How businesses can close skill gaps with freelancers

“Talent crunch,” “the Great Resignation,” “threatening skills shortages,” — the media paints a bleak picture for employers. 

But are we really out of smart and talented people? Or perhaps, the businesses aren’t looking in the right places? 

In this post, we challenge you to think about how you can close skill gaps with freelancers. But before we dive in, let’s get the basics out of the way first.

What is a skill gap?

A skill gap stands for a discrepancy between your company’s ambitions and your workforce's abilities to achieve the set goals. In other words: when your current people lack the knowledge to complete a certain type of work, you may be facing a skills gap. 

That’s not an odd scenario: 87% of businesses already report skill gaps or expect to face them within several years.

But ain’t unemployment rates around the world sky-high, too? That’s right. The unemployment rate in the euro area looms at 6.8%. The US has 3.6% of people without jobs. Labor is accessible on the market. But – for various reasons – not all available candidates are a “fit” for the advertised jobs. 

• Three in four workers don’t have the digital skills needed by businesses today
• In the EU, 7 in 10 tech employers believe that potential recruits lack the skills necessary for a career in AI
• Globally, 87% of employers have trouble finding qualified candidates for open roles

This mismatch in jobs available vs. workforce competence creates deeper skills gaps. If unaddressed, talent shortages will result in some 85 million vacancies unfilled, costing the global economy $8.5 trillion.  

Why skills gaps run deep among companies 

Highly-skilled professionals and knowledge workers are in the shortest supply. Globally, employers are actively courting professionals in: 

• IT and data fields
• Sales and marketing
• Operations and logistics
• Manufacturing and production
• Customer-facing and front-office roles 

Do any of the professions above sound overly niche or obscure to you?  It’s the “general” skilled talent that is in short supply because everyone needs it. 

Businesses are moving at a faster pace. You can launch a new company in a matter of days and grow into a profitable digital startup in several short years. Legacy businesses, in turn, a forced to re-invent their ops to keep up with the new leaders — invest in new digital sales channels, better analytics, online marketing, and so on.

The trailblazing economic changes require people with strong digital literacy and new skill sets — and higher education is struggling to catch up. As Aiman Ezzat, CEO of technology consultancy Capgemini, says:

“As moving to a digital economy is one of the future drivers of economic growth, we do not have enough skills, we are slowing down the transition."

Talent shortages can also be self-induced. As HBR + Accenture research found: 

A major reason for the [skills] gap: the near-ubiquitous use of automated hiring platforms, which systematically screen out large numbers of job seekers who might well fit the bill were their résumés ever to reach hiring managers' desks.

GPA-based applicant screening, unreasonable lists of required qualifications, 10-page application forms — a lot of things deter good talent from applying to available jobs. Low compensation, lack of work-life balance, and problematic work cultures also prompt many people to resign and seek alternative work arrangements. 

Just like that, a ton of companies end up without their most valuable asset — smart people. 

How do I identify skills gaps in my business? 

Most talent skills gaps are acute. It’s hard to miss ‘em. 

If you’ve heard something like “we don’t have the right person to do this” in response to one of your ideas, your company is facing some skills gaps.

Other strong indicators of skills gap include: 

• Over-worked workforce with low morale and engagement 
• Lack of creative ideas, ability to innovate, or desire to challenge the status quo
• Issues with adopting emerging technologies or trying new ways of doing the old stuff 
• Progressive loss of market share because your product/service trail behind the competition

Such symptomatic issues can be hard to spot at the onset. 

So if you want to prevent, rather than cure them, here’s how to conduct a skills gap analysis:

1. Create (or review) role descriptions and map all required skills

Skills gaps can emerge out of talent shortages. But they can also be a by-product of unrealistic expectations. 

For example, expect one marketing person to do a full spectrum of promo activities — from paid media and SEO to content creation, lead gen, and offline advertising — hold an advanced degree, doesn’t mind long working hours, and agrees to below-the-market wage. Hint: It's not gonna happen. 

To create more “grounded” role descriptions, ask your team(s):

• Which skills are essential for their role? 
• What skill sets may be currently missing? 
• What skills would be good to have in the future? 

Group all the responses into a list of hard and soft skills. Then mark each as “must-have” and “complementary.” 

To keep your skills gaps analysis objective, assign a 1-5 score to each skill. You can use numerical scales to either rank priority — or experience levels. 

For example, here’s how a skill assessment for a content marketing role might look:

2. Measure your team(s)’ competencies 

To cope with the talent skills gap you need to understand your people’s shortcomings.

This can be tedious to do as few will volunteer to talk about their shortcomings or publicly admit a lack of knowledge in some areas. 

So prep the scene first with a reassurance: you aren’t doing this to find (and fire) the “weak links,” — rather to offer new opportunities for upskilling. 

Then measure the team(s) skills levels via:

• Surveys and self-assessments
• 1:1 interviews and performance reviews 
• Workplace simulation training programs 

If you have the budget, platforms like Skills Base and iMocha help you assess, capture, and map your workforce skills.

A quick word of caution: Pair tests with in-person interviews. Standardized tests don’t always reveal the true scope of a person’s abilities and practical knowledge. 

3. Act on the findings

Use the workforce skill assessment data to decide which: 

• Roles are worth breaking into separate ones 
• Skills you need to prioritize when hiring 
• Training you should provide to your workforce 

Then refresh your role descriptions and plan for closing your skills gaps. 

Can you fix skills gaps with freelancers?

Yes, absolutely. The booming freelance economy is a wonderful melting pot of full-time knowledge workers, part-time consultants, solo business owners, and other types of external workers. For 90% of businesses, freelance talent has already become crucial for achieving business goals. 

Here’s how the freelance workforce helps close skills gaps:

• Faster access to in-demand talent. The average time-to-hire for in-house candidates is 41 days. For in-demand roles, it can be 2X-3X longer. Freelance marketplaces and talent match-making agencies can hook you up with the right person in a span of a week. Plus, you aren’t as constrained by location — and can hire talent remotely from anywhere in the world. 
• Lower risks. Hiring often takes ages because employers are afraid to end up with the “wrong” person. Yet, people with in-demand skill sets often consider several work ops at once — and often go with the fastest movers. Labor laws also prevent employers from firing people “just because they didn’t fit.” Unlike employees, independent contractors can be hired (and fired) with less red tape. Moreover, you can always see several people in action on smaller-scale projects before committing to long-term collaboration. 
• Knowledge exchanges. Freelancers come in with more diverse experiences. Many get to see (and test) different ideas across a portfolio of projects. This makes them an excellent “sounding board” for your ideas and a “treasure trove” of extra knowledge your in-house team can also benefit from. Many freelancers also double as consultants and offer various training to clients’ teams — from actionable masterclasses to personalized 1:1 upskilling sessions. 
• Rapid team scale up and down. Skill gaps often manifest when you want to try something new — launch a TikTok marketing campaign, design a new product interface, or test a new lead generation strategy. Hiring internally for such test projects can be expensive (and tedious). But you can always bring in the missing skills to test the waters and then decide whether it’s worth investing more in this area. 
• Access to “latent” workers. Latent workers are people who aren’t seeking traditional jobs but might be willing to return to traditional employment with the right offer. In the US alone, that’s 28 million people. Highly-skilled freelancers are among those latent workers. If you found your “match”, talk to them about the possibility of joining your company FT (but be prepared to offer some compelling arguments). 
• Higher digital competitiveness. The freelance workforce has higher digital literacy skills (as part of the profession). Such talent can “plug-in” on-demand to cover temporary, recurring, or one-off tasks. If you master the balancing act of hiring and managing external workers, your company will always have a steady supply of the right skills to pursue ambitious goals. 

How to close skills gaps with freelancers

Sold on the benefits of hiring freelancers? Great! Then, take these steps next. 

1. Don’t hire for roles; hire for tasks

A common mistake clients make is hiring freelancers for roles, rather than projects. 

Sure, you are looking for a ‘developer’ with Java framework knowledge. But if you just drop a regular job ad with role requirements and qualifications, few freelancers will bite. 

Why? Because most of us think in “projects” and “tasks”. To decide if the gig is good for us, we want to get the gist: What are your goals? What are the deliverables? What items do you need to get off your to-do list? 

As a recent HBR article points out: 

One of the biggest predictors of whether a company will get the most out of a talent-platform partnership is how well it can break work down into rigorously defined components that can be easily handed over to outsiders. 

In other words: you have to be precise in whom you are looking for and what you’d want them to accomplish. 

For example: 

“We are looking for a web developer (Angular web framework + Java) to work on a new front-end for a BigCommerce-based e-commerce store. 

Jobs-to-be-done:

• Develop new shopping cart functionality

• Code dynamic home page front-end (+ all interface elements)

You’ll be working with an in-house UX designer + product owner and 2 other freelance developers.” 

This is a better “pitch” to present to freelancers.

2. Prepare for a hiring marathon 

When you are after in-demand talent, prepare to play the long game. No, not time-wise, but process-wise. 

Shift from looking for people when you need them for yesterday to keeping a list of contacts you can tap into for this or that. 

Or in HR speak: build a talent pipeline. 

A talent pipeline is your system for creating, maintaining, and activating a pool of candidates for an available position. 

A good pipeline features a mix of FT applicants, internal workers (suitable for promotion/transfer), and external services providers — agencies, independent contractors, gig workers and consultants. By having an engaged network of contacts, you can fill in the emerging skills gaps faster. 

3. Create an onboarding plan for freelancers

Onboarding often gets overlooked for in-house hires — and barely exists for contractors.

As a result, the average turnover for new hires is 50% in the first 18 months.

Onboarding helps freelancers settle faster in the new role — and jump straight to value generation. A strong onboarding process also helps ensure long-term engagement, meaning less hiring hassle (and costs) for you. 

Learn more about onboarding freelancers and independent contractors. 

4. Nurture and retain your freelance workforce 

Most organizations are after the same in-demand skill sets, so talent poaching and hiring competition get tough (even for freelancers). Retention is key to closing your talent gaps in the long term. 

To keep your freelancer workers happy and engaged: 

• Offer competitive market rates
• Pay freelancers on time (without excuses) 
• Make them feel like part of your team
• Collect feedback on their experience 

Skills > scarcity 

Finding great talent is hard, but companies often stand in their own way – hiring by degree, seniority, or location is a surefire way to amass a huge skills gap within your workforce (which will be impossible to fill). 

Likewise, poor compensation, problematic work culture and a ho-hum hiring experience will deter skilful candidates from accepting your offers. 

Scarcity is a mindset. To overcome it, look for people that may have the skills and knowledge you need (and pay somewhat less attention to how they developed them – in a corporate role, by freelancing, self-education, etc.). Then be open to engaging such people in a capacity that works best for them – as consultants, independents, part or full-time hires.

Xolo makes finding those motivated and talented people a breeze, with an intuitive client/freelancer matching tool that will save you up to 100% of the time you’d previously spend on searching. It even makes cross-role, cross-border collaboration extra simple by handling contracts, compliance and freelancer payouts automatically.

About Elena

Elena Prokopets writes content for tech-led companies & software development businesses, marketing to them. Her empathy for the customer, expertise in SEO, and knack for storytelling help create content that ranks well and drives industry conversations.

Elena uses Xolo so she can focus on her solo B2B content writing business without stressing over the compliance and admin overhead.