way. Where the market is so competitive, those with ambition to grow are likely to leverage their expertise in recruiting specific roles to put together their own freelancer networks in other economic sectors characterised by shortages of high value, business critical know-how.

Whatever the business model of your recruitment agency, or your areas of sector specialisation, ETZ is the perfect hub for your back-office processing. Whether it is a more conventional approach to agency operations, or an innovative new business model, the fundamental need to process timesheets and invoice clients remains the same.

Our leading timesheet, invoicing and payment technology streamlines your back office and integrates your other favourite applications for accounting. To find out more about how we help agencies like yours to maximise profitability through efficient admin and processing book a demo.