4 HR Trends Blowing Up Talent Acquisition, Part 4: Online Staffing Engages Contingent Workers
Online staffing companies are leveraging technology to disrupt the traditional staffing model. Unlike staffing firms, these companies deliver talent through marketplace transactions. These Web-based platforms let individuals buy and sell various services and provide those individuals with features that enable online project engagement and self-service options (e.g., billing, rating, scoping, and feedback).
To make it more manageable, we’ve broken down online staffing into five subsets:
- Crowd-Sourced Recruitment
- Temporary Labor Marketplaces
- Recruitment Marketplaces
- College or University Recruiting
These are task-based services or scoped-work projects. They let you set your own budget and get the talent you need without the hassle of having to go and find someone on your own. Employers share tasks and let individuals submit their own unique solutions, out of which the employers select the winners. You can see this trend mirrored in other specialized areas like graphic design. While old school solutions like BountyJobs got flack for introducing this model back in 2007, today it’s thriving, perhaps due to the rise of the gig economy.
Temporary Labor Marketplaces
Similar to crowd-sourced recruitment, the temporary labor marketplace companies consist of task-based and/or scoped projects. The difference is that these platforms include one submission for every project posted. Many of the companies in this segment have found success focusing on vertical-specific or job-specific offerings because they are able to scale much more efficiently. As companies attempt to scale to demand (and scale back when demand wanes), this has affected recruitment in a very real way.
As Arun Srinivasan, senior vice president of strategy and customer operations at SAP Fieldglass, told CIO.com, “The changing needs of today’s workers, the war for talent, and the globalization of the workforce are just a few reasons that today’s technology is evolving so rapidly. All of these forces are driving workforce management to the top of the business agenda, especially as talent becomes a true differentiator for organizations.”
E-staffing companies have been in the limelight recently. These companies are reinventing how traditional staffing works by leveraging technology to reduce their cost bases (which reduces the price for employers) and to scale extremely quickly. Instead of waiting for companies to post jobs, these companies essentially prequalify passive job seekers and send them interesting, presumably well-matched jobs as they become available. While TheLadders has claimed that it does this for years, the high valuations of many e-staffing companies should speak directly to their efficacy, although it should be mentioned that long-term results aren’t in yet.
Related: Are Freelancers the Workforce of the Future?
Recruitment marketplaces are narrowly focused temporary labor marketplaces. These platforms have pools of thousands of independent recruiters. Some of these platforms allow you to hire a recruiter per hour, and others allow you to crowdsource your recruitment so that many recruiters can work on the same job, ideally reducing your time-to-fill.
More than 90 percent of all business are small or medium-sized businesses (SMBs), and they employee more than 60 percent of the workforce and account for more than 50 percent of global GDP, according to SBS Group. This means that the companies that put most of us to work may not have full-time recruiting staffs. Enter the recruitment marketplace, which allows SMBs to access premium recruitment professionals for as much or as little time as they need.
College or University Recruiting
The companies in this segment offer a number of different ways for employers to connect with students or recent graduates. While large corporations have always had university recruiting departments, the proliferation of talent brokers in the entry-level and internship spaces should be an indicator that many employers are in need of help.
Online staffing platforms are generally not the employers of record for the contingent workers who use their software. Rather, they are brokers of talent. While this arrangement currently acts as a strategic advantage that reduces the cost profiles and risks of online staffing platforms, these companies are beginning to encounter headwinds as worker classification comes under increasing levels of scrutiny. We believe this trend will continue.
On the other hand, the online staffing space has experienced explosive growth. In fact, 34 percent of the U.S. workforce is currently classified as contingent, and that number is only expected to grow over the coming years. With the online staffing space growing alongside the freelance segment of the workforce, we expect the winners will be those companies that can effectively capture and sustain their talent pools.
Online Staffing Contenders:
– Amazon Mechanical Turk
– Hire Canvas
Online staffing is hotter than ever before, but with 3 billion Internet users and 71 percent of the U.S. labor force on the job market, companies will have to refine their searches if they want to zero in on the right talent. Breaking the online staffing space into five segments can help HR pros and recruiters more easily navigate the market.
Jonathan Kestenbaum is the executive director of Talent Tech Labs.