Innovative Employee Solutions Spins Off Fulcrum: A New Enterprise Solution for Independent Talent is Open for Business

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Innovative Employee Solutions (IES), a San Diego-based outsourced payroll and human resources services provider, recently announced it had spun off enterprise freelancer platform Fulcrum into its own company.

Fulcrum, which was incubated within IES, bills itself as “a first-of-its-kind hiring platform connecting enterprise companies with top online gig and freelance talent providers while maintaining full compliance,” according to the recent press release. The newly minted company “delivers a powerful, end-to-end gig workforce hiring platform, where enterprise companies can access the entire gig economy from a single, fully-compliant online point of entry with transparent pricing models.”

Market Context

Fulcrum joins a number of enterprise software solutions that enable businesses to manage their growing populations of independent workers (e.g., freelancers, independent consultants, alumni). These include solutions like Kalo, Shortlist and TalentNet, to name just a few.

This solution category did not even exist five years ago, and most providers are less than three years old. Accordingly, providers have been seeking the right “solution formula” to satisfy different targeted buyer segments or to achieve horizontal adoption across most segments.

So some providers may offer what is almost a component plugin, with not much more than core talent pool management functionality, while others may provide a full-featured solution. Some may provide no real external sourcing functionality, while others may provide their own supply-side marketplaces or the means to source from multiple third-party platforms and other suppliers. Some may provide just an API to integrate with a client’s preferred third-party compliance, AOR/EOR and worker payment service, while others may provide those and other services as a part of their total solution offering.

This is the context in which Fulcrum now appears, and the recent press release and statements by IES and Fulcrum management give us some sense of how this new solution provider is approaching the market.

Fulcrum on Point

From the press release we can deduce that Fulcrum was not just a solution developed by technologists coming from outside the contingent workforce industry.

In 2016, IES President Peter Limone, understanding the increasing importance of online platforms in the staffing industry, “challenged his team to come up with a solution that would grow the ability of enterprise companies to hire from the online space.”

“Fulcrum is what happens when the top minds of the staffing industry come together to create a simple, effective, fully-compliant way for Fortune 1000 employers to access the gig economy,” Limone said.

Fulcrum CEO Trevor Foster echoed those sentiments.

“For years, major enterprise companies have wanted to hire high-quality freelance workers from all around the globe, but had no cost-effective, compliant way to do so,” Foster said. “Layers of existing processes and complex global compliance requirements made it very difficult for them to access this growing pool of talent.”

To address these gaps and barriers, Foster said that Fulcrum can connect “all the resources required for these employers to hire the talent they need quickly and effectively — with one single point of entry, one end-to-end integrated solution, and a single invoice.”

One core part of the Fulcrum solution platform is “an application programming interface (API) integrating the services of vendor management systems, compliance vendors, online talent marketplaces, background screening vendors, independent contractor service providers, freelancer management systems and artificial intelligence (AI)-powered recruitment platforms, providing a one-stop shop for hiring managers at enterprise companies,” according to the press release. The API is integrated with IES’ back-office system to ensure each freelance worker hired through Fulcrum is fully vetted, kept compliant and paid on time according to industry standards.

Though online talent marketplaces are mentioned only in passing, the Fulcrum website indicates that the company currently has partnerships with Toptal, Upwork, Maven and Catalant. To what extent those marketplaces are integrated with the Fulcrum marketplace is something we need learn more about.

Chief Revenue Officer Sean Ring seems to put the whole thesis in a nutshell, saying, “We’re bringing on-demand access to freelance workers into the traditional staffing infrastructure of a Fortune 1000 contingent workforce program. We do this by normalizing data from multiple disparate platforms, creating a central hub for hiring managers to solve their greatest challenges.”

Fulcrum will remain owned and closely affiliated with its parent company IES. As noted in the press release, “IES will be Fulcrum’s lead U.S. compliance and payrolling vendor, and a key partner and investor as the business moves forward.”

Spend Matters View

For contingent workforce management buyers, Fulcrum is an interesting new player in the still emerging market for solutions that enable management and sourcing of an enterprise’s increasingly important external — in particular, independent — talent. There are a number aspects of Fulcrum that we find interesting, in particular the extent to which Fulcrum is an integration/middleware platform or an "integration hub" versus a full-featured software application with talent pools and self-sourcing capabilities.

We had a chance to catch up with Foster on this question, and he had this to say:

“Our technology is designed to serve as a connection platform that operates in the background. And our focus is on allowing users across the spectrum (CW/S program management and hiring managers as well as freelancers) to continue using the systems they use today — whether that means they remain in the VMS on the client side or the in talent marketplace on the freelancer side. That has the added benefit of enhancing the current systems of record used by both sides — additional transactions occur within existing work streams already established and managed for both client users and freelancers. That, in turn, enhances visibility into this new talent channel within the same reporting environment used by clients today, including the ability to compare/contrast KPIs and SLAs without needing to combine disparate datasets. Last but not least, there is practically no implementation phase from a technology perspective as we ‘piggy back’ on the security, access and approval setup in the VMS, and freelancers never have to create a profile or log into the Fulcrum platform, either.”

We need to examine this model in more detail and see how it may compare to other solutions in the cohort.

In any case, Fulcrum falls squarely into the forthcoming Spend Matters SolutionMap category for technology-based solutions for sourcing and managing what we call “independent contract workers, or ICW.” The ICW SolutionMap, along with two other Contingent Workforce and Services SolutionMaps (Temp Staffing and Contracted Services/SOW), will have their inaugural release in early September. We are just now kicking off the Q4 2018 SolutionMap research cycle, and we’re looking to see if Fulcrum will become an additional, distinct destination for potential solution buyers.

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