Last week, Randstad Holding announced its acquisition of twago, the largest freelancer marketplace platform based in Europe (founded in 2009 in Berlin). The acquisition is a significant event for a number of reasons, not the least of which is it being the first time a staffing and workforce solutions company has acquired a true online freelance marketplace.
Spend Matters has been reporting extensively on how online work intermediation platform (WIPs) models are working their way into the already established contingent workforce supply chain, adding new ways to efficiently source and engage talent. This acquisition is a further evidence of that trend.
We have also been following twago as a distinctive pan-European online workforce platform: We recently profiled the company as a “WIP of the Week” and also covered its acquisition of Spain-based freelancer platform adtriboo, which brought the total number of registered freelancers for the combined platform companies to about 500,000.
Management Views on the Acquisition
The acquisition has been reported as a win-win for Randstad and twago. “For the company, this is a great step forward,” twago Co-Founder and CEo Thomas Jajeh told Spend Matters. “Randstad is a great brand to be working under,” and in the talent market, “it creates credibility and trust” that a relatively small company could not achieve on its own.”
Jajeh also noted how being a part of Randstad will now allow twago to extend its pure freelancer marketplace model to a model that will give medium-to-large enterprises the ability to source and engage a new, growing population of freelancer talent but with the assurance that comes with being a Randstad customer.
From Randstad’s perspective twago’s platform and reach “can provide clients with enhanced access to freelancers,” Chris Heutink, member of the executive board at Randstad, said in a press release. The twago architecture “can be easily adapted to create client-branded freelance recruitment platforms” in Randstad regional and other recruiting and staffing organizations and integrate clients’ existing vendor management systems. “As a result, employers will be able to source talent more quickly and cost-effectively,” Heutink added.
Paul Jacquin, managing partner at Randstad Innovation Fund and a twago board member, also echoed that twago could be leveraged in a number of different ways with Randstad, and mentioned some innovative use cases under consideration. Besides noting that the acquisition by Randstad will give twago much more scalability and market visibility and give Randstad customers access to a whole new population of talent, Jacquin also spoke to the importance of bringing more technology capabilities and expertise into Randstad.
Randstad CEO Jacques van den Broek summed it up: “The acquisition of twago follows our success with RiseSmart, the first step towards offering new services through digital transformation. The addition of technology and business models that enrich our value proposition to clients and candidates is part of our ‘tech & touch’ strategy.”
Spend Matters Perspective
We view the acquisition as a major data point in a long-term trend that will be accelerating in coming years across the contingent workforce supply chain. That supply chain is undergoing digital transformation that will reduce cost structures and cycle times while opening up new talent sources.
We discussed this trend quite recently in “The Digital Evolution of the Contingent Workforce Supply Chain: What Does It Mean?” where we said:
It is clear to us that digital work intermediation platforms and ecosystems have begun to have a secondary effect of kindling digital transformation and innovation within the existing contingent workforce supply chain, and it will continue. One could say that, to some extent, some players in the supply chain are making use of the hotbed of innovation outside of the existing supply chain, kind of looking into the window of a functioning laboratory and observing all the experiments and outcomes and learning how they should respond to them.
We also noted that:
Some traditional staffing suppliers and IC compliance firms have become students of WIPs and have come to the conclusion that they require a suitable adaptive response. Their responses have focused on where there might be shortcomings in WIPs e.g., compliance), where there might be parts of the WIP concept that they could adopt (usually taking the form of managed talent pools/clouds) and how they might complement with their own capabilities to bring innovative solutions to their clients.
At this point, Randstad may very well be the leader in actually executing this kind of digital transformation strategy by significantly leveraging WIPs. Randstad not only invested in twago and Gigwalk, it has now acquired twago and recently started an initiative that leverages the Gigwalk platform across Japan, one of largest staffing markets in the world.
We at Spend Matters have been discussing how WIPs are not “far-out” models that have little significance for contingent workforce programs at this time (a perspective which is probably widely held by practitioners today). Instead, we have argued that WIPs are evolving on their own, as well as entering into today’s managed supply chain, presenting new sourcing and cost savings opportunities. Those opportunities are developing both as separate channels and within some existing suppliers — because there is enterprise demand for talent in a time of talent shortages.
It is not too late to be preparing for these developments which will require not only new strategic sourcing, supplier management and internal stakeholder engagement approaches but also new technology for integrating with enabling these now channels. Many decisions and preparations will need to be made, and the time to start is now.