52 Per Cent of Executives Say In-House Expertise is No Longer Worth Paying For
Entrepreneurial drive, niche talent shortages and generational divide cultivate booming "Borrowed Expertise" market
TORONTO - Fifty-two per cent of all Canadian business executives in a new Angus Reid business study commissioned by accounting and business advisory firm, Richter, say it's not worth it to pay for in-house expertise in niche areas of business anymore. In fact, they think outsourcing for specialized expertise will be a growing trend this year.
Richter's survey, entitled, The Canadian BizHealth Report surveyed 500 senior executives across the country to get a pulse on the financial and entrepreneurial health of businesses from coast to coast.
"We're seeing some important shifting tides that are building a new booming 'Borrowed Expertise' market in Canada," said Mitch Silverstein, partner at Richter in Toronto. "This specialized knowledge outsourcing will be a key strategy to drive business growth in the foreseeable future."
Richter's Canadian BizHealth Report discovered this outsourcing trend is emerging from a crisis-like niche talent shortage:
Nearly six in 10 respondents (58 per cent) say that for company growth, they follow their gut instinct to identify where the business should go, and then they get the experts on their team to chart that path. The challenge for a full 71 per cent of the survey respondents however, is recruiting top talent. They say this task is becoming increasingly difficult, and that they've had to increase salary ranges in order to attract and retain quality employees.
Moreover, a staggering 77 per cent of respondents said one of their biggest competitive challenges was finding a support team that could keep up with them on an entrepreneurial path. This may be an indicator as to why Canadian businesses are equally divided on where they'd allocate resources for internal investments. Thirty-nine per cent would invest in their employees, while another 39% would focus on product and technology development.
"The entrepreneurial spirit that's growing among the Canadian workforce can sometimes feel like a double-edged sword for business leaders," explained Mr. Silverstein. "While that spirit is fantastic for fresh idea generation and innovation, some business executives are feeling run over by a young labour force who wants to learn everything it can within a couple of years, and then jump ship for a bigger salary."
On the other end of the spectrum, 41 per cent of business executives report knowing someone, be it colleagues, friends or family, who has left his or her job to pursue personal entrepreneurial goals within the past year. This is a significant talent retention challenge for businesses.
"We are most definitely seeing an entrepreneurial psychology taking over both the youngest and oldest generations in today's workforce - the rise of the 'greypreneur' and 'solopreneur'," Mr. Silverstein observed. "They are embracing the mindset of 'Why should I work as hard as I can so other people can make money?' They want to be their own boss, and they are okay with the risks that come with that move."
According to Mr. Silverstein, many entrepreneur-minded business professionals would rather keep their gains for themselves and build a niche expertise on their own.
Interestingly, the Canadian BizHealth Report also discovered a growing divide among business philosophies between older and younger generations. Close to eight in ten respondents (78 per cent) think their C-suites should be doing more to embrace a triple bottom line philosophy in their business - balancing people, planet and profits.